May 10, 2018
Issue 228  |  View Past Issues

Editor's Note

The economic factors undermining both new and existing coal plants continue to accelerate. In the last week Allianz, a global insurance company headquartered in Germany, signalled a dramatic shift away from its previous support for coal power. In Japan, Dai-ichi Life Insurance announced it would no longer fund new coal plants overseas with Nippon Life Insurance, indicating it is also reviewing its policy. In Belgium, a protest at the annual general meeting of KBC Bank spurred the bank to announce it would no longer fund new coal plants or mines from June. In Spain, the utility Endesa has signalled a range of economic factors running against coal power may force it to close all its coal plants.

However, big challenges remain. In Russia, increased coal production is causing profound problems for indigenous people in the Kuzbass region and for residents of the coal export ports in the Far East. There remains a lawless element in the coal industry too. In Pakistan, a coal import terminal has been operating for a year without an environmental permit. Meanwhile, in Indonesia a mining company diverted a river without permission from regulators or the community living downstream. In other places laws are weak or being subverted. In Australia, a review of operating coal plants found huge variations in the pollution standards permitted. In the US, the Trump Administration has signalled plans to weaken the role of science in setting new environmental regulations, such as those affecting power plants.

Bob Burton


Japanese insurance companies begin restricting coal finance

The announcement by Dai-ichi Life Insurance that it will no longer finance new overseas coal plants and indications that Nippon Life Insurance is considering a similar policy suggest that Japanese insurance companies are finally starting to move away from supporting new coal plants, writes Han Chen from the Natural Resources Defence Council.

Another problem with China’s coal: mercury in rice

A recent study found that some people in China, the world’s largest mercury emitter, are exposed to more methylmercury from rice than they are from fish. The study has implications across Asia where rice is a staple food and a major expansion of coal power is proposed, write Noelle Eckley Selin and Sae Yun Kwon in The Conversation.

Russian residents pay a heavy price for coal shipments to Asia

Residents of the city of Slavyanka in Russia’s Far East are fearful of being subjected to pollution as has occurred at Nakhodka port and have taken to the streets to protest against a proposed coal terminal, writes Giovanni Pigni in Asia Times.

Europe’s coal dependency is devastating Russia’s forests and indigenous Shor people

The expansion of coal production in Russia’s Kuzbass region is having a devastating effect on the indigenous Shor people and their forests and mountains, writes Daria Andreeva from FERN.


Protest spurs Belgian bank to end coal investment

Hours after environmental activists had occupied the foyer of the Brussels office of KBC Bank, a major Belgian bank, the company announced it will not allow new financing of coal-fired power plants or coal mines from June 2018. KBC Bank has, through its Czech subsidiary CSOB, financed the expansion of coal mines and power plants in the Czech Republic. KBC Bank’s new policy will affect mines seeking to expand but exempts existing coal-fired plants widely used in the Czech Republic for central heating. (The Ecologist)

Japanese insurance company exits new international project financing

Dai-ichi Life Insurance, the second largest Japanese insurance company, has announced it will cease financing new overseas coal plants. However, the new policy allows continued financing of new domestic coal plants. This decision is the first case of coal divestment among Japanese financial institutions. Nippon Life Insurance, the largest Japanese insurance company, has also announced that they are considering a similar divestment policy as well. (Asahi Shimbun [Google Translate], Nikkei [Google Translate])

Allianz sets 2040 end date for insuring coal

The German insurance company Allianz will immediately cease insuring single coal-fired power plants and coal mines or, with limited exceptions, renew policies for such projects. Allianz will also ban companies proposing to build over 500 megawatt (MW) of new coal plant capacity from its investment portfolio. However, Allianz, the world’s biggest insurance company by assets, will continue to provide company-wide insurance for coal mining and coal power utilities until 2040. Allianz ended direct investment in coal companies in 2015. (Allianz, Unfriend Coal)

Top News

China pursues air pollution crackdown: The mayors of three cities in Hebei and Shanxi provinces have been ordered by the Ministry of Ecology and Environment to meet air pollution reduction targets and stop approving polluting new projects. The mayor of the Handan city in Hebei promised to cut 1.1 million tonnes of coal consumption including 268 MW of coal power capacity and 300,000 tonnes of steel production by August. The three cities have been given 20 days to submit plans to comply with pollution reduction goals to the ministry which has been given greater powers to enforce environmental standards. (Reuters)

Pakistan coal port proceeds without approval: The Sindh Environmental Protection Agency has denounced Port Qasim Authority (PQA) and its joint venture partner Huaneng Fuyun Port and Shipping for their “utter disregard for the provisions of Sindh Environmental Protection Act 2014.” For over a year the PQA has been operating a coal transhipping operation without any environmental authorisation. Coal dust pollution from the operation has alarmed workers and other companies operating in the port precinct. The coal is railed to the 1320 MW Sahiwal coal plant. (Dawn)

Indonesian coal company diverts river without permit: A company executive with PT Seluma Prima Coal, which has been operating a coal mine in Sumatra since 2015, has admitted that even though the company has never gained a permit allowing the diversion of the Sungumai River it proceeded with the works anyway. Residents of the nearby village complain the mine has diverted most of the water from the stream bed they used for water supply and what little is left is polluted. Residents and former mine workers have staged several protests this year against the impact of the mine and the lack of compensation. The mine produces low-sulphur coal for both the local market and export. (Mongabay)

NSW coal plant audit finds lax pollution standards: An investigation by the New South Wales Environment Protection Agency (EPA) has found the state’s five coal plants are allowed “unnecessary variation” in pollution compliance standards. The review noted that Delta Electricity's 1320 MW Vales Point power station has fine particle pollution limits twice as high as Origin Energy's nearby 2880 MW Eraring plant and mercury levels five times greater. Energy Australia's Mount Piper power station has no cap for sulphur dioxide emissions and the nearby town of Lithgow has no air monitoring station. Environmental Justice Australia has called for enforcement of stricter pollution controls. However, the EPA has not committed to a timetable for introducing new standards. (Sydney Morning Herald, Environment Protection Agency)

Ex-Murray Energy lobbyist celebrates move to curb EPA’s use of scientific studies: A rule proposed by US Environmental Protection Agency Administrator, Scott Pruitt, would block any new regulations being enacted unless the data in underpinning scientific studies is publicly available. The proposed rule was originally popularised by former Murray Energy lobbyist Steve Milloy who said Pruitt’s proposed rule “covers pretty much everything I've been trying to do for the last 25 years.” Environmentalists argue the rule would be used to exclude landmark studies such as those used in the development of the Clean Air Act, exempts scientific data and models submitted by industry and would allow the EPA Administrator to select which studies are used in the development of new regulations. (S&P Global)

Bangladesh civil society calls for axing of coal plant plan: Civil society groups have called on the Power Development Board (PDB) to cancel a recently announced 25-year power purchase agreement (PPA) for a 307 MW coal plant one kilometre from the boundary of the Tengragiri reserve forest. Transparency International Bangladesh argues the PDB failed to ensure an environmental impact assessment was undertaken before signing the PPA. The consortium proposing the project includes Power China Resources. The PDB has also announced it will set up a joint venture company with China Huadian for 1320 MW plant at Moheshkhali Island in Cox’s Bazar. (Financial Express, Reuters)

“I can assure you that, unless there’s a change of technology, there would be absolutely no way that anybody would be financing a new coal-fired generation plant [in Australia],”

said Dr Kerry Schott, the chair of the Australian Government’s chair of the Australian Government’s Energy Security Board.


Australia: Port Augusta City Council criticises lack of transition planning and coal ash remediation at Alinta Energy’s closed Northern Power Station.

Indonesia: Greenpeace protests against coal barges passing through Karimunjawa National Park.

Myanmar: Villagers call on President to permanently block the operation  of the Banchaung coal mine in Dawei district.

Poland: Poland’s climate envoy backs involvement of fossil fuel companies in climate negotiations.

South Africa: High Court of Johannesburg finds 14 executives in contempt for blocking access to files of Gupta family’s coal and other companies.

Zimbabwe: Government flags enthusiasm for three coal bed methane projects.

Companies + Markets

Spanish utility looks to close plants reliant on domestic coal by 2020: The Spanish power utility Endesa has flagged that it expects to close all its 5200 MW of coal plants by 2020 “unless capacity payments are put in place.” On an investor conference call Endesa’s CEO, Jose Bogas, said the factors undermining continues coal generation included the costs of upgrading plants to meet the domestic plants to meet new emission standards, rising European Union carbon prices and the EU decarbonisation target. “We think in current market conditions and regulation there is no sense to continuing with domestic coal power plants,” he said. (Platts)

Paris council calls on insurance companies to get out of coal: Paris City Council passed a motion on May 2 calling on the world's biggest insurance companies to end their support for the coal industry in the European Union “and more particularly in Poland” due to its contribution to air pollution and climate change. The CEOs of major insurance companies will meet in Paris between May 30 and June 2 for the annual meeting of the Geneva Association, an insurance industry think tank. Sixteen major insurers have now announced plans to divest an estimated €18 billion (US$21.3 billion) in equities and bonds in the coal sector. Some have gone further and announced restrictions on insuring coal projects. (Business Green, Unfriend Coal)

Adani Power’s losses in India climb: Adani Power — a subsidiary of Adani Enterprises — has reported a US$317 million loss for the year to the end of March, even though it has closed its loss-making 4620 MW Mundra plant. The company now has a total debt of US$7.4 billion and just US$133 million in shareholders equity. The company’s dire financial position raise doubts that the proposed US$2 billion Godda plant and a US$2 billion expansion of Udupi in Karnataka, both of which are proposed to be based on expensive imported coal, can proceed without raising major new capital. The company indicated that high imported coal prices for three of its plants had contributed to the company’s financial problems. Tim Buckley from the Institute for Energy Economics and Financial Analysis said the latest results meant Adani Power is in no position to provide a credible off-take agreement for Adani Enterprises proposed Carmichael mine in Australia. (Economic Times, Guardian)

Alarm at cost of Chinese coal power projects in Pakistan: A competitive bidding process by the Asian Development Bank for the first 660 MW unit of the 1320 MW Jamshoro coal plant in Pakistan implies a tariff of about US$0.063 cents per kilowatt hour. This is 32 per cent cheaper than the US$0.083 cents per kilowatt hour set in the PPAs for both the 1320 MW Saiwahl and Port Qasim coal plants funded as part of the China–Pakistan Economic Corridor program. It has been estimated the discrepancy amounts to over-payment of about US$550 million a year. A former member Energy Planning Commission has called for the PPAs for the Chinese-backed plants to be renegotiated. (The News International)

Indonesia delays coal production caps: Indonesia has once again delayed the introduction of a coal production cap, which the National Development Planning Board proposed be set at 400 million tonnes in 2019. Coal mining companies, particularly exporters, oppose the production cap, which has been proposed to ensure long term availability of coal for future domestic consumption. Instead, the government expects 481 million tonnes of coal to be produced in both 2018 and 2019. “Otherwise there could be idle capacity or coal production could be sub-optimal,” said Bambang Gatot Ariyono, the Director General of Coal and Minerals at the Ministry of Energy and Mineral Resources. (Reuters)

Another major delay for troubled new German plant: Uniper has revealed that the commissioning of the 1100 MW Datteln 4 coal plant in Germany will be delayed by a further year to allow for the replacement of boiler walls damaged during initial testing in 2017. Uniper said the replacement of the boiler walls would cost €270 million (US$322 million) and would delay the commissioning of the plant from mid-2019 to occur “presumably in summer 2020.” Datteln 4 is the only coal plant currently under construction in Western Europe and when first proposed was slated to be online in 2011. (Platts, Uniper)

Coal royalty subsidy for US miner: The US Bureau of Land Management has approved a US$19 million discount for Bowie Resource Partners’ Sufco Mine in Utah. The royalty relief is the latest subsidy for the coal company which aims to export coal through the Oakland port in California. Utah government officials have previously offered to build a 69 kilometre rail line to service the company’s mines and provide a $53 million investment for a coal export terminal in Oakland. A legal action by the port developer, funded by Bowie Resources Partners, is challenging Oakland City Council’s ban on coal cargoes at the port. (Salt Lake Tribune)


Slow death in Siberia: How Europe’s coal dependency is devastating Russia’s forests and indigenous Shor people, Fern and Coal Action Network, May 2018. (Pdf) (The report is also available in Russian.)
This 36-page report details the devastating effects of coal mining in the Kuzbass region of southern Siberia in Russia on the area’s indigenous Shor people and the environment.

How can the EBRD maximise its leverage to bring about decarbonisation?, CEE Bankwatch, May 2018. (Pdf)

This 7-page report examines the European Bank for Reconstruction and Development’s funding of Elektroprivreda Srbije in Serbia and Bulgarian Energy Holding in Bulgaria and reveals how the bank’s support for decarbonisation objectives has failed in these instances.