The coal industry is not going down without a fight.
One of the largest contributors to climate change by sector is ramping up efforts to change what it calls the negative narratives driving the rising pressure to end carbon-intensive fossil fuels across the globe.
This comes just as G20 environment ministers ended a critical meeting last week with more questions than answers on the future of coal in a world desperately trying to slow down global warming.
Ahead of the meeting, the UN Framework Convention on Climate Change warned that stopping further rises in global temperature was impossible without the buy-in of the G20, an intergovernmental forum comprising 19 countries and the EU.
“The G20 accounts for 80% of all global emissions. There is no path to 1.5°C without the G20,” said Patricia Espinosa, the UN body’s executive secretary.
The communiqué fell short of expectations from UN agencies and activist groups, because it gave no indication of a plan to phase out coal and end fossil-fuel finance, in line with scientific recommendations. Scientists have warned that a failure to do so will affect the world’s most vulnerable people by 2030 — and generations thereafter.
South Africa is the 14-largest carbon emitter in the world, owing to its reliance on coal-fired power. Its energy master plan will see coal decline to about 43% of the country’s energy mix by 2030, from over 80% at present. As things stand, new research has found that South Africa relies on coal more than any other country in the world — gaining only 7% of its energy from renewable sources.
The study by energy tariff comparison platform Utility Bidder shows which countries rely the most on fossil fuels (coal, oil and natural gas), renewable energy (hydroelectricity, biofuels and waste, and wind and solar) and nuclear energy. South Africa ranked third-highest for its share of fossil fuels, after Singapore and Australia.
Global coal-industry bodies are expected to prioritise discussions on coal’s future in South Africa, despite the risks posed by fossil-fuel assets in the present and future.
Coal lobby intensifies
But Minerals Council South Africa told attendees at the Joburg Indaba’s “coal day” on Tuesday that the sector remained crucial to the domestic economy.
“Ninety percent of SA’s electricity supply is derived from coal; 30% of liquid fuels are derived from coal; and the coal sector is the second-largest sector by sales value, and the third-largest employer,” Minerals Council chief executive Roger Baxter said.
“While we understand the criticality of the just energy transition, this must be done sensibly in the best interest of South Africa’s economy.”
The World Coal Association opened Tuesday’s virtual coal conference by taking a swipe at anti-coal activists and their “rhetoric”.
“We need the industry to speak up on behalf of coal. The mature, unemotional position needs to get louder. We call it raising the coal IQ,” the World Coal Association’s Michelle Manook told delegates during an opening address, saying she did not believe the industry would die.
“But if it doesn’t transform through technology and modernisation — I do not believe it can thrive,” she said.
Manook called on industry leaders to be potent and to “earn back the respect of the world”, adding: “The potency and longevity of the industry depends on our self belief and cohesion. We must stand together and declare that the industry is not dead.”
“Clean” and “green” coal technologies were punted as the future of the industry that seems determined to continue, even as countries move towards sustainable, clean energy. Experts have warned that clean coal is not as clean as it is made out to be, and that carbon storage and capture technologies cost a fortune.
“There are commercially available technologies. which will allow coal to participate on a net-zero pathway. The IEA [International Energy Agency] acknowledges the role of CCS [carbon capture and storage] in decarbonisation. However, policy support has been sporadic,” Manook told delegates.
Analyst and energy expert in the automotive sector, Mpumelelo Mdhladhla, told the Mail & Guardian he believed that the conversation around fossil fuels and renewable energy was polarising.
“One does not have to exist at the expense of the other; to ensure energy security there must be a balance. Unfortunately, globally fossil fuels vs renewable energy is being politicised; this creates policy uncertainty when the energy sector players do not speak with one voice,” he said.
When asked about damning scientific findings on the effects of current emissions on future warming, Mdhladhla said: “What is needed for climate change must be managed carefully so that the post-Covid-19 recovery is not impacted.”
Workers in mining communities in areas such Mpumalanga, where coal-fired power stations will be decommissioned, should be reskilled along the entire value chain of emerging sectors in the energy transition, in which there are opportunities to absorb large numbers of workers, he added.
“They must be retrained so that they can participate in the energy transition programme,” Mdhladhla said, adding that the just energy transition currently being executed was a balance between energy security and climate change. “So as long as it aligns to the IRP [Integrated Resource Plan] and climate commitments; if they are able to do this [with]in the confines of that and strike a balance, then I don’t see anything wrong,” he said.
Sasol, one of Africa’s largest greenhouse gas emitters, told Tuesday’s audience that coal would remain part of its business for the next two decades.
“We are continuing with coal — we aren’t climate change denialists; we are looking at reducing our CO2 emissions in a responsible way — but coal will still play a role in our energy mix for the next two decades,” said Lucky Kgatle on behalf of the petrochemical giant.
Sasol’s 2020 climate change report, however, states that the company will move away from coal as a primary feedstock after 2030, and that it is working on its long-term strategy to have net-zero emissions by 2050.
Kgatle’s comments were supported by Thungela Resources’ July Ndlovu, who said that the energy transition was not simply about replacing one energy source with another.
“It doesn’t take into account the employees in the coal industry and the downstream value chain and the communities who are dependent on this industry,” he said.
Global coal demand declined 4% in 2020, the biggest drop since World War II, according to the IEA, but that was mostly as a result of reduced energy demand amid pandemic lockdowns.
Tuesday’s comments at the coal industry day come after the presidential climate commission released its report outlining that South Africa is better off accelerating the phasing out of coal and ramping up renewable energy uptake to create jobs and avoid transition risks intensifying at a later stage.
State power utility Eskom’s Sandile Siyaya said three of the oldest power stations (Komati, Grootvlei and Hendrina) would close in the next five years. “We are developing mitigation strategies to look after impacted communities and employees,” he said.
Labour federation Cosatu’s Lebogang Mulaisi said the energy transition was already happening “and we need to embed the justice element, that is, the imperative of leaving no one behind”.
The power utility signed an agreement with the Agence Française de Développement securing a financial commitment to Eskom’s energy transition programme in areas such as Bethal, Mpumalanga where the Komati power station is located.
“The Komati power station is amongst those in Eskom’s fleet of older power stations that we hope to use to light up a much brighter and more sustainable future under the just energy transition strategy. In this brighter and more sustainable future of electricity generation,” Eskom chief executive André De Ruyter said in response to France’s commitment.
The Paris climate accord makes provision for international climate finance that supports efforts to make the transition away from coal inclusive. In the context of South Africa, this means that it must flow to social justice initiatives in the communities reliant on the coal sector.
The power stations destined for decommissioning over the next five years will be a litmus test for South Africa’s ability to provide social security to communities affected by the anticipated end of coal by mid-century.
Meanwhile, public consultations to finalise a strategy for this transition are set to get underway on Friday 30 July when the president’s climate change co-ordinating commission convenes virtually.
Tunicia Phillips is an Adamela Trust environmental justice reporter sponsored by the Open Society Foundation.