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Coal: The end is nigh — or is it?

Coal: The end is nigh — or is it?

Infografik Emmissionsbilanz Energieträger 2020 EN

In the midst of a global energy crisis, global coal power emission levels are at pre-pandemic heights in India and China. The onset of winter and rising oil and gas prices have combined with the energy needs for rebounding post-COVID countries to increase coal demand. 

The renaissance of the most carbon intensive fossil fuel was further reinforced when a commitment to a coal “phase-out” in the Glasgow Climate Pact was weakened to a “phase-down.”

Going into COP26, the UK president of the conference Alok Sharma said he hoped the summit would “consign coal power to history” in a bid to keep global heating to around 1.5 degrees Celsius (2.7 Fahrenheit). That didn’t quite happen. 

“A green light for more coal production,” was how former Australian resources minister, Matt Canavan, responded to the last-minute diluting of the plan to exit coal. 

“The countries in our region, like India, like China, like Southeast Asia, are growing and developing their industries, and their demand for coal almost has no limit,” he said in a television interview. 

Experts acknowledge that the weak language in the Glasgow agreement could slow down the momentum toward a coal phase out by 2030 or 2040, at the earliest. 

But the current spike in coal demand will be a “short-term phenomenon” linked to a strong post-lockdown economic rebound, believes Catharina Hillenbrand von der Neyen, head of research at climate think tank, Carbon Tracker. “I strongly warn against the notion that this is a revival of coal.” 

Revival unlikely not to last 

Neyen expects coal to revert to its pre-COVID slide driven by cheaper renewables — including in China, which generated More than half of the world’s coal-fired power in 2020. 

“The structural trend is for steeply falling load factors,” she said, meaning that with competition from renewables, coal plants aren’t running at full capacity, rendering them unprofitable. While new coal power plants are being built, they contribute to an oversupply that only exacerbates the problem. This has resulted in 27% of the world’s coal fleet being lost. become unviableCarbon Tracker says that this is the case.

“If I could put all my eggs into the coal basket again, you might find they drop onto the floor quite quickly,” said Hillenbrand von der Neyen of coal’s precipitous long-term outlook. 

Infografik Emmissionsbilanz Energieträger 2020 EN

Gaurav Ganti, a researcher with Berlin-based think tank Climate Analytics, agrees. “This short-lived renaissance is unlikely to persist, given strong headwinds from low-cost renewables,” he said. 

Even though India and China are using coal for their COVID recovery efforts, the reality is that there have been a 76% drop in the number of coal-fired power plants since 2015, when Paris Agreement was signed. According toE3G, a climate change think tank. This is equivalent to China’s entire coal production. 

There is no room for complacency 

China was responsible for approximately 75% global coal investment for 2020. However, its decision in September to end funding of coal projects beyond its shores, and to peak its own coal use by 2025 as part of its 2060 net-zero emissions plan, is a further signal of coal’s inevitable demise, said Ganti. 

“However, there is no room for complacency,” he added — even despite the broader commitment by 47 countries at COP26 to phase out coal via the Global Coal to Clean Power Transition Statement. Our research shows that coal-fired power must be eliminated by 2030 in developed countries and 2040 worldwide to keep to 1.5 C, which is the Paris Agreement’s warming limit. For developing countries to ditch coal, they will need substantial international support. 

And despite the Glasgow conference backing away from firm language on ending coal, individual countries are bringing their phase-out deadlines forward.  

Germany’s new governing coalition — comprising Social Democrats (SDP), Greens and Free Democrats (FDP) — is aiming for a 2030 coal exit, eight years ahead of the country’s previous schedule. 

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Germany is Europe’s second largest coal consumer and producer, but even amid a nuclear energy phase-out, it already managed to halve coal power consumption between 2010 and 2020. Although coal energy demand rose in Germany in 2021 due to unusually low weather conditions, this was not the fault of nuclear energy. 

Financing a global phase-out of coal 

Germany, along with the US and other EU countries, is helping to finance South Africa’s coal phase-out. South Africa is Africa’s largest emitter of fossil fuels and produces 90% of its energy from it. Germany’s then-environment minister described the $8.5 billion (€7.3 billion) initiative agreed to in Glasgow to fund the shift from coal to clean energy as a potential “blueprint” for other regions. 

Portugal, which had been planning to phase out coal-fired energy for two years, has now stopped using it completely. 

Fossil fuel powerhouse Ukraine has also We are determined to end coal-power generation by 2035, or 2040 at the latest. The country joined the Powering Past Coal Alliance at COP26. This coalition of national governments and businesses committed to an accelerated coal outage. 

Assets of stranded coal 

Researchers are warning that governments who stick with coal could be set to lose billions in stranded assets — as well as hundreds of thousands of jobs — as the world decarbonizes to limit heating to below 2 degrees Celsius. A stranded asset is something that had value or generated income but no longer does. 

According to a June 20,21 Report, one-third of coal mines in Europe, North America and Australia will become stranded assets by 2040 if countries meet their climate targets. Australia, for example, could lose $25 billion (€22 billion) per year in this scenario. Globally, 2.2 million jobs could be at risk unless countries act quickly to transition to a cleaner energy system.  

However, economics isn’t the only reason to leave coal. “Governments face a choice here,” said Gaurav Ganti. “Invest in the fossil fuels of yesterday and risk stranded assets, or invest in renewable energy to get us on a 1.5 C pathway.”

Edited by Ruby Russell/Jennifer Collins



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