“It also calls upon parties to ‘accelerate efforts towards the phase-down of unabated coal power’. This is not a call to unilaterally end coal production but rightly recognises that decarbonisation must be balanced with the needs of many developing nations for affordable and reliable power.
The reality is that the demand for thermal coal and metallurgical coal will remain relatively robust over the next few decades.
— David Moult, Yancoal
“Net zero emissions does not mean no emissions. In addition to meeting Asian demand for high-quality thermal coal, we will continue our investment in the Low Emissions Technology Australia [LETA] fund to progress carbon capture and storage technology, to ensure where coal is required in a carbon-constrained world it can be used with minimal greenhouse gas emissions.”
Yancoal chief David Moult said there was no change to his belief that demand for coal would remain robust in the decades ahead.
“For several years now, Yancoal has openly acknowledged that a change in the global energy mix is inevitable as the world transitions towards a lower carbon economy, and that resource companies must work to mitigate and manage climate change impacts. The recent COP26 conference in Glasgow was an important opportunity to outline how this could be implemented,” he said.
“Despite the anticipated increase in the proportion of renewables and other non-fossil-fuel energy sources in the global energy mix, which Yancoal supports, the reality is that the demand for both thermal coal and metallurgical coal will remain relatively robust over the next few decades.
“We believe the Australian coal mining industry has a key role to play in the energy transition by continuing to supply high-quality coal, which has a lower emissions profile than other exporting countries and which ensures that our customers are able to provide affordable, reliable and modern energy.
“This will be partly underpinned by the ongoing demand generated from high efficiency, low emissions power plants across Asia.”
Australia ‘in with the laggards’
New Hope chief executive Reinhold Schmidt said his business would respond to the demands of customers, who in recent months have paid record prices for Australian thermal coal.
“The outcomes of COP26 confirm our assessment that there will be an energy transition which will take some decades to play out. There will be an ongoing demand for thermal coal, particularly in Asia, which demand can be met by the high-quality, low-emission coals that we produce,” he said.
“We are a business that responds to market needs and our stakeholders.”
Australian Conservation Foundation spokesman Gavan McFadzean said Australia’s stance on climate change was becoming increasingly distanced from the nation’s closest allies such as Britain and the United States.
“Australia has once again been part of the problem, not the solution. We are in the group of climate laggards – along with Russia and Saudi Arabia – that have gone to great lengths to water down the agreement surrounding coal power and subsidies,” he said.
“Australia is one of the sunniest and windiest places on earth, we are missing a golden opportunity to become a global renewables superpower. We should be leading from the front, not lagging from the very back.”
While the switch in language from “phase out” to “phase down” has dominated headlines in recent days, the targeting of “unabated” coal-fired power could be just as significant for the long-term future of the coal industry.
The reference to phasing down “unabated” coal-fired power leaves open the potential for coal-fired generators to continue operating with abatement measures in the event such measures become financially viable in future.
Carbon capture and storage has to date proved financially unattractive when attached to coal-fired power stations at locations such as NRG Energy’s WA Parish Power Station in the United States, but the coal industry continues to fund further research and development, including into whether the low-emissions Allam cycle can be converted from gas to coal.
“Abatement pathways include retiring inefficient plants, co-firing low-carbon fuels such as ammonia or hydrogen and retrofitting CCS,” said Prakash Sharma from resources industry intelligence firm Wood Mackenzie.
Mr Moult said Yancoal still believed there was merit in researching and funding carbon capture and storage projects.
Whitehaven hopes to produce higher volumes of semi-soft and hard coking coal – otherwise known as metallurgical coal – for steelmaking in future through development of new mines at Vickery in NSW and Winchester South in Queensland.
Mr Flynn said those plans were not derailed by the Glasgow pact.
“Importantly, the pact does not call for the same phase-down of metallurgical coal, which will be essential to meet ongoing global steel demand to support development, and will become a growing proportion of our business,” he said.