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Simon Evans

Simon Evans

19.09.2014 | 4:25pm
CoalEU policyUK and Germany balk at coal exit plea
COAL | EU POLICY | September 19. 2014. 16:25
UK and Germany balk at coal exit plea

Earlier this week a major global report  explained how the world could tackle climate change while growing the economy,  at no extra cost.

One of its top recommendations was for rich countries to get out of coal as quickly as possible. It said these countries should immediately promise to stop building new coal plants and to accelerate the closure of old power stations.

That sounds like a pretty simple ask. So are the EU’s major coal users like the UK and Germany up for an accelerated coal phase-out? Not exactly, it turns out.

Cut coal for growth and climate

The coal exit plea comes from the Global Commission on the Economy and Climate‘s New Climate Economy report. The UK government and others set up the commission to investigate whether the global economy could continue to grow while tackling the risks of climate change.

The report finds that most of the emissions cuts required to avoid dangerous warming could be made at no additional cost to the economy, if there is “strong and broad implementation” of its ten point plan. The findings were  backed by UK climate secretary Ed Davey.

The report puts special emphasis on reducing coal emissions. Coal is the dirtiest of fossil fuels and is responsible for three-quarters of all power sector emissions despite only providing two-fifths of power. So getting out of coal is an “essential feature” of climate action, the report says, and it is “critical” to limit further coal expansion.

Tackling climate change isn’t the only reason to cut coal, the report says. It finds that the cost of life lost to air pollution associated with coal in China is over 10 per cent of GDP, and even in Germany is over five per cent.

It concludes:

“All countries should aim for a global phase-out of unabated fossil fuel power generation by 2050. High-income countries should commit now to end the building of new unabated coal-fired power generation and accelerate early retirement of existing unabated capacity, while middle-income countries should aim to limit new construction now and halt new builds  by 2025.”

Coal use in the EU

That’s a strong and straightforward set of recommendations. Given the EU likes to consider itself a climate leader, you might expect it to leap on board. But the reality is much more complicated.

Two thirds of the EU’s coal emissions come from Germany, the UK and Poland according to campaign group Sandbag. These three countries have a combined capacity of over 100 gigawatts of coal-fired power plant.

All three are high-income countries. So according to the New Climate Economy report they should commit to accelerate coal closures and stop building new plant now.

Carbon Brief approached the UK Department of Energy and Climate Change (DECC) and the German Ministry of Economy and Energy (BMWi) to ask if they accepted this challenge. Neither gave a straight yes or no answer, though DECC came close.

A DECC spokesperson said:

“We are moving to a low carbon energy supplyâ?¦ Any new coal-fired power stations must be built with carbon capture and storage (CCS) technology which will reduce carbon dioxide emissions while keeping fossil fuels in the UK’s electricity supply mix.”

DECC also points out that new coal plants in the UK would have to comply with the emissions performance standard set by the Energy Act. This amounts to a ban on new coal without at least partial CCS but it doesn’t affect old coal.

DECC notes that five coal plants have closed since December 2012 and a further two must close by end 2015 at the latest. It says “we can expect this trend to continue”. So the UK is preparing for closures but is not pushing for the accelerated shut-downs the New Climate Economy report recommends.

If DECC is right and old coal plants will close down anyway, there would seem to be a political opportunity to claim climate leadership by announcing a ban on unabated coal.

That’s what the Liberal Democrats say they will include in their 2015 manifesto. The Labour manifesto will include a slightly different pledge that will amount to the same thing – a 2030 target to decarbonise electricity generation.

No simultaneous coal-nuclear exit

There doesn’t seem much chance of similar pledges in Germany, however. New capacity is unlikely to be approved even though there is no emissions performance standard as in the UK. But an accelerated phase out of existing coal seems unlikely.

The German energy ministry BMWi tells Carbon Brief the country is a “climate pioneer” with strong performance on emissions reduction, ambitious national targets and its ‘Energiewende’ transition towards renewables and away from nuclear.

A BMWi spokesperson said:

“A simultaneous exit from nuclear energy and coal is not possible in a highly industrialized country like Germany.”

The huge public opposition driving Germany’s nuclear exit means that its rapidly expanding renewables sector is effectively replacing nuclear, not coal, and this is set to continue.

German environment minister Barbara Hendrick recently said:

“A complete coal phase-out is not feasible at the momentâ?¦ Even with a target of 80 per cent renewables by 2050 there is still 20 per cent of the power mix that has to come from fossil energy.”

BMWi tells Carbon Brief it supports the EU emissions trading scheme (EUETS) as the central means for reducing energy emissions. This seems to be a long way from the clear and accelerated coal phase-out the New Climate Economy report calls for.

More EU support for coal?

Reliance on the EUETS is unlikely to lead to a coal phase out, let alone an accelerated one, because the carbon price is so low.  EU industry has so far largely been protected from overseas competitors not subject to carbon pricing as it has received free emissions permits.

This practice is set to be extended to 2020, in a move that campaigners say will hand industry a â?¬5 billion windfall for permits it doesn’t need. It is also likely to push the carbon price further down.

Strong ETS reforms that might raise prices and seriously dent coal’s prospects are opposed by coal-reliant states such as Poland, the EU’s other major coal user. It gets over 90 per cent of its electricity from coal though it is attempting to diversify its energy mix.

In Poland new coal capacity is being added, a further 10 gigawatts is going through the planning system and EUETS funds that were set aside to help ease its low-carbon transition have instead been spent on upgrading its coal fleet. These upgrades will have increased coal efficiency and reduced emissions, but still amount to perpetuating Polish coal reliance.

The EU’s 2030 climate and energy package that will set targets for emissions, energy efficiency and renewables presents an opportunity to get on board with the New Climate Economy report’s coal exit plea. But according to analysis from Sandbag it too will leave coal “substantially untouched”.

Financial support being planned to get Poland and others to sign on to the 2030 targets could once again end up propping up its coal industry by paying for efficiency upgrades or even for new, more efficient coal plants. Conditions could be added to prevent this support going to coal, but the idea is unpopular with many member states.

The New Climate Economy report identifies getting out of coal quickly as a priority for climate action. Yet some of the EU’s heaviest coal users do not seem to be willing to fully accept its recommendations. And the centrepieces of the EU’s climate policy – the EUETS and 2030 package – look set to leave coal unscathed or worse.

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