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U.N. chief urges wealthy nations to phase out coal use by 2030
U.N. Secretary-General Antonio Guterres called on wealthy nations to end coal use by 2030 so the world can meet its goals to curb global warming, urging G7 nations to make that commitment before or at a leaders' summit in June. In a video message to a virtual gathering of the "Powering Past Coal Alliance", Guterres said emissions- cutting pledges by governments fell far short of what is needed to limit climate heating to 1.5 degree Celsius above preindustrial levels. But if immediate action were taken to end use of what he called the dirtiest, most polluting and increasingly costly fossil fuel in power generation, "then we have a fighting chance to succeed", he added. "Phasing out coal from the electricity sector is the single most important step to get in line with the 1.5- degree goal," the U.N. chief said. Scientists estimate that coal use in electric power generation must fall by 80% below 2010 levels by 2030 to meet the 1.5C warming limit, which is the more ambitious goal set by more than 190 nations in the 2015 Paris Agreement. Guterres said all 37 countries in the Organisation for Economic Co-operation and Development (OECD) - a group of mainly high-income nations - should promise to stop using coal by 2030, and the rest should do so by 2040.
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China economic blueprint signals more coal investment
China will invest more in coal to power its economy over the next five years, according to a
government plan that only modestly increased renewable ambitions. Environmentalists had been hoping China’s five-year national development plan, unveiled at its annual parliamentary session, would give a roadmap for its goal of carbon neutrality by 2060. However the plan, announced by Premier Li Keqiang, had few details and signalled little urgency in cutting the greenhouse gas emissions that cause global warming. The lack of a cap on total energy consumption was one of the notable exclusions. “Without the energy consumption control target, there’s even less in this five-year plan to constrain emissions growth than in the previous ones,” Lauri Myllyvirta, from the Centre for Research on Energy and Clean Air, told AFP. “As a result, there’s no guarantee that emissions growth will slow down, let alone stop, by 2025.” Instead the plan aims to reduce the amount of carbon emitted per unit of GDP by 18 per cent. However this is the same target as for the previous five years, and economic growth was set for 6 per cent in 2021 – meaning a net increase in carbon emissions for this year.
. China's coal consumption share falls to 56.8% at end-2020
China cut its coal use to 56.8% of energy consumption at the end of 2020, maintaining its target of below 58%, but overall coal consumption continued to rise amid record industrial output and the completion of dozens of coal-fired power plants. The rapid rollout of renewable-energy capacity and the growing use of natural gas has helped reduce the share of coal consumption from around 68% over the last decade and 57.7% a year earlier, but overall coal use has not peaked. Coal consumption in the world's biggest coal user and greenhouse gas emitter grew 0.6% last year, the fourth consecutive increase, the National Bureau of Statistics said. The share of "clean" energy - including natural gas, hydropower, nuclear and wind power - rose 1 percentage point to 24.3% of consumption, it said. Energy consumption increased by 2.2% to 4.98 billion tonnes of standard coal equivalent last year, with crude oil demand growing by 3.3% and natural gas by 7.2%. China has pledged to halt the rise in its carbon emissions before 2030 with targets to control energy consumption, especially coal-burning, and improve energy efficiency.
China expected to favour green tech over coal in new five-year plan
China, which long targeted rapid industrial growth despite its environmental consequences, now aims tobecome the global leader in "lowcarbon tech for a carbon-constrained world" as it unveils its new five-year plan this week, China analysts said. That shift is likely to include an accelerated pullback from its role as a major financier of new coal-fired power plants at home and abroad, Isabel Hilton, founder of China Dialogue, a nonprofit news organisation, told an online event. China is today the world's largest emitter of planet-heating gases, responsible for about 28% of total global emissions. Its 2021-2025 economic and social development plan is expected to reinforce a strong signal to Chinese industry to move away from fossil fuels and is likely to mean national emissions start falling within five years, predicted Li Shuo, a senior policy advisor for Greenpeace East Asia. In a country that normally sets targets it can achieve or over-achieve, major industries this
year must deliver plans on how they will cut emissions in line with China's commitment last year to become "carbon neutral" by 2060, Li said.
Coal terminal facing export slump amid Australia-China trade bans
The owner of one of the nation’s largest coal ports says the Chinese government’s ban on Australian coal has triggered a realignment of global trade flows that is sending more of the commodity from local shores to Europe and elsewhere in Asia. Dalrymple Bay Infrastructure chief executive Anthony Timbrell said coal volumes shipped from its Hay Point terminal in Queensland had dropped to 55 million tonnes in 2020, down from 67 million tonnes, as it reported a maiden net loss of $113 million. Australia’s coal producers have been hit hard since COVID-19 restrictions slashed demand for the commodity and worsening diplomatic ties between Canberra and Beijing led to China unofficially black-listing Australian coal imports. The federal government, which has described coal as being in a “state of flux”, is forecasting the nation’s exports of metallurgical coal – used in steel-making – will fall by around 8 million tonnes to 169 million tonnes this year due to lower demand, while thermal coal – used in power generation – will fall from 213 million tonnes to 199 million tonnes.
Indonesia's Salim plans Australian coal mine growth
The Indonesian owners of Australia's 8mn t/yr Mount Pleasant high-grade thermal coal mine in New South Wales (NSW) have applied to expand the mine to 17mn t/yr and extend its life to the end of 2048 from 2026. Indonesian conglomerate Salim's MACH Energy Australia subsidiary has applied for environmental approvals to increase run-of-mine capacity to 21mn t/yr from 10.5mn t/yr, to deliver 17mn t/ yr of saleable coal to export and domestic customer. The expansion includes a larger mining footprint, as well as an upgrade to the coal handling and preparation plant and the rail loop that loads coal for delivery to the port of Newcastle. The proposal is a show of confidence in Australia's thermal coal industry, which was largely unprofitable in July-December when high-grade thermal coal prices slumped to around $50/t fob Newcastle. Many coal mining companies, including UK-Australian firm BHP, are looking to exit their thermal coal businesses in NSW, with Chinese-owned Yancoal buying up many of the coal assets already sold. MACH acquired the Mount Pleasant project in January 2016 for $224mn plus royalties as part of UK- Australian mining firm Rio Tinto's plan to divest all of its coal assets.
Indonesian coal exports stutter in January
Indonesia exported another record-high volume of coal to China in January, but overall shipments stuttered amid weather-related disruptions and fewer loadings for other key markets. Indonesia, the world's largest thermal coal exporter, shipped 38.2mn t in January, which was broadly unchanged from a year earlier, customs data show. But exports were down from 40.59mn t in December, representing the first month-on-month decline since September 2020. This drop came amid steep price rises, suggesting that there were some supply-side constraints alongside the strong Chinese demand. Argus' GAR 4,200 kcal/kg and GAR 5,800 kcal/ kg fob Indonesia price assessments both rose by more than a third on the year to 30-month highs of $47/t and $80/t in January, respectively. Indonesian coal production slipped to around 47.2mn t in January, from 51mn t a year earlier and 48.2mn t in December, provisional govern-
ment data show, although data reporting lags mean that the final January total could be higher. Inclement weather in January may have slowed production and hampered internal logistics. Average daily rainfall in Banjarmasin, South Kalimantan, was double the 2016-20 seasonal average in January at 30 mm/day, according to Speedwell Weather data (see chart). The Indonesian government has set an unchanged 550mn t target for coal production this year, although 2020 output exceeded this at 563mn t, according to government data.
Institutional Investors Hold US$1.03 Trillion Investments In Coal
Despite the ongoing ESG push, institutional investors around the world held as of the end of January 2021 as much as US$1.03 trillion in companies operating in the thermal coal value chain, a group of NGOs, including Urgewald, said in a recent report. U.S. investors hold the largest share, 58 percent, of the world’s institutional investments in the coal industry, Japanese banks are the top lenders to coal businesses, while Chinese banks are the top underwriters, according to the report, which analyzes financial flows to all 934 companies operating in the thermal coal value chain. The world’s largest institutional investor in the coal industry is U.S. Vanguard with holdings of almost US$86 billion, closely followed by BlackRock, which holds investments of over US$84 billion in the coal industry, said the report published by Urgewald, Reclaim Finance, Rainforest Action Network, 350.org Japan, and 25 other NGOs. U.S. investors hold the largest share, 58 percent, of the world’s institutional investments in the coal industry, Japanese banks are the top lenders to coal businesses, while Chinese banks are the top underwriters, according to the report, which analyzes financial flows to all 934 com-
US coking coal exports fall
US coking coal exports fell to their lowest since August 2020 in January, as US suppliers focused on securing sales with Chinese buyers willing to pay a premium for US coals amid the ongoing unofficial ban on Australian coal. But Australian shipments rose to Brazil and Asian markets outside of China. Total exports fell by 15pc year on year and by 21pc on a monthly basis to 2.95mn t in January, after several US miners cut production in the fourth quarter because of low prices and weak demand in the Atlantic earlier in the year. China overtook Brazil and Canada — key export destinations for US coking coal — for the second month running in January, as US suppliers shipped 614,164t to China, compared to 75,000t a year earlier. Shipments edged down by 7.6pc from December. Shipments to Asian markets outside of China continued to fall, as US low-vol were supported by strong Chinese demand, while Australian prices were deflated by the lack of Chinese demand. US exports to India fell by almost 40pc on a monthly and an annual basis to 236,845t, while shipments to Japan fell by 32.5pc from a year earlier to 147,877t. The US shipped no coking coal to South Korea for the second month in a row, compared to 442,485t in January 2020. Despite the decline in export volumes to ex-China destinations, the rise in US low-vol and even some high-vol A coking coal prices on the back of Chinese demand has given US miners an unexpected lifeline.
US weekly coal carloads jump to 13-month high: AAR
US coal carload originations jumped to a 13-month high 65,632 in the week that ended March 6, up 11.9% from 58,634 a week earlier
and the most since 69,261 in the week ended Feb. 1, 2020, according to a March 10 report from the Association of American Railroads.
The latest week was also up 11.8% from the year-ago week, which was the first yearly increase in 11 months. However, the 65,632 was 11.3% lower than the five-year average for the corresponding week. Coal carloads represented 12.7% of all the traffic on US railways, up from 12.1% a week earlier but down from 13% in the year-ago week. Since Jan. 1, cumulative coal carloads are at 530,902, down 10.2% from the same period a year ago. Coal originations on Canadian railroads – including the US operations of Canadian National, which serves several mines in the Illinois Basin – fell to 6,781 carloads, down 0.3% from a week earlier and 19.4% lower than the year-ago week. It was the lowest carloads for the corresponding week since 6,216 in the week ended March 3, 2018. For only the sixth time in the last six years, all four major Class I railroads -- Norfolk Southern, CSX, Union Pacific and BNSF – saw weekly increases and year-on-year growths. BNSF reported 28,462 coal carload originations and interchanges in the latest week, up 15.8% from the prior week and 11.5% higher than in the year-ago week, according to rail-reported data. It was the first year-on-year increase since rising 16.2% in the week ended March 28, 2020.
UK coal mine plan pits local needs against global green ambitions
The UK’s first new deep coal mine for more than 30 years has opened up old divides. People in Whitehaven, the depressed town where it could be built, are excited. Global climate activists, including Greta Thunberg and Sir David Attenborough, together with a significant portion of the British public are appalled. The agonised debate is a familiar one for governments cutting carbon emissions: is it fair for a single community to sacrifice prosperity for the good of all? Cumbria county council, the local authority, approved the mine in October, and the UK government confirmed the decision in January. But on February 9 the council said it would reexamine the decision. This followed a wave of protests from green groups and a letter to the government from its advisory body, the Climate Change Committee (CCC), warning that the mine would leave a “negative impression” of the UK when it chaired the COP26 UN climate talks in November and make it harder to hit carbon reduction targets. Mike Starkie, the Conservative mayor of the town, which is on the Cumbrian coast in northwest England, says the 500 promised well paid jobs, with at least as many in the supply chain, are vital to a remote town that has not recovered from pit closures in the 1980s.
Former open cut mine in Central Queensland has been transformed back to natural and productive land, following the success of an extensive rehabilitation program. Located 90km North-west of Emerald in the heart of Queensland's Bowen Basin, Glencore's Oaky Creek coal mine has rehabilitated more than 133 hectares of land now verdant landscape with native vegetation. The mine is now on track to being safely and sustainably passed on for the next land use. Glencore's General Manager of Environment and Community, John Watson, said the certification covered two areas on the site that now supported native vegetation and had potential
for cattle grazing. "This is the fifth successful certification application in the past three years by a Glencore site in Queensland and the seventh across Glencore's Australian coal business," Mr Watson said. "Achieving Government sign-off on these areas of rehabilitation is reward for many, many hours invested by our workforce in returning mined land to the agreed post-mining purposes." Resources Minister Scott Stewart said areas of Glencore's Oaky Creek coal mine had achieved certification for its progressive land rehabilitation.
"In 2018 the Palaszczuk Government passed important mining rehabilitation legislation to ensure land no longer used for mining is returned to its original state, or better," Mr Stewart said.
Australian NCIG coal loadings in two-week suspension
Australia's Newcastle Coal Infrastructure Group (NCIG) has suspended ship loading for the next two weeks, after a structural assessment showed that immediate work was necessary to repair its operational shiploader. A "deformation of [the] mast structure" of shiploader 1 was identified, according to an NCIG letter to its clients, forcing a halt to shiploading activities as of 11:00 Newcastle time. The incident comes several months after NCIG's other shiploader was taken off line in November because of storm-related damage. That shiploader is expected to return to service in October-December this year, with the latest work having "no impact" on its recovery, NCIG said. Loading schedules are likely to be delayed or reshuffled because of the latest disruption, market participants said. The previous incident caused spot prices to rise because of reduced shipments. As of 10:30 London time, Newcastle April 2021 coal futures traded through the Ice exchange had risen to $94/t, from $90/t yesterday. Argus' weekly Australian NAR 5,500 kcal/kg high-ash coal assessment fell by 52¢/t on the week to $55.09/t fob Newcastle today, as high freight rates dampened demand. NCIG loaded vessels with a combined capacity of 1.7mn deadweight tonnes (dwt) on 1-15 March, compared with 2.4mn dwt a year earlier. Fellow Newcastle operator Port Waratah Coal Services has loaded ships with a combined capacity of 5mn dwt in the first half of March this year, down from almost 6mn dwt a year earlier.
