Watchdog rules Peabody ‘clean coal’ ad misleading

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The UK’s Advertising Standards Authority (ASA) has ruled that an advertisement for “clean coal” by the world’s largest private sector coal firm, Peabody Energy, was misleading and should not be published again in its current form.

The advert, published in the Financial Times, under the banner headline ‘Lets brighten the many faces of energy poverty’ advocated use of what it called ‘clean coal’ as a way of curbing energy inequalities in the developing world, where the company has targeted its growth strategy.

But the ASA found that “without further information, and particularly when followed by another reference to ‘clean, modern energy’, consumers were likely to interpret the word ‘clean’ as an absolute claim meaning that “clean coal” processes did not produce CO2 or other emissions.”

“We therefore concluded that the ad was misleading,” said the body’s ruling, which will be published today (20 August)

The original complaint by the WWF, which EURACTIV first revealed in May, also challenged the ad’s claims that “energy poverty is the world’s number one human and environmental crisis” and that Peabody was working to remedy this.

But on these, the ASA ruled that consumers would appreciate the first point was a statement of the company’s belief, and the second was a good-faith iteration of Peabody’s intent.  

Even so, the WWF European Policy Office director professed himself “delighted” with the outcome of the case.

“Companies trading and selling polluting energies have a responsibility to be open and honest about their activities and products,” said Tony Long.” The last thing they should be doing is trying to claim spurious environmental benefits from coal consumption. This merely damages the already tarnished reputation of a struggling sector.”

Peabody, which has lobbied fiercely in the US against EPA limits on CO2 pollution, argues that CO2 emissions may help the environment by driving up crop production, and that biomass is anyway a dirtier form of energy than coal. 

A company statement issued after the ruling said that its stand had been vindicated by the ASA’s rejection of “false advertising claims by WWF”.

“The company believes that access to clean, modern energy from coal is as basic as food, water or shelter, enabling a high standard of living and helping people live longer and better,” said Peabody’s CEO, Gregory H. Boyce.

Changing the global conversation

The firm has previously described its ad campaign as being “aimed at changing the global conversation to focus on energy poverty,” and critics locate this in a strategic tilt by the company to the Asia-Pacific nations, where demand for new coal plants remains strong.

In 2010, Boyce, spoke of  “a long-term supercycle for coal,” centred on the region which the company was “uniquely positioned to capitalise on.” 

“Peabody is poised for significant valuation growth from rising earnings and multiples,” he said.

The supply-side of this growth is unlikely to come from Europe, where a long-term trend away from coal production is underway.

However, the British government is lobbying the European Commission to keep open one of Europe’s dirtiest coal plants in Aberthaw The Guardian reports, even though it breaches nitrogen oxide emissions limits by a factor of five.

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