Has the G7 hammered the last nail into coal’s coffin?

6 months ago 24

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Coal is the worst polluter. It accounts for a fifth of global greenhouse gas emissions. Every year, anthracite, bituminous coal, and lignite do significant damage to the climate.

It was with some fanfare that the UK pushed for an end to coal at COP26 back in 2021 – with limited success. And it was celebrated that heavyweights like the US joined the “Powering Past Coal Alliance” at COP28 in December 2023.

So when G7 ministers signed up to kick coal to the curb in “the first half of the 2030s” in Italy last week, environmentalists’ expectations were piqued.

Are rich countries – the club accounts for 30% of global GDP but only 21% of CO2 emissions – showing that the writing is really now on the wall for coal?

As always with coal, there are two sides to the story: one is the black rock’s dropping share of power generation.

The other is continued high levels of consumption, underpinned by the temptation of cheap and easy power.

The bullish case for the climate is that renewables are well on track to take the ‘power crown’ from coal.

With the G7 agreement, the third and fourth-biggest coal power countries – the US and Japan respectively – are very much on their way out. Even if the G7 clause is not as baked in as climate activists may have hoped for.

Japan’s commitment to ditching coal is particularly exciting for wider Asia – where Indonesia and South Korea take the fifth and sixth spots respectively.

Both in some ways are taking the development path chosen by the Japanese: manufacturing combined with coal power.

Once the government lets go of its ill-advised plans to co-fire coal with ammonia, clean power will win in Japan – making space for Seoul and Jakarta to follow suit.

This mirrors the global trend. Clean-energy think-tank Ember found that while coal produced 35% of the world’s power in 2023, renewables breached 30%, for the first time that year.

Given above-average hydro yields, renewables could surpass coal before 2025.

“2023 was likely the pivot point – peak (carbon) emissions in the power sector – a major turning point in the history of energy,” says Dave Jones Global Insights Programme Director at Ember.

Nowhere is this as well illustrated as in the EU, where coal dropped to its lowest-ever share of the electricity mix at 12% in 2023 – compared to 2022 coal usage plunged by a quarter.

This bears repeating; despite Poland’s continued stubborn support of its coal industry and Germany’s laborious nuclear exit, the black stuff is dying in Europe.

In the world’s eighth-largest coal burner, South Africa, solar has helped utility Eskom avoid the daily multi-hour blackouts the country has become infamous for. However, opposition politicians stress that unconstrained diesel burning is the real cause, boosting the government ahead of upcoming elections.

This leaves China with 55% of global coal power production last year, an absolutely stunning amount.

And thus the more bearish case for the climate, holds that the transition from coal may be far slower. Political commitments to exit fossil fuels may be trumped by hard economics – specifically, the large investment required to switch from cheap and readily available coal rapidly.

Look at the major coal producer Glencore, which may keep its coal business instead of spinning it off, and whose stock is comfortably trading significantly above pre-COVID levels.

Or as Bloomberg’s commodity wizard Javier Blas wrote, echoing the words of former Glencore CEO Ivan Glasenberg: “We’re too polite to admit the global economy remains, even in the age of the climate crisis, as ‘horny as hell’ for coal … But, painfully, it is.”

[Nikolaus J. Kurmayer]

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Europe’s looming power grid roadblock: Transformers – By Nikolaus J. Kurmayer
The 10 times EU Parliament pulled its weight and flexed muscles – By Aurélie Pugnet, Nikolaus J. Kurmayer and others

PRAGUE. Czech far-right leader ready to back von der Leyen, lists conditions. Petr Mach, leader of the Czech far-right coalition for the upcoming European elections, is ready to support Ursula von der Leyen for a second term as European Commission president – but only if she is ready to accept a revote on the Green Deal and the Migration and Asylum Pact, Mach told Euractiv Czechia in an interview. Read more.

SOFIA. Bulgarian court stops largest EU-funded environmental project, citing health risks. On Thursday, Bulgaria’s Supreme Administrative Court stopped the controversial project to build a refuse-derived fuel (RDF) waste incinerator in the centre of Sofia, which would have used EU funding to turn the capital’s waste into heat and electricity. Read more.

Germany to invest in energy and transport sectors in the Baltic States. On Monday 6 May, German Chancellor Olaf Scholz (SDP) made an official visit to Rīga, where he met the prime ministers of the three Baltic states: Evika Siliņa for Latvia, Kaja Kallas for Estonia and Ingrida Šimonyte for Lithuania.

In addition to discussions on support for Ukraine and strengthening the defence of the three Baltic States against the Russian threat, the German leader discussed the development and implementation of joint energy and transport projects.

“Germany is our strategic partner in security and the economy, and today’s talks have confirmed this” declared Evika Siliņa, after referring to the opening of these discussions during her visit to Berlin on 27 March.

Scholz pointed out that Germany is working closely with the Baltic countries in the fields of digital technology, energy and transport, such as the Rail Baltica high-speed train project, which will connect the region’s 3 capitals with the rest of the European Union.

“When it comes to renewable energies, there is great potential in offshore wind and green hydrogen, which we want to exploit together” added the German Socialist leader.

“The Baltic states are first-class partners for us with their experience, but also with their geographical conditions, which we can all utilise together” concluded Olaf Scholz, presaging increased German energy investment in the region. [Nathan Canas]

Hydrogen in … bags? On a visit to Namibia on Thursday (2 May), King Philipp of Belgium was treated to a curious sight: hydrogen filled into 100-litre plastic bags and strapped onto backs – evocative of the highly dangerous gas containers impoverished Pakistanis rely on for cooking – as the flagship result of a hydrogen deal signed in 2021. The plan of the project is to allow for Namibians to use the gas for cooking or to remotely produce power.

When it came to the attention of energy experts, the scheme was quickly eviscerated. Philippe Smet, a researcher at the University of Gent, stressed that the bag contained around 9 grams of hydrogen, at best, containing enough power to bring a whopping 4 litres of water to boil. Instead, giving out batteries – or directly installing solar panels on location – would be the better solution.

“Let’s hope that this project … does not take away subsidies from projects that do make a difference,” he added. [Nikolaus J. Kurmayer]

Net Zero Industry Act and the future of green industrial strategy – By Giada Santana

Contrails – Plane to see – By William Todts

30 MAY. Energy Council
SPRING 2024. First European Climate Risk Assessment
6-9 JUNE: European elections
17 JUNE. Environment Council (Luxembourg)
27-28 JUNE. European Council

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[Edited by Rajnish Singh]