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Does coal have a role in providing affordable and clean energy?

On Monday, 9 July 2018, the European Association for Coal and Lignite (EURACOAL) hosted a dinner debate in the European Parliament on affordable and clean energy, this being the UN Sustainable Development Goal No. 7. The event was organised by the European Energy Forum and chaired by Prof. Jerzy Buzek MEP.

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Left to right: Hervé Martin (EC), MEP Jaromír Kohlíček, Haitze Siemers (EC), Michał Drabik (UNECE), MEP Jerzy Buzek, Tomasz Rogala (EURACOAL/PGG), Magdalena Chawuła-Kosuri (EURACOAL) and Brian Ricketts (EURACOAL) in the European Parliament, Brussels, 9 July 2018
click to download presentation

Mr. Tomasz Rogala, President of EURACOAL and Chairman of the Polish Mining Group (PGG – Polska Grupa Górnicza S.A.), Mr. Michał Drabik, Economic Affairs Officer in the Sustainable Energy Division at the United Nations Economic Commission for Europe (UNECE), Mr. Haitze Siemers, Head of Unit for “New energy technologies, innovation and clean coal” in DG Energy and Mr. Hervé Martin, Head of Unit for “Coal and steel” in DG Research and Innovation, discussed the role of coal in providing affordable and clean energy. All agreed that coal would continue to be an important source of energy around the world during the energy transition.

click to download presentation

In his presentation, President Rogala pointed out that not all EU member states could afford the higher costs of the energy transition, especially those with access to affordable coal. Here, he stressed the need to continue working on clean coal technologies, as coal will continue to be needed in the European energy mix for some decades to come.

Mr. Rogala called for more time for the transition to avoid a situation where we have closed the indigenous coal mining industry, transferred jobs outside of the European Union, but still retained the negative impacts on the climate with our use of imported coal.

The EURACOAL President noted that to meet demand in 2017, the EU had imported 173 million tonnes of coal. In terms of lost jobs in coal mining, this is equivalent to around 700 thousand work places – workers who could earn €13 billion each year, he estimated. The imports meant a cash transfer of €13 billion outside of the EU and the elimination of 700 thousand jobs from the labour market, he reiterated.

Some years ago, he recalled, EURACOAL had warned that a too-fast transition would simply transfer well-paid jobs outside of EU and this is what has happened.

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MEP Jerzy Buzek with EURACOAL President, Mr. Tomasz Rogala, in the European Parliament, 9 July 2018

In his speech, President Rogala underlined, that electricity prices are higher in countries with the biggest shares of new renewables, countries like Germany or Denmark where rates are over 0.30 €/kWh.  Prices are lower in countries with smaller share of renewables: 0.10 €/kWh in Bulgaria and 0.15 €/kWh in Czech Republic. He added that Eurostat data shows that 9% of EU citizens live in energy poverty – they cannot afford to pay their electricity bills.

According to President Rogala, EU climate action is definitely too fast. Coal companies should, he suggested, be granted support for diversification during the transition. He warned, however, that change must be in line with the global situation, so as not to lose our economic competitiveness.

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Mr. Michał Drabik, UNECE Economic Affairs Officer speaking at the European Parliament, Brussels, 9 July 2018

Mr. Drabik from the UNECE in Geneva noted that fossil fuels will remain a major component of the future global energy mix, even under the most optimistic 2°C scenario for GHG emission reductions. He stressed that all seventeen Sustainable Development Goals (SDGs) are equal, meaning that SDG 7 on affordable and clean energy or SDG 13 on climate action are neither more nor less important than, for example, those on poverty (SDG 1) or hunger (SDG 2). They should all be considered together in an integrated approach, he said. At the same time, Mr. Drabik pointed to the fact that all SDGs depend on energy, as none of them can be attained without reliable access to it.

click to download presentation

He recalled that energy efficiency gains are the key to reducing emissions, a point also made by MEP Jaromír Kohlíček, Vice Chair of the Committee on Industry, Research and Energy in the European Parliament. The problem of methane emissions from coal mining and natural gas sectors need to be addressed at each stage of the value chain, Mr. Drabik added. Furthermore, he underlined that efforts for emission reduction in the coal sector should not be focused only on the extraction and energy production phase, but on the whole coal life cycle, including mine planning, as well as a period after cessation of extracting activities. The UNECE is the unique UN institution that talks openly and frankly about the role of fossil fuels in the energy mix, preferring to leave aside emotions and lead a discussion based on facts. UNECE’s focus and imperative is on improving the environmental performance of the energy system, in particular fossil fuels. Mr. Drabik presented several UNECE projects and highlighted its International Centres of Excellence in China and Poland, inviting participants to support the UNECE’s work in these fields.

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Mr. Haitze Siemers, Head of Unit for “New energy technologies, innovation and clean coal” in DG Energy speaking at the European Parliament, Brussels, 9 July 2018

Mr. Siemers from DG Energy underlined the role of innovation and competitiveness in energy-sector development. Using examples from China, with its long, ultra-HV transmission lines, and from Japan, with its plan to develop a hydrogen economy by 2035, he highlighted energy innovation at the international level. He praised Europe’s leading role in securing the Paris Agreement and wanted to see this success repeated with innovative R&D projects in the EU during the energy transition, noting the many interesting possibilities with carbon capture and use to create not only carbon-free power generation, but also to build a circular economy.

Mr. Martin, responsible for the Research Fund for Coal and Steel (RFCS) in DG Research and Innovation, highlighted a new RFCS Accompanying Measures project on a strategic research agenda for clean coal technologies, as well as the European Commission’s Coal Regions in Transition Platform with its working group on “Eco-Innovation and Advanced Coal Technologies” taking place on 12/13 July. He concluded that Europe’s future competitiveness requires an industrial base with many products, such as wind turbines which themselves require steel and therefore coal, but cleaner coal in the future.

The event was attended by around fifty guests, including Members of the European Parliament, officials from the United Nations and the European Commission, EURACOAL members and representatives of energy companies and trade associations. European Energy Forum debates are held under the Chatham House rule.

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Dinner debate hosted by the European Energy Forum and EURACOAL in the European Parliament, 9 July 2018

EURACOAL supports re-industrialisation of Europe

Coal lies at the heart of European manufacturing, providing a stable, secure and competitive fuel for power generation.

But European manufacturing is in decline. Between 2000 and 2014, the share of manufacturing in total EU output fell from 18.8% to 15.3%, while 3.5 million jobs were lost.

For many years, the coal industry has argued that European manufacturers needs competitive electricity prices (e.g. A Strategy for Clean Coal in 2012).

The time has come to sound the alarm.  EURACOAL, together with another 124 associations, has signed a Joint Declaration for an ambitious EU industrial strategy with the aim of growing industry’s share in European Union GDP to 20% by 2020.

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Two major new coal reports launched in Brussels

EURACOAL President, Dr. Wolfgang Cieslik, today launched the 6th edition of Coal Industry across Europe in the presence of Mr. Keisuke Sadamori, Director of Energy Markets and Security at the International Energy Agency.

Coal Industry across Europe is a comprehensive review, analysing all EU member states that use coal and lignite as well as participants in the Energy Community.  With chapters on socio-economic issues and coal trade developments, this new edition also features a series of special insights covering recent coal-sector investments and cutting-edge R&D that has enhanced productivity at coal mines, improved efficiency at coal-fired power plants and limited the negative environmental impacts of coal use.

After the launch, IEA Director Sadamori presented the Agency’s Medium-Term Coal Market Report 2016.  He said that coal demand will plateau over the next five years:  while demand stalls in China, falling demand in the US and the EU will be balanced by rising consumption in India and South East Asia.  Mr. Sadamori explained that the surge in coal prices during 2016 was mainly due to policy action in China to cut coal production capacity and so curb oversupply.

The new EURACOAL publication is freely available here, while the IEA coal market report can be purchased from the IEA bookshop.

Presentations from the event are available here.

Saint Barbara’s Day

On this St. Barbara’s Day, the EURACOAL Secretariat wishes all miners good fortitude. We remember colleagues who will miss the traditional celebrations, including in copper mining. Let the lights shine bright thanks to the heroic work of miners everywhere.

Photo by Wusel007Own work, CC BY-SA 3.0.

Coal industry leaders meet in Lisbon

EURACOAL President, Dr Wolfgang Cieslik of STEAG, gave a keynote address at the 36th Coaltrans World Coal Conference in Lisbon on Monday, 17 October 2016.

The conference brought together over 300 coal industry leaders from around the world, including producers, consumers, traders and government officials.

In his presentation, which was followed by an on-stage interview, Dr Cieslik observed that current regulations have killed the European electricity market. He called for policy stability to re-establish trust in the market.

Dr Cieslik expressed confidence in coal, noting that it will remain his company’s main business over the coming years. Without conventional thermal power generation, it would be impossible to ensure reliable power supply in Germany and elsewhere, he concluded.

12th Coal Dialogue report published

Chaired by Klaus-Dieter Borchardt, Director – Internal Energy Market at DG Energy, and EURACOAL Vice President, Vladimír Budinský, the 12th EC-EURACOAL Coal Dialogue examined the future role of coal after the recent round of climate negotiations in Paris.  Speakers included MEP Claude Turmes (Greens/EFA, LU) and Mr. Dumitru Fornea, a member of the European Economic and Social Committee (EESC).

Coal represents one quarter of EU electricity demand, mostly from indigenous coal, and supports 300 000 direct jobs.  While MEP Turmes argued that there was no room for coal in the future EU energy mix, all agreed that the EU needs a response to the difficult question of coal in the “energy transition”.

To read the full report and presentation please follow this link.

The World Coal Leaders Network gathers in Portugal

The well-known Coaltrans event gathers over 500 industry innovators and thought leaders for three days of constructive discussion, bringing key macro trends and pricing overviews, lots of one-to-one meetings and deal making, technical content, provocative interactive debates and workshops, and keynote industry interviews.

Some of the topics for this year are:

  • Oil, gas, carbon, coal: a perfect storm of risks for coal, but how much demand is at risk?
  • Snapshot price forecasts: five-year forecasts for coal prices, oil prices and LNG prices
  • Are thermal coal prices becoming more dependent on currency movements than on demand and supply?
  • How much can the Middle East and Turkey support Atlantic coal trade?

With speakers from International Energy Agency, Noble Resources, Uniper, RWE Supply & Trading and many others. EURACOAL members will get a 10% discount off the registration fee for the event.

Please see more details at the following link: http://www.coaltrans.com/world-coal-conference/details.html.

EURACOAL position paper on EU ETS reform

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Click to download EURACOAL’s position paper on the Commission’s proposal of July 2015 on EU ETS reform

In light of the EU European Trading System reform, the European Association for Coal and Lignite, EURACOAL, welcomes the Commission proposal of July 2015.

EURACOAL firmly believes in a market-based approach to reduce greenhouse gas emissions, such as the EU ETS. The single European cap ensures that climate policy targets are achieved. The price follows from the target and reflects the cost of CO2 reduction. If the price of allowances is low, then this means that the CO2 reduction target has been achieved at a low cost – a good outcome. Calls for a particular “carbon price” would undermine the ETS as a market-driven trading system.

EURACOAL presents in its position paper several points where we consider that improvements could be made, namely the Modernisation and Innovation Funds, the Market Stability Reserve, international credits, the free allocations for projects in eligible Member States and for district heating / CHP, the distribution between auctioning and free allowances, allowance fungibility and the New Entrants Reserve.

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Click to download infographic

EURACOAL President Cieslik addresses President Tusk and heads of state

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click to download letter to President Tusk (translations below)

The COP21 Paris Agreement has legally binding obligations on stocktaking and transparency, but not on emission targets: only the “well below 2°C” limit on global temperature rise. Even with all the major COP21 pledges (INDCs), and regardless of the EU’s own ambitious targets, global greenhouse gas (GHG) emissions will increase by 2030.

The EU’s proposed target for 2030, if reached, would see the Union’s GHG emissions fall to just 6% of the global total. And yet, global emissions still rise: the planet is not saved. The proposed EU ETS reductions would mean that emissions from the sectors covered must drop to zero by 2058. The stark reality of this proposal is that Europe would be devoid of all energy-intensive industries and perhaps have little left in the way of manufacturing industry. Jobs and emissions would be outsourced to every other region of the world.

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click to download EURACOAL white paper

A less ambitious climate target, achieved by making efficiency improvements across the whole economy and including transport into the EU ETS, could put Europe on a better path. EURACOAL calls on President Tusk and all 28 EU leaders to reject the 40% target and to adopt a less ambitious, more realistic target that can deliver more for Europe, as described in our white paper, “Why less climate ambition would deliver more for the EU“.

The letter from EURACOAL President Cieslik is available in all the working languages of the EU: Bulgarian; Croatian; Czech; Danish; Dutch; English; Estonian; Finnish; French; German; Greek; Hungarian; Italian; Latvian; Lithuanian; Polish; Portuguese; Romanian; Slovak; Slovenian; Spanish; Swedish.

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click to download example voting result with Spain against

EURACOAL’s analysis of the possible vote in the Council shows that, for example, either Greece AND Romania, OR Spain, OR the UK must vote against, assuming that the Visegrád Group is united in its opposition to the 40% target. Note also that a Member State must ask for the old qualified majority vote (QMV) rule to be used, otherwise more Member States would have to vote against.

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EURACOAL analysis of Council vote on the EU’s 40% emission reduction target for 2030

New President of EURACOAL: Dr. Wolfgang Cieslik unanimously elected

The Executive Committee of EURACOAL elected Dr. Wolfgang Cieslik, member of the Board of Management of STEAG GmbH, as President of the European coal industry association.

Dr. Cieslik, who is also Chairman of the Coal Importers’ Association (VDKi), takes on the presidency from Dr. Zygmunt Łukaszczyk, Chairman of the Board of Katowicki Holding Węglowy S.A., one of the three largest Polish coal mining companies.

Mr. Vladimír Budinský, representing the Czech Association of Employers in Mining Industry (ZSDNP) and Mr. Nigel Yaxley, representing the Association of UK Coal Importers and Producers (CoalImP), were both re-elected as Vice Presidents and are joined by newly elected Mr. Janusz Olszowski of the Polish Mining Chamber of Industry and Commerce (GIPH).

Please read the full press release at the following link.

On COP21, “slave-traders” and press independence

Brussels, Sat 19/12/2015 17:18 (corrected Thu 28/01/2016 21:55 to clarify partnership between 350.org and Guardian)

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Click to download EURACOAL report on how a more realistic EU climate policy can deliver considerable emission reductions at a lower cost, allow economic growth and provide security of energy supply.

After reading all 1,001 comments made by Guardian readers in response to “Coal lobby boss says industry ‘will be hated like slave-traders’ after COP21” (Arthur Neslen, UK Guardian, 15 December 2015), I have selected the best and republish them below. They offer a rich source of ideas and views on coal, both for and against: clever ones, insightful ones and funny ones. They will influence EURACOAL. The sweetest one sits at the very end, from OrganicPeaBrain. Vitriolic comments were thankfully few in number. I’m sure that many respectable people stand behind their shields of online anonymity, but they should remember that those shields are really only paper thin to the eyes of GCHQ.

We have published the EURACOAL members’ briefing that Arthur Neslen quotes, so that his juicy bits can be seen in their proper context. While we do question the future potential of renewables, EURACOAL has no view on climate science. However, it is fair to say that many in the coal industry are climate sceptics. Skilled miners, well-educated mining engineers and professional geologists have a unique perception; they work with materials that were laid down hundreds of millions of years ago and have a better appreciation than most people of the great planetary changes that have taken place over time. Convincing them is the test of climate scientists.

On climate action, I would go for economic options; as OscarAwesome states below, “The morality follows the economics.” So, we need cheap alternatives to coal. If we have to rely on public support for renewables, then there will be no “energy transition”, just lost jobs. It is easy to destroy things, very easy. Building stable societies is much harder. EURACOAL will continue to say what we think and I sincerely hope that others around the world will be free to do the same.

To that end, an independent media with keen investigative journalists is hugely important in any democratic society. So, it was good to see the Guardian publish the story that needed to be published on how the UN pushed through the Paris Agreement in a way that lacked democratic legitimacy: John Vidal’s article explains this far better than I did in my members’ briefing.

Like all newspapers, the Guardian has had to find a new business model in a world where we expect online content to be free.  The Guardian’s “keep it in the ground” campaign is run in partnership with a US-based organisation called 350.org, founded by Bill McKibben. It’s hard to judge his editorial influence, beyond his insightful and often inciting opinion pieces, e.g. on 13 December when he wrote in the Guardian of a “pack of wolves” at Exxon’s heels and called for illegal action at the “world’s carbon bombs”. Dangerous words, but permissible in the UK’s free press.

The coal industry is portrayed as a bunch of rent-seeking capitalists and, yes, I laughed at the “Australian Coal Mining Company” video on YouTube. In Europe, most coal mining is carried out by state-owned companies, companies such as Kompania Węglowa in Poland. I was there recently to celebrate St. Barbara’s Day, the patron saint of miners (Wizzair €8 flight from Charleroi, no carbon offset). I drank too much vodka with miners who work harder than I ever have to produce the coal that powers the Polish economy. They are good, decent men and women. Like me, they are wage slaves, not capitalists.

Brian Ricketts, Secretary General

Selected comments in response to “Coal lobby boss says industry ‘will be hated like slave-traders’ after COP21” by Arthur Neslen (UK Guardian, 15 December 2015)

red = pro coal
green = anti coal (obviously)
bold = interesting

Continue reading On COP21, “slave-traders” and press independence

EU 2030 targets: why COP21 means less can be more…

Please see at this link our brochure arguing for a more realistic EU climate policy that can deliver a better environment, growth and jobs. Our COP21 report to EURACOAL members has been quoted by some media organisations. It was a mistake to share it. For those interested, the report is available here.

It is not easy to explain why “less can be more”. However, in the case of EU climate and energy policy, the truth is that a less ambitious policy – some might say a more realistic policy – would deliver greenhouse gas (GHG) emission reductions at a much lower cost than a policy which favours targets that are unaffordable and therefore unrealistic.

It has now become obvious that the fast expansion of solar PV in Germany from 2009 to 2013 gave the illusion of a prosperous solar industry, an illusion that has since faded. The party is over and now there is a hangover: many companies have gone bankrupt and jobs have been lost. The solar boom leaves a debt to be paid by German consumers over the next 20 years of €100 to €200 billion. Given that the prices for PV installations have fallen in recent years, it seems that less ambition would have delivered more. Technologies and the timing of their introduction are key questions. Economics is perhaps the single most important driver in today’s world. People generally want as much as possible for their money (“more for less”) and the control of GHG emissions should not be seen as being any different.

This paper explores why a more progressive policy on power plant modernisation and renewal could deliver emission reductions at a lower cost to society, demonstrate global leadership and, crucially, avoid the risk of an over-dependence on imported natural gas which appears to be the default option for future power generation in many Member States without providing a reliable solution.