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Friday, 30 March 18
EXPLAINING POLAND'S COAL PARADOX - FORBES
 In the U.S. coal is succumbing to market forces despite the Trump Administration’s push to support the industry. Abundant, cheap and cleaner natural gas together with ever more efficient and increasingly affordable wind and solar continue displacing coal in electricity generation. But to assume this is the general worldwide trend would be a serious mistake. In fact, even in the heart of “renewable-friendly” Europe, coal is and most likely will continue to be a fuel of choice. Despite coal’s obvious shortcomings that include high CO2 content and local air pollutants, Poland projects that in 2050 coal will still constitute 50% of its energy mix. The strong commitment to coal expressed most recently in the government’s program for the hard coal sector, is driven by host of factors that include social, electoral and policy considerations. As a general statement, it is important to understand the powerful role these factors play in the fuel mix across different countries.
Currently, Poland tops the EU list of biggest coal energy producers, and coal continues to dominate the energy mix in Poland (50%), accounting for a whopping 80% of electricity generation. Going forward, the country is looking into expanding coal production through investment in multiple new mines, including those producing lignite. These plans correspond with power-generation and district heating investments in new plants or expansion of existing facilities.
At the same time, Poland has been behind the EU schedule in implementing the mandated share of renewables energy sources (RES) in the Polish energy mix. The government has also been visibly slow with implementing the 2015 law on renewable energy sources, which in contrast to many EU countries, includes coal as part of the renewable energy mix via coal-biomass based cogeneration.
On the surface, the Polish government’s strong commitment to coal is removed from the realities of the current EU policy direction and market conditions. It goes against the trends in most OECD countries where a less-CO2 intensive energy mix includes increases in RES and natural gas while phasing out coal. Additionally, by pursuing coal Poland opens itself to disputes with the EU that can include substantial monetary fines. Moreover, Polish policy seems to contradict the government’s recent commitment to fight high levels of smog in many cities.
However, a deeper dive reveals that the pervasive use of coal in Poland cannot be explained in strictly environmental or market terms, or even in reference to the EU policy direction.
Coal takes a special place not only in Poland’s energy mix but also in the nation’s collective heart. The coal industry has been traditionally revered, if not romanticized, and much of this continues today. As reported by Poland’s Public Opinion Research Center (CBOS) in 2016, miners in Poland are respected at levels (82%) comparable to university professors (80%) and more than medical doctors (74%) or teachers (71%).
Miners have also enjoyed high salaries and pensions, often several times higher than the national average. In addition, they are highly organized within politically influential trade unions. The government is well aware that any decision that endangers the future of mining will meet with substantial protest, as exemplified by the events of 2015 when miners threatened to end the government of Ewa Kopacz, then Polish Prime Minister. A new law to restructure Poland’s largest mining company was met with widespread protests by miners and their unions, who saw the law as a prelude to the closing of four mines in the Upper Silesia region. Negotiations that ensued resulted in the government’s strong commitment to keeping all mines open, effectively assuring the mining jobs that could have otherwise been eliminated.
Thus, any policy that could potentially limit coal and negatively affect mining jobs can have immediate negative consequences for the incumbent government as well as serious electoral implications. There are 55 seats (out of 460 seats) in the Sejm (the lower chamber of the parliament) and 13 (out of 100) in Senate (the upper chamber of the parliament elected in Upper Silesia – the region historically known as “the kingdom of black coal.” Additional “coal” seats are dispersed around the country where lignite is mined. When compared to prospective EU disputes and/or fines, electoral and public support considerations are more immediate and can directly affect chances of survival for any incumbent government.
Intertwined with socio-political consideration is the second major issue that explains coal’s strong position and commitment to coal going forward – energy security. In Poland, the concept of energy security is viewed predominantly as low dependence on Russia, and it is at the top of government and general public priorities. Domestically available coal offers predictability and peace of mind at a time when renewable energy is still at the very beginning of its development, a potential nuclear power plant is still in discussion stages, and the majority of natural gas consumed in Poland needs to be imported from abroad, primarily from Russia.
Recognizing the geopolitical consequences of dependence on Russian gas, Poland has diversified its pool of natural gas providers, thanks to the newly built LNG terminal in Swinoujscie. But, LNG imports are intended to back out Russian gas rather then provide substitute for coal; so they are unlikely to push out coal in the same manner domestically available natural gas has in the US. In fact, part of the planned expansion of LNG imports into Poland is designed to capitalize on Poland becoming a hub for LNG distribution to other European countries.
Coal policy is a difficult balancing act for Poland. It needs to take into account immediate electoral, social and energy security considerations as well as the country’s commitments as a member of the EU. Poland receives substantial EU subsidies, including €27.4 billion for the Program on Infrastructure and Environment that stresses low-emission economy and environmental protection in addition to infrastructure development and energy security. Those funds could potentially be at risk going forward if Poland does not live up to its stated RES and emissions obligations.
The situation is also difficult for the EU more generally, as it highlights the tensions and different priorities between “high income Western Europe” and “middle income Central and Eastern Europe”. To be truly successful the EU has to understand the heterogeneous needs and priorities of its members. Strict RES development goals not adjusted to local needs, combined with potential fines and reprimands for noncompliance are unlikely to achieve the climate and decarbonization goals the EU has established. Instead rigid rules could push countries like Poland where government’s skepticism towards the EU is already high, toward a non-EU future. The issue seems to have been considered by the EU, which has recently committed €1.25 billion ($1.55 billion) to assist the Polish government with mine closures that could address some of the hardships such closures could have for the affected population. One might suspect substantive help provided to coal-dependent regions – including re-training and unemployment compensation – could alleviate some of the social and electoral considerations. Also, support toward less carbon-intensive energy sources that could be developed domestically – such as biogas – could facilitate a less coal-intensive future. Lastly, research toward and potential development of capture and storage solutions and/or coal gasification could accommodate some of Poland’s reliance on coal while minimizing its negative externalities, such as CO2 emissions and smog.
Source: Forbes
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Monday, 28 May 18
KOMIPO ISSUED ANOTHER TENDER FOR 130K MT OF 5700 NAR COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 130,000 mt of min. 5700 NAR coal of Australian origi ...
Thursday, 24 May 18
SUPRAS FIXING AROUND USD 15000 FOR INDO TO CHINA COAL TRIPS - FEARNLEYS
Capesize
Both the physical and the paper market have dropped sharply the last couple of days on the back of a lack of fresh cargoes and a growing ...
Thursday, 24 May 18
FITCH: FALLING COAL INVESTMENT TO SUPPORT ASIAN PRICES
Press Release: The long-term outlook for the Asian thermal coal prices is improving, amid rising regional demand and falling mining investment, whi ...
Thursday, 24 May 18
BEIJING ORDERS UTILITIES, MINERS TO HELP COOL RED-HOT COAL MARKET: SOURCES - REUTERS
China’s state planner ordered utilities this week to stop stockpiling thermal coal and told miners to slash prices, two sources familiar with ...
Wednesday, 23 May 18
TANKER MARKET INSIGHT - TIMOS PAPADIMITRIOU
In the last six months we have seen more than 110 reported tanker transactions involving tonnage larger than 32k dwt and younger than 18 years old. ...
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- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- White Energy Company Limited
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Economic Council, Georgia
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
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