Studiously Avoiding the Trend Toward a New Energy Economy
We’re seeing an increasing number of boastful assertions by Australian politicians that Australian coal is environmentally friendlier than other coal.
It’s not true—and we’ve published a fact sheet here that gets into the weeds of it—but one illuminating comparison can be found when you stack Australian benchmark thermal coal up next to coal from Indonesia, the world’s largest exporter of thermal coal. Australian thermal coal is higher in energy content, true, but its ash content is double Indonesia’s export-coal average.
Further to this point, Australia has historically developed its best coal resources first, such that the average quality of coal from new mines being proposed is declining with time. As a result, the Australian benchmark for coal is gradually giving way to a lower-quality, secondary benchmark, one that produces 10 percent less energy and almost twice the ash.
Adani’s proposed Carmichael mine, which would purportedly supply India, would produce coal only about 10 percent better than the average quality of domestic Indian thermal coal in terms of energy content. This comparison doesn’t take into consideration the environmental costs of transporting Australian coal to Indian ports. And Carmichael coal if compared to Russian, Indonesian or South African export coal is relatively “low energy, high ash.”
For countries truly seeking to limit the harmful effects of coal-fired power generation pollution, tighter emissions limits are key, a truth that is being embraced by nations as disparate as the U.S. and China.
China has required all coal-fired power plants to be retrofitted with emissions reduction technologies over the past four years. The U.S. EPA this year established expanded new rules on coal-plant emissions.
Australia has studiously avoided similar initiatives—damaging its global standing and putting its own long-term economic health at risk. The fact is, Australia has the most emissions-intensive coal-fired power generation fleet in the world, worse even than India’s, and it’s nothing to brag about.
Tim Buckley is IEEFA’s director of energy finance studies, Australasia.