While 2015 kicked off the fingerprints of climate change all over extreme heat, fires and floods around Australia, State and Federal Governments have rung in the new year by deepening their reliance on coal and their intimate relationships with destructive fossil fuel companies. After calling a snap election, Queensland Premier Campbell Newman hit the campaign trail with the Australian CEO of Indian conglomerate Adani at his side, talking up the jobs the company’s $16.5 billion Carmichael coal mine could potentially create after the QLD government kicks in an unspecified sum (estimated to be almost half a billion dollars) for the project’s rail infrastructure. Legal challenges continue to dog Adani, with the Environmental Defenders Office this week asking the federal courts to overturn Environment Minister Greg Hunt’s approval of the mine based on the emissions the coal will produce when burned, while competitors have complained Adani has been granted unfair advantage given the State is currently the only investor in the project. Banks like HSBC and Deutsche Bank are refusing to touch Great Barrier Reef-threatening projects, not least because of coal’s bleak economic prospects. A new report from the Institute of Energy Economics and Financial Analysis (IEEFA) has highlighted the coal market gloom, warning that rapid take up of renewable energy and weakening electricity demand has created a structural decline in seaborne thermal coal. 2014 saw China’s coal consumption drop for the first time, with its imports for the full year dropping 10.9 per cent. More provinces have since been ordered to cut coal use. No doubt seeing the writing on the wall, Australia is pushing free trade with India so it can lock in more coal and gas sales. Trade Minister Andrew Robb is in the country this week giving reassurances that there is a “clear pathway to finance” for Adani’s “100-year” Carmichael coal project but, even if finance does appear, Adani still faces many hurdles. According to IEEFA, India cannot afford to continue importing coal, Australian coal could double energy costs for Indian consumers, and India’s finance minister is considering ending thermal coal imports entirely within 2-3 years. The economic risks for coal are clearly huge, but given we know 95 per cent of Australian coal needs to stay in the ground to avert dangerous climate change, such risks are dwarfed by social, environmental, and climate risks.
- RT @endtheageofcoal: Federal court asked to overturn Adani mine approval due to impact on Great Barrier http://t.co/8G9uBwG9eP #savethereef
- With climate action increasing, renewables booming, and electricity use weakening, coal’s days are numbered. China’s coal consumption is dropping for the first time; US coal consumption has registered the largest absolute drop of any country, ever in history, and will continue as coal power plant retirements are announced. Europe’s coal consumption has been dropping for 30 months, and will continue as large amounts of dirty old coal capacity is retired by the end of the decade. India, like China, may be pursuing an “all of the above” strategy as it develops but, like China, it is also increasingly turning inwards for its coal and is aggressively pursuing renewables. Even coal gian Adani is jumping on the renewables train, joining with SunEdison for a new US$4 billion venture to build solar panels in India.
- Contrary to Prime Minister Abbott’s claims, there are “few things more damaging to our future” than digging up and burning Australian coal. The social cost of burning fossil fuel is six-times higher than previously thought, and keeping average global temperatures below a rise of 2DegC means keeping 88 percent of the world’s known coal reserves, 52 per cent of gas and 35 per cent of oil in the ground. This includes 95 per cent of Australia’s known coal reserves. Huge new coal projects by Adani, GVK and others in the Galilee basin simply cannot go ahead if the Great Barrier Reef is to survive.
- As the impacts of climate change begin to be felt, people are increasingly refusing to buy into government and industry spin about fossil fuels being a great benefit to the economy, to jobs, and poverty alleviation in developing countries. The coal industry and its supporters in Government are afraid of the moral backlash as global warming accelerates and have adopted a fake moral cause: pretending the world’s poor might be helped by coal, and faking support for its public relations push. In reality, renewables, not coal, provide the fastest, most effective, and most affordable way to lift the rural poor in developing nations out of abject poverty. Burning more pollutants like coal will only worsen the health, extreme weather, sea level rise, and economic impacts on the rural poor.
Working with the Environmental Defenders offices in NSW and QLD, the Mackay Conservation Group has launched a legal challenge with the federal court to overturn Federal Environment Minister Greg Hunt’s approval of indian coal conglomerate Adani’s vast Carmichael mine in the Galilee basin.
The case argues that as greenhouse gas emissions threaten the Great Barrier Reef, and the coal from the mine will emit a huge 130m tonnes of carbon dioxide every year – one quarter of Australia’s total annual emissions – the Minister should have considered the impact of burning the coal from the mine during the approval process.
If successful, the challenge could set a landmark precedent, as it would force dirty projects such as Adani’s Carmichael mine to to be evaluated on their total lifecycle emissions, not just what they will produce domestically.
The challenge is not the first one for the project, or even the only current trouble facing it. The Queensland government is also under attack for its “terrible concept” of diverting 700,000 megalitres of water from QLD rivers to Carmichael and other nearby mines in order to allay concerns of groundwater depletion. For perspective: an Olympic-sized swimming pool holds about 2.5 megalitres.
It is also facing criticism from competitors, with mining billionaire Gina Rinehart and partner GVK complaining Adani has been granted unfair advantage given the State is reportedly sinking almost half a billion dollars into the project in the form of rail infrastructure, and is doing so as its only investor to date. Banks like HSBC and Deutsche Bank are refusing to touch the Great Barrier Reef-threatening Abbot Point coal terminal expansion, not least because of coal’s bleak economic prospects.
Citibank sees structural decline in the global thermal coal market, and independent analyses show that Australian projects such as those in Queensland’s Galilee basin are commercially unviable. The IMF and World Bank are calling on finance ministers to remove fossil fuel subsidies and use policies such as carbon taxes to reallocate resources and combat climate change; China, India and the US are moving away from coal; and continued oversupply and rapidly slowing demand growth thanks to renewable expansion will only exacerbate coal’s already bleak future.
According to a new report from the Institute of Energy Economics and Financial Analysis (IEEFA), rapid take up of renewable energy and weakening electricity demand has created a structural decline in seaborne thermal coal. IEEFA says India cannot afford to continue importing coal, as Australian coal could double energy costs for its consumers. It notes that India’s finance minister is even considering ending thermal coal imports entirely within 2-3 years.
The question is: why would State and Federal Government be so keen to ram through the expansion of an industry that is being eaten alive by booming renewable development?
China is moving to triple its installed capacity for solar, and the office of India’s new Prime Minister Narendra Modi declared that by 2019 every home should run at least one light bulb powered by solar energy.
India is already the world’s fifth largest producer of wind energy, such an expansion of wind generation, coupled with new Prime Minister Narendra Modi’s desire to speed solar development and tax coal, will be another nail in the coffin for the coal industry.
Even Adani has recognised the opportunities in renewable developing, this week partnering with SunEdison to build a US$4 billion solar panel factory.
So why has Queensland Premier Campbell Newman been joined by the Australian CEO of Adani to spruik coal jobs during the election campaign? Why is Trade Minister Andrew Robb insisting that there is a “clear pathway to finance” for Adani’s “100-year” Carmichael coal project? Why is Prime Minister Tony Abbott adamant that “few things more damaging to our future” than leaving coal in the ground despite the economic, social, environmental, and climate risks?
The writing is on the wall, and the window for coal as a dominant, growing energy source is closing. Australia is pushing free trade with India so it can lock in more coal and gas sales when we know 95 per cent of Australian coal needs to stay in the ground to avert dangerous climate change. Australia is mining the age of entitlement.
- Federal court asked to overturn Adani mine approval due to impact on Great Barrier Reef (The Guardian)
- Plan to divert water from Queensland rivers for coalmines a ‘terrible concept’ (The Guardian)
- Abbot Point: onshore dump would favour Adani, say coal miners (The Guardian)
- Queensland Labor vows to roll back taxpayer support for Carmichael mine (The Guardian)
- Social cost of carbon six times higher than thought – study (RTCC)
- Woodside partners with India’s Adani (SBS)
- SunEdison, Adani to Build Solar-Panel Factory in India (Wall Street Journal)
- Approvals for Adani’s Carmichael project through; GVK’s delayed: Andrew Robb (LiveMint)
- China orders more regions to cut coal consumption (Reuters)
- China’s Dec coal imports jump but 2014 sees first drop in a decade (Business Recorder)
Tools and resources
- Report: Global Energy Markets in Transition (IEEFA)
- PR: Global Energy Market Transition Is Driving Thermal Coal Into Structural Decline (IEEFA)
- Report: All talk, no action: the coal industry and energy poverty (The Australia Institute)
- Report: The mouse that roars: Coal in the Queensland economy (The Australia Institute)
- Report: Coal Kills: Health Impacts of Air Pollution from India’s Coal Power Expansion (Endcoal.org)
- Fact sheet: Clean Energy Advantage (Endcoal.org)
- Report: The end of China’s coal boom (Greenpeace)
- Great Barrier Reef (NASA), Coal trains (Crispin Semmens), Galilee basin infographic (Beyondcoalandgas), China’s coal control measures (Greenpeace)
- “By approving Adani’s Carmichael proposal, the Australian Government is in major breach of its own environmental regulations. It is unacceptable at this time that any responsible government should willfully ignore the climate implications of what could be one of the most polluting mines in the world. Queenslanders are being held hostage to the government’s desire to burnish its own image of ‘getting things done. Sabotaging farmland, water supplies and the Great Barrier Reef for the exaggerated short-term benefits of this mine – most of which would flow offshore – defies good policy and common sense.” Co-ordinator at Mackay Conservation Group, Ellen Roberts.
- “Globally, 2014 was the year of the renewable energy installation juggernaut. With the notable exception of Australia, where policy uncertainty served as an effective hand-brake, wherever you look around the globe, be it China, India, Europe or the U.S., the trend of a rapidly-expanding renewable energy industry is the same. 2015 will inevitably see this gather pace.” IEEFA director of energy finance studies, Australasia, Tim Buckley.
- “It’s companies and countries that hold large coal reserves that are going to suffer under a 2 degree scenario, and also the Arctic oil.” University College London’s Christophe McGlade.
- “We are the first generation to feel the impact of climate change and the last generation that can do something about it.” US President Barack Obama.
Related Tree Alerts
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- New China coal import rules likely to hit Australian exports hard
- Bleak future for coal as India embraces renewables
- Environmental and economic risks ignored in new coal mine approval
- Australian PM supports misleading coal industry PR offensive
- Coal industry paints itself as a hero on poverty, ignores climate and health impacts
- RT @GreenpeaceAustP: QLD ALP vows to roll back taxpayer support 4 Carmichael mine http://t.co/MQwe8D3PjT #savethereef http://t.co/yhuCDZ3coH
- RT @EDO_Qld: @EDO_Qld serves Adani with court docs commencing @MackayConsGroup challenge to Carmichael Mine http://t.co/pFVb4uttUs
- RT @jameslorenz7: Dodgy Carmichael mega mine faces another court case http://t.co/OfLQtSdKZR #fightforthereef #savethereef