As the UN’s climate chief called for more “urgency” from negotiators at the ongoing Bangkok climate talks, a new international report found that a socially just transition is already feasible for coal workers and communities, while a global decline in coal production is expected.
The report, published on Wednesday (5 September), identified a large number of specific policy solutions while underlining that there is no universal blueprint for implementing a just transition.
“Many of them have been tried and tested during past coal transitions. The design of such programmes matters greatly to their effectiveness, as does the meaningful consultation and participation of stakeholders early on in the decision-making process,” the report reads.
But the authors warned that early anticipation and preparation of the transition is vital to achieving the best results, with tailored workforce transition programmes and the building of local economic resilience requiring time, preparation and learning by doing.
The report, called “Coal Transitions: Research and Dialogue on the Future of Coal”, was conducted by the Coal Transition Project, which reunites 10 research institutes from around the globe and is being led by Paris-based Iddri.
It examined the different pathways to implement coal transition and focused on six countries: China, India, Poland, Germany, Australia and South Africa.
The report reads as a call for action to governments across the world as it stressed that coal transitions are already underway around the globe because of technological improvements in the renewable energy sector and growing competitiveness of the green energy.
“The international context surrounding coal as an energy source is changing quickly,” the authors stressed.
They pointed out that 36 governments and 28 companies have already committed to phasing out coal from the power sector by 2030.
“Governments are beginning to put in place new exploratory initiatives, just transition task forces, coal transition commissions and stakeholder consultation platforms to explore options for the end of coal use,” they wrote.
The German and Polish cases
Among the 15 largest coal consumer countries in the world, there are two European states: Germany and Poland. They account for respectively 222 Metric tonnes per annum (Mtpa) and 129 Mtpa, respectively. That compares to 3,607 Mtpa consumed by China, the largest coal consumer in the world.
Given the change of paradigm in the global coal market, the authors of the Coal Transition Project expect a worldwide coal production decline, with Germany and Poland being no exception.
“Existing lignite mines (roughly half of Poland’s coal production) are expected to significantly decline in productivity independently of climate policy by the 2030s,” the report said. It insisted that Poland’s coal sector and the government thus have a short but important window of opportunity to begin preparing for this “lignite transition”.
As for Germany, the report finds that a strong carbon price would be the most appropriate tool to phase out coal.
Several additional policy instruments are discussed, it also underlined, which can lead to a phasing out of the ageing coal fleet, and a reduction of the full-load hours of newer plants.
“Accompanying structural policies can learn from the existing experience of previous phase-outs. Structural support should here be directed not towards coal companies but towards the most affected regions to create new opportunities for sustainable long-term employment and economic development.
Speaking at the Petersberg Climate Dialogue in Berlin last June, Samantha Smith of the International Trade Union Confederation (ITUC), said Germany’s newly set-up coal exit commission could be a model for other countries on how to bring down greenhouse gas emissions and deal with the economic consequences in affected regions at the same time.
Closing plants financially more competitive
Adding fuel to the argumentation, a report also published on Wednesday by the Institute for Energy Economics and Financial Analysis (IEEFA) argues that the French multinational energy company Engie would be better off closing its three coal-fired plants in Germany than selling them.
Gerard Wynn, an IEEFA energy finance consultant who co-authored the report with Paolo Coghe, president of Paris-based think tank Acousmatics, sees Engie best protecting its position in the German electricity generation market by closing the plants and replacing them with other forms of generation that include renewables.
“Such a move would also be in line with the company’s commitment to a low-carbon energy transition. And closure of the plants would serve as a signal that Engie is “part of the solution” to a coal power phaseout being pursued as a matter of public policy in Germany, rather than creating a problem by selling to distressed asset buyers determined to keep them open,” they insisted.
Engie is currently working on selling the three plants—Farge, Wilhelmshaven and Zolling—and the report identifies two of the likeliest buyers: Czech distressed asset specialists EPH and Seven Energy Group.