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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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Wednesday, 18 April 18
SHIPPING MARKET INSIGHT - STELIOS KOLLINTZAS
The return of traders and charterers from the Easter festivities came along with a slight increase in activity across the edible oil markets. Howev ...
Monday, 16 April 18
MINISTER IGNASIUS JONAN SPEAKS HIS MIND AT INDONESIA MINER - IAN WOLLFF
The Minister for Energy and Mineral resources, Ignasius Jonan, delivered a key note address at the Indonesia Miner conference in Jakarta on the 11 ...
Thursday, 12 April 18
THE PERFECT STORM FOR THE BIG SHIPS - THE BALTIC BRIEFING
Capesize
The perfect storm for the big ships: with holidays, force majeure in two ore exporting ports and bad weather undermining the market. A l ...
Thursday, 12 April 18
SHIPPING CAN MANAGE US-CHINA TARIFFS, BUT RISKS RISING - FITCH
Container and, to some extent, dry bulk would probably be the shipping segments most affected by the recently announced US and China tariffs, Fitch ...
Thursday, 12 April 18
SUPRAS HAVE FIXED MID $11K FOR AN INDO RV TO S. CHINA DELIVERY PHILIPPINES - FEARNLEYS
Supramax
Slow week with little light for improving rates. ECSA to Far East still around $15k + bb and same to Med ca $14k, says Fearnleys in its ...
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- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- The University of Queensland
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
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