The MP claims that Australian companies have been lying for years about the quality of coal and exporting low-quality, more polluting coal. India is one of the major importers of Australian coal
A couple of days ago, an Australian MP made a speech in the Federal Parliament claiming that thousands of documents had been shared with him that prove that the quality of Australian coal is inferior than so far claimed. Australian companies have been lying for years about the quality of Australian coal through fraudulent quality reports for their exports and paying bribes, he added. He named exports to Japan, South Korea, China and India as being affected, and companies including TerraCom, Anglo American, Glencore, Peabody and the Macquarie Bank as being involved.
The Independent MP, Andrew Wilkie, stated that “In essence, coal companies operating in Australia are using fraudulent quality reports for their exports and paying bribes to representatives of their overseas customers to keep the whole scam secret. This has allowed them to claim for years that Australian coal is cleaner than it is in order to boost profits and to prevent rejection of shipments at their destination”.
As an example, Wilkie said that a key coal-testing company in Australia, SGS, also committed fraud at a similar rate. A test lab result from SGS gave a moisture content of 16.7% to a coal sample in a draft report and changed it to 15.9% in the final version to save hundreds of thousands of dollars in extra profit from a small shipment to Japan and ensured that it wouldn’t be rejected on arrival. Studies have found that higher moisture content in coal reduces its efficiency when it is burnt.
Testing lab ALS told the Australian Stock Exchange in a statement in April 2020 that an independent investigation had found “approximately 45-50% of certificates of analysis were manually amended without justification”.
This raises questions about whether countries that import Australian coal have been paying higher prices for lower quality coal. Countries may have been exposing their populations to higher health risks from burning coal that they were told was cleaner. The Australian Conservation Foundation has stated that “the Australian coal industry’s reputation is in tatters following these damning revelations”.
Tim Buckley, director, Climate Energy Finance, said, “Australian coal exporters possibly made billions by falsifying testing certificates leading to not only an increase in coal consumption but also in CO2 emissions. Importers in Japan, South Korea, China, and India assumed they were buying high quality low moisture coal but instead could have received inferior quality coal resulting in more CO2 emissions as well as a high fossil fuel import bill. Australia has already exported more than 100 million tons of thermal coal this year to South Korea, Japan, India, and China combined. This fraud has extended back over a decade, putting in question the integrity of potentially hundreds of billions of dollars of Australian coal exports.”
An analysis highlighted how this fraud could have led to more CO2 emissions and also increased consumption of coal. One certificate for the shipment of around 61,805 metric tons of coal to Japan mentioned above, where moisture content of the coal was changed from 16.7% to 15.9%, would result in extra 16,007 metric tons of CO2 emissions. According to the data, Australia exported more than 600 million tons of thermal coal to Japan in the past six years, including the current year.
Expressing concern over the claims, Shweta Narayan, Global Climate and Health Campaigner, Health Care Without Harm, said, “Coal is polluting and toxic. This revelation that exporters in Australia manipulated coal quality certificates to sell low quality coal as high quality is very concerning. This would in effect mean increased pollution and health risks for countries that imported coal from Australia. India has been a long-term partner and imported millions of tons of coal. If Australia manipulated coal quality certificates of shipments to India, this would have likely resulted in increased pollution and associated health risk for millions of Indians”.
The same sentiments were echoed by other countries who have been importing coal from Australia. Joojin Kim, executive director of Seoul-based Solutions for Our Climate, said, “South Korea over relies on Australian coal, importing millions of tons of thermal coal every year. South Korea paid top dollar and bought coal from Australia under the impression that it was of higher quality. However, this recent scam suggests that imported Australian coal may have been of much lower quality, adding to South Korea’s existing air pollution problem and public health burden from fossil fuel use.”