The COP26 statement to phase out coal by 2030 for advanced economies was signed by 190 countries.
While Australia was not a signatory, the pressure is building on its coal sector which feeds the state’s electricity generation and is a major contributor to the economy through its coking coal exports.
Coal is already threatened by Rio’s previous breakthrough in replacing the commodity with biofuels and the early days of hydrogen use in Europe, which also replaces coking coal.
But Nationals senator Matt Canavan told InQueensland the idea of the end of coal was “insane”.
“Fortunately, it won’t happen because the major coal producing countries like Australia and China and the US are not signatories. If it did it would consign hundreds of millions of people to poverty because coal is the only reliable way of producing electricity,” Canavan said.
Rio also announced overnight that carbon-free aluminium smelting was a step closer with a Canadian project producing the metal without any direct greenhouse emissions.
The technology is still in its early days and the Canadian operations use hydro rather than coal. There are as yet no plans to introduce the process to its Australian smelters, such as the Boyne smelter in Gladstone.
However, Rio, which is Queensland’s biggest energy user, is also planning to help underwrite renewable energy in central Queensland while another major user, the Korea Zinc Sun Metals project in Townsville, is also transitioning to renewables and hydrogen.
China, Japan and Korea, the three largest public financiers of coal, have also announced an end overseas financing for coal generation by the end of 2021 and US bank BNY Mellon said it had pulled out of funding Adani’s Carmichael coal mine in central Queensland.
Reports in London’s Financial Times said the Australian subsidiary of US bank BNY Mellon, BTA Institutional Services, was preparing to finance Carmichael, however following media exposure of the potential deal it said it no longer intended to provide services to Adani in Australia.
Adani’s mining subisidiary Bravus said Carmichael was on track for first exports this year, but it would not comment on commercial arrangements.
Carbon Market Inistitute’s John Connor said the end of coal was not going to happen overnight but the demand side of the industry was clearly diminishing.
“The demand side is blowing up. It’s clear we are seeing more and more commitments to phase out coal so I think it’s significant that we are seeing more than people making clean investments, they are making de-browning investments,’’ Connor said.
He pointed to the $US8.5 billion commitment from the European Union, the UK and the US to help South Africa transition away from coal.
The Minerals Council chief executive Tania Constable said there was strong export demand for high quality Australian thermal and metallurgical coal based on traditional markets and the many new power plants and steel mills built this century in the Asian region.
“To achieve net zero emissions there must be a continued focus on developing and deploying all technologies including carbon capture and storage in countries using thermal coal and gas for power generation, as well as for the production of hydrogen from coal and gas sources,” she said.
“The MCA supports the Paris Agreement and is working towards real climate change action and an ambition of achieving net zero emissions by 2050.”