The World Coal Association’s mission impossible at the Paris climate talks

Bob Burton

As lobbyists from the World Coal Association (WCA) – the coal industry’s global lobby group – haunt the Paris climate talks they face an impossible challenge of persuading governments they have a coherent strategy for addressing global warming.

For much of the last twenty years the global coal industry has touted Carbon Capture and Storage (CCS) as the silver bullet fix for the massive quantities of greenhouse gas emissions emitted by coal power plants. The WCA celebrated loudly when the US$1 billion Boundary Dam CCS plant in Canada was commissioned last year but was silent when recently leaked internal documents have revealed the plant to be hopelessly unreliable.

The only other major coal power station that is deploying CCS is the Kemper plant in the US which has cost triple its original estimate and, at US$6.4 billion and rising by the month, may yet bankrupt its sponsor. The WCA are even less likely to want to talk about that one.

So while the WCA proclaims it wants to “strengthen our influence by engaging global thought leaders and policy makers in rational, data driven debate to position the coal industry as responsible and progressive”, promoting CCS will fail the laugh test in Paris. Even the WCA are much more muted in their enthusiasm for CCS these days.

As the commercial viability of CCS has evaporated in the last couple of years, the WCA has changed tack.

Now it promotes ‘high efficiency’ coal plants as its latest magic fix for coal’s pollution woes.

According to the WCA, high efficiency coal plants reduce greenhouse gas emissions as they burn coal more efficiently. While the definition is vague, the WCA usually refers to supercritical and ultra-supercritical coal plants, with the former being a mature technology and the latter being a relative newcomer.  The WCA recently released a report talking up the potential for such technologies to reduce greenhouse gas emissions in India and globally.

However, tweaking the amount of greenhouse gas pollution per kilowatt hour by a handful or so of percentage points would be an insignificant contribution to limiting the global temperature increase to 2 ̊C. Climate Action Tracker estimates even if none of the 2440 proposed coal plants are built, power sector emissions will exceed the 2 ̊C pathway by 150 per cent.

What is required is the rapid phase-out of existing plants, not the construction of more  however ‘efficient’ they are. Just as CCS plants proved too prohibitively expensive to attract much interest from utilities, ‘ultra-supercritical’ also come with a heavy price-tag. Even the WCA acknowledges they can cost up to 40 per cent more than conventional coal plants, making them far less viable than renewables.

With a rapid rollout of solar and wind and ramping up of energy efficiency – complemented by the rapid retirement of old coal and gas power stations and a shift away from fossil fuels – it may just be possible to keep the temperature increase to 2 ̊C.

Membership woes

Just as the WCA’s job is to paint a happy future for coal in a carbon-constrained world, it also has to give the impression that all is well with its own organisation.

In the last year the WCA has lost the US company Alpha Natural Resources, which is bankrupt, and Arch Coal, which could perhaps most charitably be described as cash-strapped. The WCA also lost GE Mining, Adaro Indonesia and the Polish coal miner Katowicki Holding Weglowy. The year before the bankrupt New Zealand government-owned Solid Energy bailed out, as did US gas and coal producer Consol Energy and French oil and gas company Total. (Total has subsequently signalled its intention to exit the coal industry.)

Others might follow soon: while the Managing Director of Rio Tinto Coal Australia, Chris Salisbury, is on the WCA’s Executive Committee, his days may be limited as analysts tip that Rio Tinto is already well down the path to exiting the coal business altogether.

The chronic churn of the member companies and their senior executives has taken its toll on the coal lobby group too. In the year to the end of September 2014, 19 of the WCA’s 40 directors – representing both the member companies and 19 affiliated national coal industry lobby groups – resigned. (Of the 40 directors that year, there was only one woman.)

Since the start of 2010, the WCA has gone through six different Chairman and is now onto its seventh. (I use the word Chairman deliberately.)

The WCA’s remaining 18 member companies at best account for just one-fifth of global coal production and a little under a third of coal exports.

The WCA’s membership roll is dominated by a handful of major companies: Peabody, Glencore, Anglo American, Rio Tinto, mid-level US producer Bowie Resource Partners, the struggling Australian company Whitehaven Coal, a couple of Russian companies, the Chinese coal companies Shenhua and the China National Coal Group.

There’s also a smattering of mining suppliers in the lobby group’s ranks too: heavy machinery supplier Caterpillar Global Mining, the explosives maker Orica, the Australian coal transport company Aurizon and Joy Global, the US manufacturer of underground coal mining and transport systems.

While the WCA has taken to talking up India’s need for coal, it has no members that mine coal there.

Coal India – which accounts for 80 per cent of the country’s coal production – was a member back in 2010, but   parted ways with the WCA. What caused the split is unclear but it appears it wasn’t entirely amicable, with the WCA’s 2011 financial statements recording (p.3) a £40,000 (US$60,000) bad debt against the company for unpaid dues.

All round the last few years haven’t been kind to the WCA and its pro-coal agenda.

With little to offer on how the global community can meet the 2 ̊C temperature increase target and a declining membership, the Paris climate conference may well be the WCA’s swansong.

Bob Burton is the Hobart-based Editor of CoalWire, a weekly bulletin on global coal industry developments. (You can sign up for it here.) Bob Burton’s Twitter feed is here.