Page 4 - AfrElec Week 22 2021

AfrElec COMMENTARY AfrElec

Coal’s appetite for expansion

puts net zero at risk

POLAND
COAL producers are continuing to propose construction and 240mn tpy in planning.
WHAT: and build new mines despite recent calls for About 24% (544mn tpy) of the world’s pro-
Panel no indent global coal output needs to fall by 11% per year posed mine capacity is located in four Chinese
between now and 2030 if the world is to limit provinces and regions: Inner Mongolia (234mn
WHY: global warming to 1.5°C and achieve the Paris tpy), Xinjiang (123mn tpy), Shaanxi (95mn tpy)
Panel no indent climate targets. and Shanxi (92mn tpy).
New research from Global Energy Monitor The majority of proposed coal mines in
WHAT NEXT: found that mine proposals now stood at 30% of China and India are sponsored by state-owned
Panel no indent current global output, putting at risk calls for a enterprises (SOEs) wholly or partially owned by
rapid decline in coal output and consumption the government, meaning taxpayer money con-
and industry and power generation. tinues to subsidise mine projects to fuel province
The report, called Deep Trouble: Tracking and state economies.
Global Coal Mine Proposals, warned that the The report said majors such as Glencore,
global coal industry was in fact chasing expan- Mechel and BHP still remained invested in new
sion, with 2.277bn tonnes per year (tpy) of new mines and mine expansions, though small and
coal mining capacity currently under develop- independent firms have shown the greatest
ment, the equivalent of 30% of 2019 global out- appetite for new projects, especially in Australia
put of 8.135bn tonnes. and Russia.
Global Energy Monitor called for new mine Nearly two-thirds of mine proposals are
development and extensions to existing produc- “greenfield” developments, signalling the indus-
tion to halt immediately if the world is to meet try’s willingness to break ground on new mines
its temperature targets and to reach net zero by that tend to lock in more long-term production
2050. and more future emissions than existing mines.
The research divided capacity under develop- The remainder are “brownfield” developments
ment into 1.663bn tpy (75%) that is in the very that expand the capacity of existing operations
early stages, and could be cancelled. The other or recommission idle mines.
614mn tpy is already under construction. While mega coal mine projects often attract
If all these mines were built, then this pro- intense global opposition from climate activists
posed capacity could boost supply to over four and pose a financial risk for investors, the indus-
times a 1.5°C-compliant pathway. try is primarily reliant on mid-size operations
However, the current moves by government with lower public profiles to boost supply. The
and investors towards the energy transition median size for a new coal proposal is 3.5mn tpy.
could mean that up to $91bn of coal investment Although power generation from the world’s
turns into stranded assets. coal plants has been in decline since 2019, ther-
The major threat to coal is emerging govern- mal coal operations still dominate, making up
ment regulation, such as the EU’s Green Deal, 71% of proposed mine capacity. However, in
which threatens to price coal out of the market North America the numbers are reversed, with
by putting a price on carbon. metallurgical coal for steel-making accounting
for 70% of proposed capacity.
Findings The emissions from coal mine projects now
The report found that if all proposed coal mine on the drawing board would total between
capacity currently under development were real- 5,000 and 5,800mn tonnes of CO2 equivalent
ised, coal production in 2030 will be over four (CO2e) each year from combustion and meth-
times the 1.5°C-compliant pathway ane leakage.
It identified China, Australia, India and Rus- Coal mines and related infrastructure such as
sia as the key drivers of coal expansion, account- ports and railways are capital-intensive projects
ing for 77% (1,750mn tpy) of development. that cost tens of millions of dollars per million tpy
China has 452mn tpy of coal mine capacity mined to open. Yet the prospects of a low-carbon
under construction and another 157mn tpy in transition and tighter emission policies put these
planning; Australia has 31mn tpy under con- projects at risk of shutti It identified China, Aus-
struction and 435mn tpy in planning; India has tralia, India and Russia as the key drivers of coal
13mn tpy under construction and 363mn tpy expansion, accounting for 77% (1,750mn tpy) of
in planning; and Russia has 59mn tpy under development.

P4 www. NEWSBASE .com Week 22 03•June•2021