The Chairman of the world’s largest coal miner, Coal India Ltd. (CIL), said that the miner would look to aggressively invest in India’s solar wafer production market in the coming years, with an earmarked budget of ₹60 billion (~USD 830 million) by 2024. At the same time, CIL expects to lose 13,000-14,000 employees every year as it shuts down smaller mines, and the Chairman has remarkably stated that “We’re going to lose business in the next two, three decades. Solar will take over (from) coal slowly as a major energy provider in the coming years”.
While more details about the loss of business were not made available, the statement is hugely significant as CIL was given a target of mining one billion tonnes of coal a year by 2023-24 to keep coal as a major player in the power sector up to 2050. Yet, the load factors of India’s coal plants have fallen to as low as 50% and the recent spate of coal mine auctions brought only meagre interest.
HSBC, Swiss Re and AIA step closer to coal exit
Europe’s largest bank, HSBC, signed a shareholder resolution that would commit it to ending all funding to coal projects and bring it more in line with the Paris Agreement. The resolution is a step forward in the bank’s decision from last year to go net-zero in its operations by 2030, and if passed at its annual meeting on May 28, the bank will have to phase out financing for coal power and thermal coal power in the EU and the OECD markets by 2030 and other regions by 2040. As Europe’s largest coal financier, the decision is a big step forward since in 2019, the bank’s exposure to coal was 3.5 times higher than when the Paris Agreement was signed in 2016.
Similarly, insurers Swiss Re and Hong Kong-based AIA Group pledged to stop investing in coal by the end of the decade. Swiss Re is the world’s second largest reinsurer and its decision will stop it from insuring coal projects in the OECD markets by 2030 and the rest of the world by 2040. AIA, on the other hand, released its new environmental, social and governance report, under which it would end its direct shareholding to coal power and coal mining projects (estimated to be to the tune of USD 6 billion) by the end of 2021. The largest pan-Asian insurer will extend the pullout by ending all coal financing and investments by 2028.
Global methane emissions could rise with new coal mines
A new report by research outfit Global Energy Monitor (GEM) found that the climate impact of the methane emissions from the world’s proposed coal mines could be as bad as that from the CO2 emissions of all of the US’s coal plants. The report analyses the methane emissions from 432 coal mines across the world and predicts that unless addressed, methane emissions from the mines would amount to 13.5 million tonnes (MT) a year — a 30% increase from today.
This could be a major issue as methane is more potent that CO2 in terms of the greenhouse effect, and the report finds that in the following order, these countries are likely to be the biggest contributors (in CO2 equivalent) over a 20-year horizon: China (572 Mt), Australia (233 Mt), Russia (125 Mt), India (45 Mt), South Africa (34 Mt), the US (28 Mt), and Canada (17 Mt).
However, Democrat lawmakers in the US have proposed a bill that would penalise the country’s oil and gas producers for methane emissions by 2023, with the idea of curbing the emissions by making the cost prohibitively high.
World’s largest banks funded $3.8 trillion worth of fossil fuel projects since 2016
A scathing new report by a coalition of climate action trackers found that 60 of the world’s largest bankers financed $3.8 trillion worth of fossil fuel projects between 2016 – 2020, despite a number of them voicing their support for the Paris Agreement. The agreement was signed in December 2015, and the Banking on Climate Chaos 2021 report lists the worst offenders as JP Morgan Chase ($51.3 billion in direct financing, $317 billion in lending and underwriting), Citi Group (whose 2020 funding for coal was more than double of its quantum for 2016), and the Bank of America (a prominent financier of Big Oil in the Arctic). Fracking, offshore oil and gas and LNG were amongst the other beneficiaries.
Together the banks also put in more money into fossil fuels last year than immediately after December 2015. However, JP Morgan Chase’s funding did fall by 20% in 2020, while Wells Fargo’s funding dropped by a sizeable 42% in the same year. On the other hand, France’s BNP Paribas’s financing for fossil fuels grew by 41% in 2020 over 2019 — and by 141% over 2016 — and its peers, such as Crédit Agricole and Société Générale continue to pour billions into established oil drillers like Total and ExxonMobil. This is despite the French government having banned new oil and gas exploration licences in 2017.