Wednesday, June 9, 2021

GWPF Newsletter - Build back blacker: India, Australia, China, Russia pushing ‘massive’ coal expansion


OPEC leaders mock IEA’s “la-la land” 2050 Net Zero roadmap

In this newsletter:

1) Build back blacker: India, Australia, China, Russia pushing ‘massive’ coal expansion
Economic Times of India, 5 June 2021
2) China, India & US spur rebounding global CO2 output
E&E News, 2 June 2021

3) 'Coal comes out as the big winner': Biden climate goals to take backseat in biggest U.S. power grid
Bloomberg News, 1 June 2021
4) OPEC leaders mock IEA’s “la-la land” 2050 Net Zero roadmap
Bloomberg, 3 June 2021
5) G7 nations invest more in fossil fuels than green energy despite lofty pledges, 2 June 2021
6) Vijay Jayaraj: Despite COP26 pressure, Asia and Africa remain committed to coal
GWPF Energy, 2 June 2021
7) Francis Menton: Don't get discouraged about the preposterous plan to eliminate fossil fuels
Manhattan Contrarian, 5 June 2021

8) And finally: UK steel unlikely to survive without protection or nationalisation
Financial Times, 7 June 2021

Full details:

1) Build back blacker: India, Australia, China, Russia pushing ‘massive’ coal expansion
Economic Times of India, 5 June 2021

Coal producers are actively pursuing 2.2 billion tonnes per annum of new mine projects around the world, a growth of 30 per cent from current production levels, a new report from Global Energy Monitor said on Thursday.

The first-of-its-kind analysis surveyed 432 proposed coal projects globally and found a handful of provinces and states in China, Russia, India, and Australia are responsible for 77 per cent (1.7 billion tonnes per annum) of new mine activity. If developed, these proposed projects boost supply to over four times the 1.5 degrees Celsius-compliant pathway necessary to meet the goal of the Paris climate agreement.

While three-fourths (1.6 billion tonnes per annum) of proposed coal mine capacity is in the early stages of planning and thus vulnerable to cancellation, the report finds one quarter (0.6 billion tonnes per annum) of proposed mine capacity is already under construction. The prospect of a low-carbon transition and tighter emission policies put these projects at risk of becoming up to $91 billion in stranded assets.

Ryan Driskell Tate, a research analyst at Global Energy Monitor and lead author of the report, said, “While the IEA has just called for a giant leap toward net zero emissions, coal producers’ plans to expand capacity 30 per cent by 2030 would be a leap backward. Demand for coal is plummeting and financing for new coal projects is drying up. New mines and expansions of existing mines will be producing coal for a world in which coal is unviable economically, and untenable for the environment.”

Full story
2) China, India & US spur rebounding global CO2 output
E&E News, 2 June 2021

The world economy is roaring again, and it has the emissions to prove it. Global carbon dioxide emissions were up 7.4% through the first four months of the year, according to Carbon Monitor, an academic research project that monitors daily CO2 output worldwide.


The increase was led by China, where factories have rumbled back to life, stoking demand for coal-fired electricity and sending emissions soaring 18% over 2020 levels. India recorded a nearly 15% jump in emissions, driven in large part by increased coal generation, while emissions in the European Union were up almost 10%. The United States, by contrast, posted a relatively modest increase of 3.3%.

The numbers represent a snapshot in time. Part of the reason the emissions increase in China appears so large is because the country was in a strict economic lockdown during the first part of 2020. Its economy has steadily improved in the second half of the year.

India's emissions figures are likely to decline once the full extent of a withering wave of coronavirus infections this spring is accounted for. And U.S. motorists are just now hitting the road for the summer driving season, buoyed by a mass vaccination rollout that has seen states lift most of their remaining restrictions amid a plunge in new coronavirus cases.

The figures nevertheless illustrate how the world remains strikingly similar to its pre-pandemic self. Global emissions through April were just 1.2% lower than the first four months of 2019.

"In the end, we essentially have the same energy system that we had two years ago," said Nathan Hultman, director of the Center for Global Sustainability at the University of Maryland. "We're ramping up based on old infrastructure."
That said, there are signs that the world's economy has shifted over the past 17 months.

Power-sector investment, which has risen steadily for years, eclipsed investment in oil last year for the first time, according to the International Energy Agency's "World Energy Investment 2020" report. Investment in power has been spurred in large part by renewables, which last year weathered a slowdown in energy investing better than their fossil fuel counterparts. Renewable generation increased 3% in 2020 even as global electricity demand fell. Coal and gas generation were both down for the year, the IEA said in its "Global Energy Review 2021."

But if 2020 underlined the way the world's energy system is changing, 2021 underscores how much remains the same. The IEA thinks global coal demand will increase by 4.5% this year, pushing worldwide coal consumption above 2019 and toward its 2014 peak. Eighty percent of the growth in coal demand is expected to come from Asian countries, with 50% from China alone.

China's emissions grew by 14.5% in the first quarter of the year, the largest quarterly increase in more than a decade, according to a review of government data by Lauri Myllyvirta, an analyst who tracks the country's emissions at the Centre for Research on Energy and Clean Air. Around 70% of the increase was due to increased coal consumption. China's appetite for coal was stoked by increased industrial demand and a decrease in hydroelectric generation, Myllyvirta wrote in an analysis for Carbon Brief.

China is hardly the only country where coal generation has increased this year. In India, where coal is the foundation of the power grid, emissions surged thanks to a 21% increase in CO2 output from power plants.

Whether that trend continues in the wake of a devastating wave of coronavirus infections remains to be seen. Emissions forecasts are largely dependent on economic factors. While India's economic recovery has been hindered by the most recent wave of infections, the Organisation for Economic Co-operation and Development still thinks the country's economy will grow by almost 10% this year. That is the fastest rate among the Group of 20 nations.

Coal generation has even increased in countries where the fuel is in sustained decline. U.S. coal consumption was almost a third higher in the first quarter of 2021 compared with the same time last year, according to the U.S. Energy Information Administration's May "Short-Term Energy Outlook." Carbon Monitor thinks that helped spur an almost 13% increase in U.S. power-sector emissions.
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3) 'Coal comes out as the big winner': Biden climate goals to take backseat in biggest U.S. power grid
Bloomberg News, 1 June 2021
The power grid serving nearly 20 per cent of the U.S. population is about to throw a roadblock in President Joe Biden’s plan to decarbonize the electricity sector.
PJM Interconnection LLC, which keeps the lights on for 65 million people from Chicago to Washington, D.C., is expected to clear a fleet of new natural gas plants — and even extend the lives of some coal plants — when it releases the results of its massive electricity auction Wednesday. That’s because Trump-era changes to the way the auction is structured give a leg up to fossil fuels, at the expense of zero-carbon sources such as nuclear, wind and solar.

“The market has been trending toward renewables, but this is pulling it back,” said Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative. “It’s fighting the future.”

As much as 4 to 6 gigawatts of new gas capacity and several clunker coal plants could clear the auction, according to some estimates, while nuclear and renewables are expected to be the big losers. Such an outcome would further entrench fossil fuels in the biggest U.S. power market, and runs counter to the president’s goal of eliminating greenhouse gases from the power industry by 2035.

PJM is already one of the most carbon-intensive grids, with 60 per cent of its electricity coming from coal and gas. The auction, intended to secure a year’s worth of power supplies at the lowest cost for consumers, can help to determine the region’s power mix for decades to come. Because participating generators rely on it for the bulk of their revenues, plants that clear the auction have an incentive to continue operating for as long as they can. The last auction, in 2018, generated more than US$9 billion in revenue for generators.

The latest auction is the first to run under the new rules imposed by the Trump administration after two years of delays and contentious wrangling between power providers, PJM and federal regulators. The new structure creates a price floor for some bidders, effectively disadvantaging nuclear and renewables that receive state subsidies while making it easier for costlier fossil fuels to compete.

“Coal comes out as the big winner,” said Brianna Lazerwitz, an analyst for BloombergNEF. “Nuclear would be hit the hardest.”
Full story
4) OPEC leaders mock IEA’s “la-la land” 2050 Net Zero roadmap
Bloomberg, 3 June 2021

MOSCOW (Bloomberg) --The world’s largest petrostates rejected calls for a rapid shift away from oil and gas, warning that starving the industry of investment would harm the global economy.

If the world were to follow the International Energy Agency’s controversial road map, which said investment in new fields would have to stop immediately to achieve net-zero carbon emissions by 2050, “the price for oil will go to, what, $200? Gas prices will skyrocket,” said Russian Deputy Prime Minister Alexander Novak.

His warnings were echoed by the energy ministers of Qatar and Saudi Arabia, who said they will keep expanding their oil and gas facilities and warned others against the consequences of starving the industry of cash.

The “euphoria” around the transition to clean energy is “dangerous,” Qatar’s Energy Minister Saad Sherida Al Kaabi said at the St Petersburg International Economic Forum in Russia on Thursday. “When you deprive the business from additional investments, you have big spikes” in prices.

It’s no surprise that top officials from the world’s largest fossil fuel exporters want to see the industry continue for decades to come. Their comments are illustrative of the vast gulf between the world’s current carbon-based energy system and the changes required to prevent damaging climate change.

Saudi Energy Minister Prince Abdulaziz bin Salman has already dismissed the IEA road map, which would limit the average increase in global temperatures to 1.5 Celsius, calling it a “la-la-land” scenario. When asked on Thursday if oil is dead, he responded by saying the kingdom is increasing its production capacity.

Qatar is pushing ahead with its $29 billion expansion of liquefied natural gas facilities and will decide whether to take international partners in the project by the end of this year, Al Kaabi said. Oil and gas will still be around for decades to come, Novak said.
5) G7 nations invest more in fossil fuels than green energy despite lofty pledges, 2 June 2021

The G7 nations have been pumping more in fossil fuels than in clean energy since the start of the pandemic, despite headline-grabbing pledges for ‘building back greener’, a new report found on Wednesday.


Since the pandemic started, major industrialized nations, including the U.S. earlier this year, have pledged to achieve net-zero emissions by 2050 and strengthened policies to support renewable energy, electric vehicles, and energy storage.
Yet, this was not enough, according to the analysis published by charity Tearfund, in collaboration with the International Institute for Sustainable Development (IISD) and the Overseas Development Institute (ODI). 
The Group of Seven most industrialized nations—Canada, France, Germany, Italy, Japan, the UK, and the U.S.—committed between January 2020 and March 2021 more than US$189 billion to support coal, oil, and gas, while clean forms of energy received only $147 billion, the analysis showed.
“These investments – including the many direct support measures and environmental deregulations adopted in favour of the fossil fuel industry – are inconsistent with the steep decline in emissions needed to limit global warming to 1.5°C and with G7 countries’ own net-zero targets,” the authors of the report wrote.

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6) Vijay Jayaraj: Despite COP26 pressure, Asia and Africa remain committed to coal
GWPF Energy, 2 June 2021

With Asia and Africa defiant in their pursuit of coal while the US and Russia continue to feed the growing global appetite for coal, the end of coal is nowhere near. Instead, we might witness a renewed global demand for coal.

Russia aims to double coal exports to China
The head of the United Nation’s 2021 Climate Summit, Alok Sharma, has demanded that countries must abandon coal and the pathway for the same must be laid out at the Conference of Parties (COP) 26 meeting that is scheduled to happen at Glasgow in November this year.

Last month, Sharma said, “The days of coal providing the cheapest form of power are in the past. And in the past they must remain. The coal business is, as the UN secretary general [António Guterres] has said, going up in smoke. It’s old technology.” Sharma’s call for global coal-use ban echoes that of Joe Biden, Boris Johnson, and other anti-fossil administrations, all of whom are determined to unethically force developing countries into submitting to their anti-fossil policies.

Even the International Energy Agency (IEA), which is supposed to represent the energy needs of those who are in dire need of energy access, has aligned itself with the anti-fossil fuel party. In its recent report titled “Net Zero by 2050”, the IEA has asked for “investors to stop funding new oil, gas and coal projects beyond this year” in order to meet the goals of the Paris climate agreement.

However, the energy demand reality and the market scenario on ground indicates that these calls to abandon coal are nothing short of fantasy. Asia and Africa are showing no signs of reducing their coal appetite and are in fact on track to increase their coal dependency.

Asia’s energy superpowers determined to burn more coal

Surprisingly, the initial pushback to IEA’s call for fossil disinvestment came from Japan, a nation that recently promised to push back against coal. Reacting to IEA’s call for ban on coal funding, Japan stated, “The 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.” Japan is the third largest consumer of fossil fuels in Asia. The Asian market is dominated by China and India.

China, especially, is the global leader in coal consumption. More than 25% of global carbon emissions is from China. Despite promising that it would achieve net-zero by 2060, Beijing continues to increase coal consumption and export of coal-technology.  Anti-coal campaigners say that China’s latest 5-year plan falls well short its tall claims to reduce coal consumption. “China’s five-year plan is underwhelming and shows little sign of a concerted switch away from a future coal lock-in,” said Swithin Lui, of NewClimate Institute.

China funds more than 70% of all new coal plants being built globally. It is reported that, “Nearly all of the 60 new coal plants planned across Eurasia, South America and Africa –70 gigawatts of coal power in all – are financed almost exclusively by Chinese banks.” Among the most recent of its coal investment is the $3 Billion coal plant in Zimbabwe. With its “Belt and Road initiative”, China is helping around 150 countries with fossil fuel production and coal technology. Beijing is unlikely to compromise on its Belt and Road Initiative, especially when most of the countries relying on its help are developing countries that desperately seek fossil fuel driven energy growth.

China’s neighbour India is the second largest coal consumer in the world. Unlike China, India’s coal investment outside its borders is very limited. Nevertheless, it is one of the largest coal markets in the world and is fully committed to increasing coal capacity, the fuel that supplies more than 70% of its annual electricity consumption each year.

Signs of a healthy coal demand are very visible in India, where the economy is looking to recover from the first and second wave of COVID-19.  Coal India Ltd (CIL), the state coal producer and the World’s largest coal miner, is expecting stock prices to rebound in 2021 after renewed demand from for coal intensive commodities such as steel, aluminium, cement and others. One of CIL’s arm has registered a growth of 112 percent in coal production (4.84 Million Tonnes) in April 2021.

In order to enhance coal production further, the country has allowed increased participation of private miners. Miners like EMIL, VFR and Adani – all have contributed to the increase in production. The Indian government is also in the process of selling mining rights and the second leg of auction process began in March this year, with 67 mines for sale. The Coal Ministry has now reported that there has been “tremendous response to second tranche of commercial coal mines auction.” It added that “more prospective bidders are in the process of registration and purchase of tender documents from the auction portal.”

Indian government officials have gone on record to reiterate the importance of coal to the country’s future energy prospects and continue to announce major investments to boost production. Coal ministry’s additional secretary M Nagaraju said that India must make more coal-investment in “research and applications of AI and IoT for mining as these technologies will be cost-saving leading to more profits; high levels of productivity, improved quality and bring efficiency in the system.”

India has also defended its coal sector as “harmless” and that the impact from coal producers is insignificant in terms of the country’s emissions. Coal India Ltd accounted for only 0.65% of the country’s total carbon dioxide emissions of 2,616 million tonnes (MT) during the year 2019-20. In contrast to the usual narrative, CIL claims that it actually improves the country’s environment through planting trees. CIL has “planted around 78 lakh saplings with a survival rate of 85 per cent spread over 3,212 hectares, under afforestation programme.” CIL has so far planted over 40,000 hectares of saplings and aims to add another 10,000 hectares by 2030, some of which they believe will offset the emissions.

Emerging coal hubs in Africa

Like Asia, Africa too is expected to increase its dependency on coal and decrease it.

For Africa, coal is not an option, but a necessity. Energy access is the foundation of any economy and much of Africa is nowhere close to alleviating the rampant energy poverty in the continent. Homes in dark, hospitals without electricity for medical equipment, and industries struggling to get uninterrupted supply of electricity – the story remains the same in most of sub-saharan Africa. Fossil fuels are the only energy source that can bring immediate change to the energy scenario in Africa. Scientific American reported that, “more than 60 percent of Africans are without basic energy services and coal, oil and natural gas may be a necessary bridge.”

Sharma and Biden’s call to immediately end coal funding does not bode well with Africa.  Dmitry Bokarev, New Eastern Outlook, notes that the “development of coal power in Africa may cause protests from Western environmentalists, who haven’t experienced hunger, poverty, and lack of electricity for a long time.” He also points out that Africa’s upcoming coal plants should not be compared to the polluting old coal plants of the 20th century, “A number of coal technologies have already been developed and are being implemented under the HELE (high efficiency, low emission) principle. These technologies include so-called supercritical coal plants, coal gasification, and other methods that produce noticeably more electricity while burning the same or even less coal, resulting in less harmful emissions into the atmosphere.”

Even a reasonably developed African nation like South Africa needs undisrupted supply of coal. Coal accounts for 90% of South Africa’s energy and is set to remain South Africa’s leading source of electricity in 2030. 19 of Africa’s 34 coal plants are in South Africa. The country has also seen increased fossil fuel trade with China. China is involved in the “construction of a complete energy and metallurgy industrial chain” at the Musina Makhado SEZ in South Africa. The unit will “include a coal washery, a coking plant, a ferrochrome plant, a ferromanganese plant, a high manganese steel plant, a stainless steel plant and a cement plant, alongside a coal-fired power plant.”

Leaders in Africa are likely to persist with coal in the coming decades. A recent study reported that around 1250 new coal and gas plants are being planned in Africa alone. The continent would count on the  abundant availability of coal, the cost of generation, the improvement in coal burning technologies, and the moral quotient of being the continent with the least per capita CO2 emitters. Emission from Africa accounts for only 1 – 1.5% of global greenhouse emissions. “Many plans for new coal-fired power plants have not even been implemented yet and even if they were realised, the impact on global climate change will not be noticeable,” says Stephen Karekezi, from Africa Energy Policy Research.

Despite the looming uncertainty surrounding fossil fuel funding from the West, the countries in Africa are upbeat about coal powered economies and the thirst for coal is already visible in countries like Botswana, Tanzania, and Mozambique. Even big banks continue to be indirect funders of coal projects. HSBC is now confirmed to be indirectly aiding the development of more than 70 new coal plants in Asian and African countries, including Bangladesh, China, India, Indonesia, Japan, Madagascar, Pakistan, the Philippines, South Africa, South Korea and Vietnam.
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7) Francis Menton: Don't get discouraged about the preposterous plan to eliminate fossil fuels
Manhattan Contrarian, 5 June 2021

It’s easy to get discouraged about the “climate” scare, otherwise known as the socialist takeover of everything under the cover story of a faux moral crusade to “save the planet.”
Sometimes it seems that all you can hear are preening politicians and academics and journalists and “scientists” shouting about the immediate “existential crisis” that requires the prompt end of fossil fuels and that your energy use (but not theirs) must be severely restricted.
Just today, UN Secretary-General António Guterres issued a statement warning that the next ten years are our “final chance” to avert a “climate catastrophe”:
"We are rapidly reaching the point of no return for the planet. We face a triple environmental emergency — biodiversity loss, climate disruption and escalating pollution. . . . Science tells us these next 10 years are our final chance to avert a climate catastrophe. . . ."

The few people pushing back get shouted down and drowned out. How could this possibly end well?
When I discuss this subject with my climate skeptic friends, most are amazed that I remain an optimist. But good reasons are on my side. While we realists may not have the megaphone at the moment, I am very confident that energy realism will ultimately win out, and much sooner than you might think. The reasons are simple: the magical “renewables” don’t work and are ridiculously expensive. And when the people figure this out, as they inevitably will, the anti-fossil-fuel jihad can quickly turn toxic for the left.
As background, recall a story from my own New York State that I covered a little over a year ago. Economic growth in certain regions of the state — particularly Brooklyn, Queens and Long Island — had led the local gas utility, National Grid, to propose a new pipeline under New York Harbor to provide needed additional capacity; but the pipeline got blocked by the Governor’s minions at the behest of anti-fossil-fuel zealots.
By the fall of 2019 the utility had run out of pipeline capacity and started refusing natural gas hookups to new customers. Quickly 3000 customers had been refused, and a political outcry had begun. If the Governor actually believed his own climate rhetoric, at that point he would have stood up and admitted that he was the one who had blocked the pipeline and told the people that they needed to do without the gas and must get far-more-expensive electric heat and stoves for the good of the planet. But no. Instead, the Governor quickly caved to the homeowners and businesses who wanted the gas, and cynically issued statements placing the blame on the utility. The utility responded by implementing a program of sending the gas in compressed form in thousands of trucks. As far as I can determine, that temporary non-solution remains in place today. Meanwhile, the state is supposedly doubling down with a new plan to ban all new natural gas heating by 2025. Do you believe it will actually occur?
The fact is that fossil fuels are cheap and they work and, when confronted with the reality of what doing without them actually means, the people are not going to give them up.
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8) And finally: UK steel unlikely to survive without protection or nationalisation
Financial Times, 7 June 2021
The potential costs of Net Zero are eye-watering and cannot be met by industry alone. 
Britain’s steel industry is never far from a crisis. In recent months, the woes plaguing Liberty Steel and its controversial owner Sanjeev Gupta have captured the headlines.

But the sector faces a much bigger and more existential threat than uncertainty over Gupta and the future of Liberty Steel: how to “green” steelmaking.

Britain’s commitment to reaching net-zero emissions of greenhouse gases by 2050 has raised the stakes for the industry and the 33,000 people it employs.

In the UK, steel is the biggest industrial emitter of carbon dioxide. The Climate Change Committee, the government’s independent advisory group, has suggested steel production needs to be “near-zero” emissions by 2035 — a hugely ambitious target.

Ministers have stressed the strategic importance of the industry’s role in post-Brexit Britain, but concern is growing among some executives that a comprehensive strategy to secure its future and put it on a sustainable footing is still missing. 

Domestic producers have for years struggled to stay competitive against lower-cost international competition and global oversupply.

Now they face the additional burden of cleaning up their emissions. The potential costs are eye-watering and cannot be met by industry alone. 

Chris McDonald at the Materials Processing Institute, a steel research group, estimated that to make green steel a reality would require £6bn-£7bn of investment on sites themselves, on top of supporting infrastructure. 

“Where is the money going to come from? That’s the tough question,” he said.

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The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at

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