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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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Friday, 06 April 18
TOP MINER BHP QUITS WORLD COAL ASSOCIATION OVER CLIMATE CLASH - BLOOMBERG
BHP Billiton Ltd. has severed ties with the World Coal Association over a clash of views on how to combat climate change, with the mining giant say ...
Thursday, 05 April 18
INDONESIA TO POSTPONE NEW COAL, PALM OIL SHIPPING RULES TO 2020 - REUTERS
Indonesia will delay until 2020 trade rules requiring exporters of coal and crude palm oil to use only Indonesian-flagged vessels, government offic ...
Tuesday, 03 April 18
MARKET ANALYSIS - GEORGE LAZARIDIS
In the midst of a relatively quiet week for markets, with disruptions being caused by the Christian holidays, it seems as though we find ourselves ...
Monday, 02 April 18
THE FREIGHT RATES ARE EXPECTED TO BE FLAT TO SOFT, SAYS VISTAAR
The freight market softening to continue. Thursday, March 29, 2018, the Baltic Dry Index decreased by 42 points, reaching 1080 points.
T ...
Monday, 02 April 18
THIESS TO DELIVER $150M SENAKIN CONTRACT EXTENSION
Thiess has secured a $150 million contract extension to provide mine services at Arutmin’s Senakin coal mine in South Kalimantan, Indonesia.
...
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- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- White Energy Company Limited
- Heidelberg Cement - Germany
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- PTC India Limited - India
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
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