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Coal industry sees relevance in tech embraced by Paris climate agreement

The coal industry is betting it can survive the decarbonization of electricity and industry and keep fossil fuels in the mix by leaning on carbon-capture technology, the head of the World Coal Association told Reuters. Such methods are a key part of the Paris Agreement on climate change, said the organisation's chief, Michelle Manook, and will help keep coal relevant as governments and companies quicken efforts to cut emissions that are warming the planet and polluting the world's densely populated cities. "Go back to Paris," Manook said in a passionate defence of coal. "Go back to the International Panel on Climate Change and they have been really clear and consistently saying that we are not going to get there without CCS." Policies that exclude coal are not helpful, Manook said, adding that "CCS is a proven technology. We know it can be applied." He said though CCS is expensive at present, the costs would come down with economies of scale and that governments needed to provide strong policy support to give companies the confidence to invest in such projects.

Asia snubs IEA's call to stop new fossil fuel investments

Asian energy officials have disputed the International Energy Agency's (IEA) call for no new oil, natural gas and coal investments for the world to be able to reach net-zero carbon emissions by 2050, viewing that approach as too narrow.

The IEA, which has previously championed the oil and gas industry, this week outlined a path to net-zero emissions that suggested stopping new investments in oil, gas and coal supply, retiring coal-fired plants in advanced economies by 2030, and banning sales of new internal combustion engine cars by 2035. Energy companies in Australia, the biggest carbon emitter per capita among the world's richest nations, and officials in Japan and the Philippines said there were many ways to get to net zero. Japan has said that report provides one suggestion as to how the world can reduce greenhouse gas emissions to net zero by 2050, but it is not necessarily in line with the Japanese government's policy while Australia said there was "no one size fits all" for decarbonisation as IEA report doesn't take into account future negative emission technologies and offsets from outside the energy sector.

In climate push, G7 agrees to stop international funding for coal

The world’s seven largest advanced economies have agreed to stop international financing of coal projects that emit carbon by the end of this year, and phase out such support for all fossil fuels, to meet globally agreed climate change targets. In a communique, the Group of Seven nations - the United States, Britain, Canada, France, Germany, Italy and Japan - plus the European Union said "international investments in unabated coal must stop now". Getting Japan on board to end international financing of coal projects in such a short timeframe means those countries, such as China, which still back coal are increasingly isolated and could face more pressure to stop. "work with other global partners to accelerate the deployment of zero emission vehicles", "overwhelmingly" decarbonising the power sector in the 2030s and moving away from international fossil fuel financing, although no specific date was given for that goal. They reiterated their commitment to the 2015 Paris Agreement aim to cap the rise in temperatures to as close as possible to 1.5 degrees Celsius above pre-industrial times and to the developed country climate finance goal to mobilise US$100 billion annually by 2020 through to 2025.

Record CFR China coking coal premium to FOB slips back

Chinese coking coal import prices have hit record premiums above $140/t above fob Australia prices this month as China's ban on Australian supplies lifted prices for non-Australian origin cargoes. But the gap has begun to narrow with mine maintenance expected to tighten fob supplies. The Argus assessment for fob Australia premium hard coking coal tumbled more than $37/t, or 27.6pc, a month after the ban. But it has since erased earlier losses and increased to $150.85/t fob Australia ahead of scheduled maintenance at mines. The Argus assessment for premium hard coking coal on a cfr China basis rose by 86.1pc from $146.50/t cfr as Chinese buyers switched to Canadian and US coal with limited options following the import curb. The cfr-fob spread for tier-one premium low-volatile hard coking coal widened to a record $143.30/t on 18 May from $10.50/t on 1 October 2020. The gap has narrowed to $123.15/t after a 40.8pc rise in fob prices

China’s Australian coal ban distorts prices

China's ban on Australian coal imports is distorting thermal coal trade flows and creating unprecedented price imbalances in the market as the high demand summer season approaches.

The situation has resulted in prices of low-cal-

orific value (CV) Indonesian coal rising above higher-CV Australian material, an unprecedented situation that will likely cause problems for Chinese buyers during the summer months when air-conditioning rises sharply and pushes up power demand. India has become a crucial market for Australian coal after China, the world's largest coal importer, last year imposed an informal ban on Australian imports following calls by Canberra for an investigation into the origins of Covid-19. The Chinese demand outlook for domestic coal remains firm, despite a steep decline in the Chinese futures market last week, with the high demand summer season approaching. Prices of Indonesian GAR 4,200 kcal/kg coal were last assessed by Argus at a 10-year high of $55.98/t fob Kalimantan in May, around 25pc higher than the start of the year, with the increase largely driven by strong Chinese demand. In contrast, higher quality Australian NAR 5,500 kcal/kg prices were assessed on the same day at $55.36/t FOB Newcastle, up by just 14¢/t on the week, with declining demand from India on a severe Covid-19 outbreak

Adani coal contractor asks Australian government for insurance help

A rail contractor to Adani Enterprises Ltd's giant Australian coal project has asked the government for help to obtain insurance that it has not been able to secure from markets, a submission to a parliamentary inquiry showed. BMD Constructions Pty Ltd is building a section of a 210 km (130 mile) rail line that will service Adani's controversial Carmichael mine in northern Queensland state, which is due to start operations later this year. Global insurers, along with banks and other industries, have come under pressure from shareholders and climate activists to stop facilitating fossil fuel mining projects. BMD, in a submission to an inquiry into regulation of investment in Australia's export industries, said it has not been able to obtain public liability insurance, environmental protection insurance or director and officer insurance.

US thermal coal exports poised to grow in coming months of 2021

US thermal coal exports in the first quarter totalled 9.4 million mt, up from 7.5 million mt in the same period last year. According to a European source, "a significant increase in US exports is looming." US export prices have also increased, though to a lesser extent. On May 28, Platts assessed FOB Baltimore, basis 6,900 kcal/kg NAR, at $75/mt, up from $56.50/mt a year ago, and FOB New Orleans, basis 6,000 kcal/kg NAR, at $53.05/mt, up from $43.15/mt last year. Regarding the possibility of whether the rally in coal prices will hold, or a crash is coming, a second US-based coal consultant said he remembered 2007, but adding that the current scenario might be different. "In 2005, China became for the first-time a net importer of coal, and so the global coal market shifted and there was a big run-up in pricing," said the second consultant. "This time seems more like a short-term demand spike due to supply having trouble catching up."

US met coal miners expect more upside

US coking coal producers say spot prices have yet to hit a ceiling, despite the lull in China, as buyers digest surging offer levels and plans by top economic planning body the NDRC to stabilise steel and iron ore prices. While last week's US low-volatile offers approaching $300/t cfr China and a dip in Chinese steel prices has checked buying, suppliers and buyers say demand is unchanged.

Mongolian exports to China are still affected by Covid-19 restrictions at the Ceke and Ganqimaodu border posts, while US, Canadian and Russian alternatives to Australian coal have covered just over half of China's regular imports. China imported 14.74mn t of coking coal in JanuaryApril, down from 27.08mn t a year earlier. Chinese mills have also looked to domestic mines to supply some of their needs. But a supply gap remains, and this is reflected in the rise in US prices since the second half of last year. Premium low-volatile US coals, such as Oak Grove and Blue Creek 7, are a natural fit for China and have led the increase in prices. The rise in Atlantic low-volatile coking coal prices has extended to US high-volatile material since late last year.

Coal Shipments to Power Sector at Lowest Level in 14 Years in USA

Shipments of coal to U.S. power plants in 2020 fell 22% year-over-year, according to data released May 13 by the U.S. Energy Information Administration (EIA). The agency said the U.S. power sector received 428 million short tons (MMst) of coal last year, the lowest amount since the EIA began publishing shipment data in 2007.

The EIA said the COVID-19 pandemic was partly to blame for the drop, as demand for electricity fell nationwide. The agency in April reported that U.S. energy consumption in 2020 fell 7% year-over-year, which it said “marked the largest annual decrease in U.S. energy consumption in both percentage and absolute terms in our consumption data series that dates back to 1949.”

The report also pointed to the ongoing decline of U.S. coal-fired power generation; federal data shows about 9.5 GW of coal-fired generation was shuttered nationwide last year, the fourthhighest total since 2009. The EIA last year said about 25% of the nation’s coal-fired generation capacity was retired in the past decade, including 48 GW of capacity between 2016 and 2020.

Coal miner Cerrejon to halt operations after blockades cut gasoline supplies

Colombian coal mine Cerrejon will halt operations because of two blockades that have prevented from it bringing in supplies of gasoline, the latest trouble for the major miner. Cerrejon, jointly owned by BHP Group, Anglo American Plc and Glencore Plc, has had repeated disagreements with nearby Wayuu indigenous communities and its largest union, which held a three-month strike last year. "Cerrejon is currently suffering two blockades, led by people unconnected to the company, which have impeded the transport of coal and the delivery of water to communities and made the arrival of essential supplies for mining operations impossible," the company said in a statement.

Cerrejon produced 12.4 million tonnes of coal in 2020, down almost 52% from 2019, and its exports fell to their lowest level in the past 18 years amid coronavirus restrictions and falling global demand for coal.

European Union's green push targets shipping emissions

The European Union's ambition to go carbonneutral by 2050 means slicing greenhouse emissions from shipping by 90 percent as part of a far-reaching plan to shake up the maritime economy. Maritime transport accounts for 2.5 percent of greenhouse gas emissions globally and 13 percent of emissions from the EU's transport sector, according to the Commission. A recovery in big economies from the coronavirus pandemic this year and next means seaborne freight -- handling 80 percent of the volume of the world's trade in goods -- is starting to expand rapidly. The European Commission hopes to counter the increase in emissions with a plan to encour-

age the EU's 27 member states and the bloc's neighbours to invest in sustainable solutions, such as more efficient propulsion systems, slow steaming and weather routing. By doing so, it hopes to grab the initiative from the UN's International Maritime Organization, whose own global plan along the same lines is perceived as too slow and inadequate to meet the goals of the Paris Agreement on climate change.

Putin’s Russia is betting coal still has a future

The project to modernize and expand railroads that run to Russia’s Far Eastern ports is part of a broader push to make the nation among the last standing in fossil fuel exports as other countries switch to greener alternatives. The government is betting that coal consumption will continue to rise in big Asian markets like China even as it dries up elsewhere. “It’s realistic to expect Asian demand for imported coal to increase if conditions are right,” said Evgeniy Bragin, Deputy Chief Executive Officer at UMMC Holding. “We need to keep developing and expanding the rail infrastructure so that we have the opportunity to export coal.’’ The latest 720 billion ruble ($9.8 billion) project to expand Russia’s two longest railroads — the Tsarist-era Trans-Siberian and Soviet BaikalAmur Mainline that link western Russia with the Pacific Ocean — will aim to boost cargo capacity for coal and other goods to 182 million tons a year by 2024. Capacity already more than doubled to 144 million tons under a 520 billion ruble modernization plan that began in 2013. Putin urged faster progress on the next leg at a meeting with coal miners in March.”

Poland to take over coal assets from its utilities in 2022

The Polish government will complete its takeover of coal assets from state-run utilities - PGE, Enea and Tauron in the second or third quarter of 2022, a draft document published by the state assets ministry said. Poland generates most of its electricity from polluting coal, but under rising pressure from the European Union and with carbon emission costs surging, it has encouraged more investment in low emission sources.

The government plans to take over the coal assets owned by its utilities, except from hard coal mines, and then transfer them to a new stateowned company. The coal assets are associated with high levels of debt and their continued use has weighed on the financial results of the state-run energy groups. Officials have said the industry needs a new model to help it fund green projects as banks have shied away from backing coal-dependant companies.