The Press Association reports that, amid rising energy prices, Downing Street has said that removing VAT from domestic fuel bills would not necessarily cut costs for households facing significant increases in their bills. It adds that prime minister Boris Johnson’s spokesperson said that the factors driving the rise in energy prices are global and defended the use of green levies on bills to fund renewable energy. The newswire quotes the spokesperson saying: “The exposure to volatile global gas prices underscores the importance of our plan to build a strong, homegrown renewable energy sector to further reduce our reliance on fossil fuels.” On the VAT question, it notes that the promise to cut the tax from domestic fuel bills had been made during the 2016 Brexit campaign by Vote Leave, of which Johnson was a leading member. The Daily Telegraph – which features the story on its frontpage – says that the decision has “sparked a backlash among Tory MPs”, which some say that cutting VAT from energy bills should be a “Brexit dividend” now that the UK has left the EU, as the bloc mandates the tax is levied at a minimum of 5% in its member states. Among the MPs quoted as making such comments is Craig Mackinlay, who chairs the so-called “net zero scrutiny” group (19 climate-sceptic Tory MPs), and who also “renewed calls for green levies to be suspended on energy bills”. The i newspaper notes that households are set to face increases in gas and electricity prices from April, when a rising legal cap on domestic energy prices will allow companies to pass some of the high wholesale prices seen in recent months onto consumers. However, in a press conference, Johnson told reporters that he considered a cut in VAT to be a “blunt instrument” that could “end up also cutting fuel bills for a lot of people who perhaps don’t need the support in quite the direct way that we need to give it,” Reuters reports. It adds that Johnson said he was “not ruling out further measures” and would listen to businesses and consumers about other ways to abate the costs of energy. The Sun says that the Department for Business, Energy and Industrial Strategy (BEIS) is drawing up a list of potential urgent measures to present to Johnson that include the VAT cut, as well as temporary suspension of green levies and deferring gas and electricity bills for the most needy. However, it adds that they “face a battle with the Treasury” as a VAT cut alone would remove £1.7bn from public coffers. Supporting this statement, the Financial Times reports that chancellor Rishi Sunak, who oversees the Treasury, has told colleagues that there is a limit to how much help the government can help offset rising energy prices and that support should, therefore, be aimed at households that need it most. The piece also adds that business secretary Kwasi Kwarteng will meet industry leaders today to discuss the matter.

Meanwhile, BusinessGreen has an article titled: “How rising energy costs could shape UK’s net zero agenda in 2022.” It states that the government has continued to insist that the energy crisis underscores the need to promote clean power “in order to reduce reliance on foreign imports of gas and the volatility of international fossil fuel markets”. However, it adds that this has “done little to dispel the belief among a small fraction of backbench Conservative MPs that the government’s environmental policies and net-zero agenda are somehow to blame for rising energy costs”.

Finally, the Press Association reports that the UK government could step in to slash the amount that high-emitting sectors, such as airlines, power plants and heavy industry, pay for each tonne of carbon they emit under the emissions trading scheme (ETS). This marks the second time in two months that officials have triggered the “cost containment mechanism”, which happens when the carbon price is consistently above expectations, in a move that the newswire says is linked with the wider increase in global natural gas prices.

Indonesia’s decision to ban thermal coal export for January is likely to put China’s short-term energy supply “under threat”, the South China Morning Post reports, citing analysts. However, any “long-term” impact from the export suspension by Indonesia – China’s largest import source of thermal coal – is “generally manageable” due to the expected drop in electricity consumption in China during the Lunar New Year celebrations, analysts add, according to the publication. The publication also writes: “Due to Beijing’s ongoing trade dispute with Australia, China is increasingly reliant on Indonesian thermal coal, and in the first 11 months last year it imported 177m tonnes.” Global Times, a Chinese state-run tabloid, reports that the ban will lead to a “limited impact” on China’s coal supply. The newspaper says that China’s coal supply is “heavily reliant on domestic output since imports only account for about 10 per cent”, and, therefore, the impact of the ban “will be limited and controllable”. It attributes the comments to Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. Bloomberg writes that the ban “may have a limited impact on top buyer China after the country boosted domestic output to stave off shortages of the fuel last year”. Fengkuang Coal Logistics, a Chinese thinktank, is quoted by Bloomberg as writing: “Even if the Indonesian coal ban takes effect in January, its impact on the overall inventory of domestic power plants is still generally controllable.”

On the same story, Reuters reports that “Indonesia’s state utility secured an extra 7.5m tonnes of coal supplies on Tuesday” ahead of its scheduled reexamination of the ban on Wednesday. In a separate report, Reuters notes that “China’s thermal coal futures surged by as much as 7.8% to kick off 2022 on concerns of supply disruptions after Indonesia”. Similarly, the Financial Times says that “Chinese coal futures rose on Tuesday ahead of a review of an export ban announced last week by Indonesia…stoking fears of knock-on effects for the global economy”. It adds that “the most active contract traded on the Zhengzhou Commodity Exchange rose as much as 8% on Tuesday compared with its Friday closing price, with several other contracts also up more than 6% at midday”. A further Reuters story reports that Indonesian coal miners are due to hold talks with government officials on Wednesday about the ban on coal exports, which the news wire states “has unnerved global markets for the fuel”.

Elsewhere, the Independent reports that a nuclear fusion reactor in China has “set a new record for sustained high temperatures after running five times hotter than the sun for more than 17 minutes”. Citing China’s state news agency Xinhua, the Independent says that the device, called the Experimental Advanced Superconducting Tokamak (EAST), “reached temperatures of 70,000,000C during the experiments”.

Finally, Climate Home News reports that climate advocates are hailing “extraordinary progress” in Beijing’s fight against pollution, after authorities declared that the capital city had met its air quality targets for the first time in 2021, almost a decade earlier than experts expected. According to the news website, this progress follows “measures to curb coal smoke from heavy industry and home heating”.

Adani, India’s largest trader of imported thermal coal, has won a contract to supply overseas coal to the nation’s top electricity generator, NTPC, as India “aims to avoid a repeat of last year’s energy crisis,” Bloomberg reports. The news website notes that Indian power producers are under pressure to increase coal stockpiles following supply disruptions and rising demand last year that resulted in shortages and outages. It adds that this comes in spite of the country’s goal of reducing reliance on fuel imports and prime minister Narendra Modi’s “huge push to add renewables”.

Meanwhile, in Poland, Politico reports that coal miners have launched a two-day blockade of coal shipments from state-owned mining company PGG to protest what they say is inadequate pay as they are forced to work more due to soaring energy prices boosting demand for coal.

In separate coal news, the Guardian reports that the world’s largest coal port – namely, Port of Newcastle in Australia – has announced it will now be powered entirely by renewable energy.

Associated Press reports that, in the US, state-regulated company Idaho Power has submitted a 20-year plan to regulators that phases out coal power plants by 2028 as part of its effort to provide only clean electricity by 2045.

After last month stating that he would vote against US president Joe Biden’s Build Back Better Act in its current form, Senator Joe Manchin has told reporters that he would be relatively open to the climate change aspects of the bill, according to the Hill. It quotes the West Virginia Democrat, who will likely cast the deciding vote on the bill in the Senate, said “the climate thing is one that we probably can come to an agreement much easier than anything else”, according to the news website. However, he also said there are currently no negotiations going on around the package, it notes.

The New York Times has a piece looking ahead to 2022, which states that “as the new year opens, president Biden faces an increasingly narrow path to fulfil his ambitious goal of slashing the greenhouse gases generated by the US”. It cites the failure to persuade Manchin to back the $1.7tn bill as a key factor in this.

In an editorial concerning the on-going energy crisis, the Guardian notes that even before global energy prices began to rise last spring, many people in the UK could not afford to keep their homes warm during winter. It says that the government “needs a plan that is morally fit for purpose”, suggesting the expansion of eligibility for the winter fuel allowance from pensioners to all those on low incomes, as well as an expansion of the warm home discount scheme. “Some of the money for this could come from a windfall tax on North Sea gas producers, who are making record profits as a result of the crisis; the government’s own VAT and booming carbon tax receipts could also be deployed,” it says. In the longer term, these issues should also provide a wake-up call for dealing with energy inefficiency in British homes, the newspaper continues. “A joined-up, properly financed plan to insulate and retrofit social housing to make it zero-carbon would significantly reduce household bills for the poor, reduce emissions and act as a catalyst for wider transformation,” it concludes.

An editorial in the Daily Mirror also takes aim at the government’s handling of energy price increases. It calls Boris Johnson’s refusal to implement a 5% VAT cut on energy bills “another broken promise from a PM taking people for fools”.

A Financial Times editorial weighs in on the European Commission’s much-discussed “green taxonomy”, which is intended to mobilise finance towards environmentally friendly “green” technologies and away from “brown” ones. The editorial notes that “where best to draw the line” has not been a straightforward process, particularly as member states discuss the status of natural gas and whether it should count as a “temporary bridge”. “To meet its goals the EU must start rapidly phasing out fossil fuels now. But it also requires a recognition of just how difficult it will be to deploy sufficient renewable energy,” it states. To this end, it says that the commission is right to allow the use of gas power but also “insist on conditions for any new natural gas infrastructure to genuinely reduce emissions, rather than to be used as an additional source of power”. It adds that conditions should be tightened in future, and that the taxonomy must not be constrained by the binary distinction between green and brown, instead recognising the subtleties of different energy types. “Ultimately natural gas is not a green source of energy. Including it on the list – intended to be the international ‘gold standard’ – risks imperilling Europe’s climate leadership, emboldening countries elsewhere to continue building new gas plants,” it continues. However, it says that gas does have a “temporary role during the transition” and notes that Europe must also show leadership “not only from a technological point of view but also politically, managing and spreading the costs”.

The frequency of storms in coastal areas of southern West Africa (SWA) has “doubled” over the past 30 years as a result of deforestation, a new study suggests. The authors analyse three decades of satellite data over a 300km coastal belt in southern West Africa – a region that “has little remaining intact forest”. The study finds that deforestation has driven higher coastal storm frequency by increasing the thermal contrast between the land and ocean. The authors conclude: “The coastal location of deforestation in SWA is typical of many tropical deforestation hotspots, and the processes highlighted here are likely to be of wider global relevance.”