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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, 07 March 18
WHEN AN IRRESISTIBLE FORCE MEETS AN IMMOVABLE OBJECT - GARD
KNOWLEDGE TO ELEVATE
Negotiable bills of lading are fundamental to trade. As documents of title, they are essential to the sale and carriage o ...
Wednesday, 07 March 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
The comparably small upside Handysize asset values have noted compared to other sizes since the historical lows of the dry bulk market in combinati ...
Tuesday, 06 March 18
FOREIGN INVESTORS ALLOWED TO BID FOR BIG MINING CONCESSIONS - THE JAKARTA POST
The government has allowed foreign investors to bid for mining concessions with a total area of more than 500 hectares, while smaller areas will be ...
Tuesday, 06 March 18
LNG VESSELS HAVE EMERGED AS THE FASTEST GROWING SEGMENT FOR THE WATERWAY - GERRY LATHROP
The day was July 25th 2016, a partly cloudy day on the Panama canal, and to most people a rather innocuous day without any real merit, however in s ...
Friday, 02 March 18
ANGLO AMERICAN COMPLETES SALE OF ESKOM-TIED THERMAL COAL OPERATIONS IN SOUTH AFRICA
Anglo American plc (“Anglo American”) confirms completion of the sale of its Eskom-tied domestic thermal coal operations in South Afric ...
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- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
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