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Coal mine approval sends UK green credentials up in smoke

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Here’s an example of how net zero offsetting shouldn’t work: following up an announcement about onshore wind farm liberalisation with one approving the UK’s first new coal mine for 30 years.

Coal has reached something approaching climate pariah status. Metallurgical (or coking) coal of the type to be mined at Whitehaven may not be as untouchable as the thermal kind but, as commodities analyst Colin Hamilton of BMO put it earlier this year, “anything which contributes to carbon entering the atmosphere faces inherent challenges”.

It seems the UK government takes a different view. But the arguments do not add up.

The government says the coal will be used for the production of steel and would otherwise need to be imported. The problem with this is that it represents what Tim Buckley of the Climate Energy Finance think-tank calls the drug pusher’s argument: if it’s not our coal, it will be someone else’s.

Even then it seems the new British coal won’t in fact be used for the production of British steel, or at least not much of it. The sulphur content is apparently too high for British Steel, while the expected lifespan of the blast furnaces at Tata Steel’s Port Talbot works limit its likely demand for coking coal to perhaps little more than a decade. A security of supply argument just doesn’t stack up.

Put that aside and accept that most of the coal is destined for the export market, as the government’s decision approving the project acknowledges. The arguments in favour of the mine do not look any better.

Without domestic customers, the new mine is in essence a gamble against the speed of the transition away from coking coal to green steel processes at a time when both countries and companies are ploughing funds into decarbonisation technologies.

Steelmakers could, in theory, decarbonise by combining traditional blast furnaces with carbon capture and storage technology and keep using coal. But, says Chris McDonald of the Materials Processing Institute, that isn’t the decision European steelmakers are making. Instead they are opting for electric arc furnaces and using natural gas as a transition fuel while they wait for the expected commercialisation of green hydrogen technology.

That could leave the UK in the awkward situation of exporting to laggard countries that it has been pushing to clean up on climate change and emissions — if, that is, the global market has need of the UK’s coking coal at all. The International Energy Agency’s world outlook this year estimated production could fall roughly 30 per cent by 2050 based on prevailing climate policies, or more than double that if countries get their acts together and follow through on pledges.

The correct response to that uncertainty is not to opt for more fossil fuel production when it conflicts with the UK’s wider positioning on climate change. It should be taking the more conservative view on fossil fuel production, not the more aggressive one.

About the only argument in favour of the Whitehaven mine in Cumbria is the 500 new jobs it would create for a community that desperately needs them. But even this is not a strong one: the jobs are in a declining industry where the transferable skills are debatable. It would be far better if the government focused instead on training people for green jobs where there are skills shortages.

A better approach to UK steel policy would be for the government to listen to what the industry wants and then work towards delivering it. That is not domestically sourced coal, it is subsidies to support decarbonisation. Tata Steel had been seeking £1.5bn from government towards scrapping its blast furnaces and substituting electric arc ones instead, before talks appeared to stall earlier this year.

Without some sort of support, the chances are the UK’s steel industry will wither, along with its jobs. A new coal mine will be neither here nor there. In the meantime, the UK’s climate credentials will have gone up in smoke.

cat.rutterpooley@ft.com
@catrutterpooley

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