EURACOAL

Executives from the European coal industry met in June at the annual meeting of the European Association for Coal and Lignite (EURACOAL) to discuss the industry’s strategic direction against the backdrop of the UNFCCC Paris Agreement of December 2015 and the EU’s related commitment to a 40 % reduction in greenhouse gas emissions by 2030. Prior to the meeting, EURACOAL President, Dr. Wolfgang Cieslik, met with Corina Georgeta Popescu, Secretary of State at the Romanian Ministry of Energy, to discuss the current difficult situation in the European coal and lignite industry (Figure 1).

EURACOAL members, including coal and lignite producers, coal importers and major coal users from 18 countries, face an unprecedented, six-year long market downturn – reflecting a global crisis. The coal market is oversupplied and prices have slumped to levels not seen since 2003. Moreover, privileged feed-in tariffs for renewable energies have caused a collapse of wholesale electricity prices in the EU. Wholesale prices no longer cover the cost of any type of generation. Only those operating in regulated markets can contemplate investing for the future.

The European Commission’s “Road from Paris” communication on signing the Paris Agreement states that the, “EU’s commitment to a clean energy transition is irreversible and non-negotiable” (COM(2016) 110). Given this categorical political direction, coupled with a depressed market, the coal industry cannot survive in its current shape. In the end, there has to be again a fully functional market design which gives coal a profitable setting to run the necessary existing power plants and gives an opportunity for the new investments that will be needed to ensure continued grid stability. If not, then 300,000 jobs are at stake: men and women who work hard to provide 26 % of all the EU’s electricity, whatever the weather.

The industry proposes to the European Commission three measures in response to the crisis:

1. Allow the EU Emission Trading System to function as intended and hence reduce the Union’s carbon emissions at the lowest cost to society.
2. Review the 31st December 2018 deadline on State aid to the coal industry (Council Decision 2010/787/EU) so that Member States who did not yet submit a restructuring plan themselves can determine how best to manage the different decline rates of their own indigenous coal production.
3. Respond to the opinion of the European Economic and Social Committee (CCMI/138) by developing a “Transition Support Plan for the Communities and Regions Dependent on Coal Production”. This plan should ensure that coal mining regions can really benefit from the irreversible and non-negotiable clean energy transition.

With coal, the EU’s energy transition will be more affordable and more secure. Without coal, the EU risks its competitive position in a world that is not turning away from coal. Japan is e. g. currently constructing or planning 40 new coal-fired power plants, including two state-of-the-art units at the Kobe Steel Works near Kyoto. (EURACOAL)

On 25th January 2016, Wolfgang Cieslik, member of the Board of Management at STEAG GmbH, Essen, and President of the German Coal Importer Association (VDKi), Hamburg, was elected the new President of EURACOAL, the international interest group of the coal industry. He will serve a period of office of one year, replacing Zygmunt Łukaszczyk, Chairman of the Board of Katowicki Holding Weglowy S. A., Poland.

On 9th October 2015 the European Association for Coal and Lignite (EURACOAL) released a report on the funding of anti-coal campaigns by NGOs. It finds that a wave of money is flooding into the EU policy space from a small number of super-rich donors, many from the US, who hope to influence EU climate and energy policy in favour of their own preferred solutions, whatever the cost to European consumers. This is a story about money and power; a story in which Europe is viewed as a “laboratory for the world”.

Public campaigns against coal are portrayed as grass-roots, climate-action movements, but are in fact well-orchestrated by a handful of organisations with enormous budgets. The European Climate Foundation (ECF) i. e. spends 26 million € each year on lobbying against coal in Brussels. It sits at the centre of a complex web of compliant NGOs, paying each of them to echo its own call for climate action. Together, they command significant influence with European governments and the European Commission, using well-paid professional agents. The same message appears to come from many mouths. In a properly functioning democracy, the changes that are demanded by the ECF and its wealthy donors would come about through the ballot box. Instead, the ECF uses less-than-transparent methods on behalf of its few wealthy donors, some of whom stand to profit from the policies it promotes.

EURACOAL does not question climate change and the need to act. The association stands for progress through the deployment of cleaner, more efficient technologies. These can cut CO₂ emissions by 30 % or more with certainty and at a lower cost to consumers than any alternative. Conventional electricity generation from coal is flexible and reliable, meeting 28 % of EU electricity demand. It will have an important role over the coming years to back up the growing output from wind turbines and solar PV, which produce nothing at all on dark windless nights. With carbon capture and storage (CCS), coal-fired power plants will be a competitive alternative to other low-carbon technologies, all of which will be needed to meet growing electricity demand.

The Secretary-General of EURACOAL, Brian Ricketts, warns: “Of a project to dismantle our way of life and to replace it with an experiment promoted by an elite class which seeks influence over EU policy makers, power over EU citizens and a new concentration of wealth taken from us all.” (EURACOAL)

In January Dr. Christian Ehler MEP and Prof. Jerzy Buzek MEP hosted the first European Round Table on Coal of the new EU-Parliament. MEPs from across the Union came along to better understand coal and the contribution it makes to a secure and reliable energy supply: 28 % of the EU’s electricity is produced from coal.

Prof. Buzek expressed his pleasure to be once again working with the coal industry. He reflected that when he entered the European Parliament in 2004, his first assignment in Brussels outside of the Parliament was a European Commission meeting with EURACOAL. He saw indigenous coal production as important, but only with technological change to improve efficiency. Here, he was proud of his record on ensuring that clean coal technologies remained in the RTD Framework Programmes. Today, he called for a shift in the language used by policy makers: a low-emission future is possible, a low-carbon future is not because the world will continue to depend heavily on fossil fuels, including coal and lignite. In the lead up to COP-21 in Paris, Prof. Buzek warned that the EU could not be a “lonely front runner”. In this respect, changes to the ETS must not be allowed to damage the economy, so allowances must be allowed back into the system and carbon-leakage protection must continue, he said. On the latter point, he turned again to language. For the public, “carbon leakage” seems innocuous, but it is really a discussion about “job leakage” which is a much clearer term and concerns everyone.

Prof. Klaus-Dieter Borchardt gave the keynote address, touching on many of the major issues facing the energy sector, as viewed from his position in the European Commission where he is Director – Internal Energy Market. The idiom that “coal is a fuel of the past” is false, he said, “coal is back” with a leading share in power generation, a share that is growing. In Europe, coal offered flexibility and security – Prof. Borchardt had witnessed this during visits to modern coal plants. He noted that renewables were growing, but were not economic. Therefore, the Commission wanted to see renewable producers integrated into a market where they have balancing responsibility, pay correct grid fees and no longer benefit from priority feed-in tariffs. He challenged the coal industry to be more proactive; to achieve the now agreed targets for 2030 and beyond, there was no question in his mind that CCS would be needed, yet Europe now lagged behind other regions with no large-scale demonstration. He wanted a framework that would allow coal to be part of a balance energy mix, so that Europe could benefit from a secure and competitive energy supply as the share of intermittent renewables grows.

Recently elected EURACOAL President, Dr. Zygmunt Łukaszczyk, who is also President of Katowicki Holding Węglowy S.A. – one of Poland’s largest coal mining companies, warned that, like Brussels, the coal industry in Europe was on “Yellow Alert”. Low oil prices meant that coal prices had fallen to impossible levels for many coal producers; geopolitics were damaging the prospects for indigenous coal production, not any lack of demand. It was therefore important for the industry to have ambassadors and he very much welcomed the work of Dr. Ehler and Prof. Buzek, noting the amendments that they had tabled in respect of the Commissions communication on energy security. He remarked on coal’s glorious past and was confident that it would have a glorious future, but only if policymakers prioritised economic development. Get that right, and everyone is happy to support tough climate and environmental policies: without jobs, progress is impossible, he said. Dr. Łukaszczyk observed too much electioneering when Europe needed statesmen with vision and resolve – the Coal Round was led by statesmen and he looked forward to working with the Parliament on solutions to the challenges that lie ahead.

Dr. Ehler concluded the meeting with some positive points. He welcomed Prof. Borchardt’s willingness to work on a “Master Plan for Coal” with the active input of industry. He praised the Commission for its decision to appoint a coal desk officer: the successful candidate would be busy from her first day. He was optimistic that the new Commission, under President Juncker, was shifting its priorities towards economic growth and security – no doubt influenced by those Member States who face real risks to gas supply. Overall, Dr. Ehler felt reassured that after ten years of hard work, clean coal technologies remained in the Commission’s research programmes. Now, the challenge was to see their greater deployment in the EU given that Japan and other countries were rolling them out without hesitation. (EURACOAL)