ENVIRONMENT

World not ready to quit coal

THE compelling need for coal as part of the energy mix over the next two decades by developing Asian nations such as India has ultimately ensured the medium-term future of the Australian coal industry.

Coal is a sustainable development issue, crucial to economic, social and environmental progress.

Coal is a sustainable development issue, crucial to economic, social and environmental progress.

India would not buckle under pressure from wealthy nations at COP26 in Glasgow to agree to a resolution to "phase out" coal by 2030. Instead, India - and a host of other coal dependent nations including Australia - have agreed to wording that says coal should be "phased down" by 2030.

Both India and China have enormous coal industries and to expect them to dismantle their respective industries in less than 10 years would lead to massive social and economic upheaval resulting in loss of life and a reversal of improved living standards achieved over the past 30 years. 

Australia is the world's largest exporter of coal with about 500,000 million tonnes per annum and $49 billion in value. However, the government-controlled Coal India produces more than Australia's entire exports by itself.

China is the world's largest miner and consumer of coal. Its production is more than seven times that of Australia at about 3.7Btpa.

Coal has helped China produce low cost manufactured goods because of its relative cheapness and abundance.  

Despite this, China surprised the summit by joining with arch competitor the US for a declaration on enhancing climate action in the 2020s.

COP26 resolved to deepen focus on the Paris Agreement temperature goal to pursue limiting average global warming to 1.5C.

Prior the summit, Australian prime minister Scott Morrison produced a plan that did not commit to a stronger 2030 target, and rejected phasing out coal, oil or gas.

His plan relied on projected technologies that had not yet been developed.

Greenpeace Australia Pacific CEO David Ritter said before COP26 the Australian strategy was meaningless without steep cuts to emissions this decade and would not stand up on the global stage.

Greenpeace was wrong, because developing Asian nations were overwhelmingly keen to take up new technology such as carbon capture utilisation and storage that lets them meet their need for power while also ensuring they help combat emissions.

The world is taking this challenge seriously, however, it should not disadvantage newly industrialised nations that need low-cost energy from coal to keep their economies functioning.

A report by the ASEAN Centre for Energy and the World Coal Association found ASEAN countries will require approximately 234 gigawatts of additional coal capacity by 2040 to meet growing energy demand, however, with modest investment in clean coal technologies there is capacity to significantly cut emissions.

Analysis compiled in the Clean Coal Technology in ASEAN report indicates US$8.7 billion investment would incentivise the coal industry to deploy ultra-supercritical technologies such as high efficiency low emissions, carbon capture utilisation and storage and pollution control technology.

This is not a big outlay when the Glasgow Financial Alliance for Net-Zero, which has US$130 trillion in funds under management, is pledging to assist achievement of Paris temperature goals.

The Global Methane Pledge seeks to cut methane emissions 30% by 2030, however, this was not endorsed by Australia.

This is good news for the underground Australian coal industry, which constantly battles fugitive methane emissions from its operations especially in high gas regions such as the Illawarra in New South Wales.

A World Coal Association spokesman told Australia's Mining Monthly that the COP26 consensus agreement spoke to a growing appreciation and understanding about coal as part of the climate change solution, as the original articles of the Paris Agreement intended. 

"As an organisation of responsible and innovative coal participants, which made a commitment to support the Paris Agreement years ago, we are pleased that world leaders have started to question the worth of coal against the dearth of not having it," he said.

"Coal is a sustainable development issue, crucial to economic, social and environmental progress. Billions of people depend on it and billions will going forward.

"Through COP26, like-minded developing countries have demonstrated a like-minded commitment to reach a decarbonised future in a realistic transition, which does not undermine their sovereign right to modernise and progress accordingly.

"There is now a definite signal that countries must listen and respect each other, accepting all fuels and all technologies, and understanding that different countries will have different ways of reaching the same, shared goal. That's what a Just Transition really means."

Carbon Market Institute CEO John Connor said COP26 in Glasgow was never going to resolve all issues in the pursuit of Paris Agreement temperature goals.

"But it has galvanised significant action and provided a rules-based framework for international cooperation and carbon markets," he said.

"The challenge is now clear for governments, business and other carbon market participants to deliver investment and markets that achieve these climate goals."

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