Guest blogger Simon Roz, Climate and Energy Campaigner, Greenpeace writes:
We’re hearing a lot of noise from the Coal industry that they are being treated “unfairly” – the latest from Australian Coal Association’s Chief Ralph Hillman . But is this really a sign that the decades long free pass they have been handed may be coming to a close?
The Australian reported last week that Greg Combet, as the new Parliamentary Secretary for Climate Change, is standing up to intense lobbying by the coal industry for compensation under the Carbon Pollution Reduction Scheme. The Coal Industry has been furiously lobbying back-benchers, Ministers and running scare pieces in the media that it will shed tens of thousands of jobs under the CPRS if it isn’t compensated.
Most people however would understand that it’s the downturn in the global economy that will be responsible for job cuts, not a few percent increase in costs under the “nobody really pays” CPRS.
But here’s the rub. The Coal Industry is seeking compensation because, they claim, they are ‘trade exposed’. The rationale for compensation for the trade exposed sector is that those industries will leak overseas, because identical goods will be cheaper to produce overseas. Is the Australian Coal Industry claiming, under the ‘trade exposed’ umbrella, that it will move offshore unless it is compensated?
For years we’ve been hearing that Australian coal is such top quality gear, that we’d in fact be helping reduce global warming by exporting the stuff to developing countries. Australian coal, we’re told, is cleaner. What ‘cleaner’ actually means is that our coal has lower particulate and sulphur emissions. That’s why we’re planning to double our exports – to help.
Yet it still has the same greenhouse gas intensity as overseas coal.
Australian coal has some competitive advantage over some other coals, with which it competes. It doesn’t make people that live near coal power plants sick as quickly, nor does it produce as much acid rain. As reported last week the impost to Australians health and other climate costs is conservatively put at $2.6 billion annually. Aussie coal has ‘less’ nasty side effects, not ‘no’ nasty side effects.
The Coal Industry is many things, but it is not a trade exposed industry, and doesn’t deserve any more compensation, favourable tax schemes or subsidies than it already receives. In fact, its subsidies should be wound back, not increased.
2 Comments
The issue for coal mines is fugitive methane emissions. Under ETS the mines only liable for the emissions they produce, not the emissions that will be produced down stream.
Many coal mines have low fugitive emissions. A handful (20-30) have high emissions (0.3 tonnes of CO2e per tonne of coal) these account for a few percent of australia’s total.
Export thermal coal is selling for about $70 US per tonne. ETS raises the production cost of some mines by $6AU or so per tonne.
The industry is trade exposed and the profit margins will be trimmed, however I don’t think they would be forced to close and only those high fugitive emissions mines are strongly affected.
Thanks EnergyPedant for that. I never understood why the coal miners (as opposed to the coal-fired power stations) should suffer directly from the CPRS/ETS since as you say all the emissions are by their customers downstream. I don’t think this is widely appreciated. But another point is that less than 25% of coal mined in Australia is used in Australia so any Australian CPRS has a much smaller effect than the miners are bleating about. In the context of about 50% drop in export price of coal and 35% drop in the exchange rate, the CPRS is square root of stuff all, at least in short to medium term (and, as they say, in the long term we are all dead–probably from climate change!).