In a major step forward, the International Financial Corporation (IFC) has published new rules for its investments in commercial banks around the world, under which it will “encourage” them to exit all coal investments in Africa and Asia by 2030. The IFC is hugely influential in global banking policy as its practices are widely adopted by commercial and private sector banks, and its latest stance will see it step away from investing in any financial institution that does not have a plan to phase out support for coal.
The decision could trigger a shift in the financial sector’s support to the fuel and weaken its prospects even further.
Shell’s to slash 7,000-9,000 jobs in transition plan
Oil and gas major Royal Dutch Shell announced yesterday that shifting to low-carbon energy could result in about a 10% reduction in its 83,000 strong workforce. The plans come a month after Shell launched a board review of its business to find ways of deeply cutting costs of shifting operations to low-carbon energy. The company has announced that the move is expected to cut between 7,000 and 9,000 jobs including around 1,500 people who have agreed to take voluntary redundancy this year.
Poland agrees to shut down coal mining, but only by 2049
The Polish government has signed a deal with the country’s coal mining sector to permanently shut down its hard coal mines by 2049, and has also agreed to support the workers who will be affected. The deal is a landmark development in the country’s history as it is Europe’s largest coal power consumer, and home to some of the strongest supporters of the fuel, despite its falling demand amidst cheaper alternatives like wind energy.
However, critics have been quick to point out that 2049 is a long time away, and that coal needs to be phased out well before the date to meet the EU’s 2050 target of climate neutrality. Poland has repeatedly opposed the target on the grounds of the cost implications it would have on its economy. Neighbouring Germany is on track to phase out coal mining by 2038 at the latest, but may reach the target sooner.
Coal power giant GE to stop building new plants
Struggling coal power giant GE (General Electric) has announced it will stop building any new coal plants after being battered by the fuel’s declining financial returns. GE is one of the world’s largest coal power producers, but with competition from renewables and natural gas bruising coal’s economic competitiveness and market demand, GE has decided to exit new capacity builds. The decision comes just five years after its mammoth, $9.5 billion acquisition of Alstom’s power and grid business in 2015, which GE purchased to further expand its exposure to coal.
The firm’s stock price has already fallen by 42% in the last year and it has so far laid off thousands of workers and fired two CEOs as it attempts to plug its monumental losses.
Australia: BHP stops thermal coal sales, Queensland approves new coal mine worth $1 billion
Mining behemoth BHP’s thermal coal will no longer be burned to produce power in Australia as the group is dismantling its 10km-long conveyor belt that feeds medium quality coal from its Mt. Arthur mine to AGL’s Liddel and Bayswater power stations. The move is a part of BHP’s plan to fully exit coal mining by the end of 2022, but it may continue to export higher quality coal to Japan and Korea over persistent demand from the two countries.
However, the new Queensland government has approved a new coal mine — for coking coal this time — worth $1 billion as part of its COVID-19 recovery plan for the state. The government has been keen to show its support for coal mining after the previous Labour government failed to win the election, in part due to its lack of support for the Adani Carmichael mine. The new mine, if it goes into operation in 2022, would produce 15 million tonnes of coal a year (vs. 10 million tonnes a year from Carmichael).