December 18, 2017 / 3:26 PM / in a year

British coal still burning abroad despite push for global ban

LONDON (Reuters) - Britain led calls for an end to coal-fired power generation at United Nations climate talks in Bonn last month but at the same time British companies are active in coal projects around the world, often with government help.

In Britain, the use of coal in electricity generation has declined sharply since the introduction of a carbon tax in 2013, although the country remains a center of coal-mining expertise.

Many in the mining industry see no contradiction. They say coal remains the best option in some countries and it would be hypocritical for the developed world to deny emerging economies the power they need.

There is however a clash with the words of the British climate minister, who said the world needed to stop burning coal to meet U.N. targets to slow climate change.

For a graphic on coal futures prices, click tmsnrt.rs/2CjBjqH

Britain led an international alliance to phase out coal from power generation in the EU and developed countries by 2030 and by 2050 worldwide at U.N. talks in Bonn on implementing the Paris agreement on climate change.

It also announced programs worth more than 300 million pounds ($400 million) to help developing countries tackle climate change.

At home, Britain plans to phase out coal power plants by 2025, unless they have technology to capture and store emissions.

“The biggest thing the world can do is stop burning coal. That is the biggest, number one thing we need to do to try to meet the Paris Agreement targets,” British climate minister Claire Perry said following the Bonn talks.

Coal-fired power stations emit around twice as much carbon dioxide, blamed for global warming, as gas generation, while nuclear and renewable energy produce electricity without emissions.

Asked if there was any contradiction between calling for a global phase-out and encouraging exports to supply the coal industry abroad, a government spokesman said Britain adhered to a 2015 international deal that bars financial help for exporters of equipment to heavily polluting coal operations.

EXPORTING IS GREAT

That deal, agreed by members of the Organisation for Economic Co-operation and Development (OECD), does not prevent other forms of support, which is part of the work of the British government’s Department for International Trade (DIT).

The DIT gives no direct funding, but takes part in overseas mining events, such as conferences, provides information on projects, builds contacts and administers advice.

Its website, Exporting is Great, advertises tenders, which this month include one for 10,000 tonnes of coking coal sought by an Indian company, a feasibility and pilot study and pilot project for expertise in underground coal gasification, also in India, and a firm in Kazakhstan seeking coal processing technology.

BRITAIN MINES AT HOME

In Britain, where the last deep pit coal mine closed in 2015, surface mining continues.

The Banks Group works open cast pits in northern England, supplying Britain and Spain. It hopes to open a new pit at Druridge Bay on the North Sea coast next year.

Jeannie Kielty, the firm’s community relations manager, said there was a need for “high-quality jobs that enable many dozens of local people to put food on their families’ tables”.

Coal prices are up around 40 percent in Europe this year. Britain’s coal exports rose 15 percent in 2016 to 443,000 tonnes, worth 50 million pounds ($67 million) at current prices. Exports are expected to rise further this year after a 22 percent increase in the first half.

NEED FOR POWER

Mining companies say coal can be a force for economic good and the alternatives can be worse as remote communities cannot develop without reliable power.

“These are places where people have no access to energy and are burning charcoal, which has very damaging primary and secondary health effects,” said Louis Coetzee, CEO of Kibo Mining, which is developing coal and power in Tanzania and Botswana.

Britain’s Oracle Power is developing a $1.6 billion coal mine and power plant in Pakistan’s Thar desert.

“Eight years ago there was nothing to see at the site but camels and peacocks, now we are bringing power to a region where it is needed and opportunities for jobs,” CEO Shahrukh Khan said, estimating the project would create around 1,000 jobs.

It is the biggest private sector investment by a British company in Pakistan, Khan said. He said he had the blessing of the British government, but no financial help.

That is provided by China, which is working to reduce pollution at home, but is active in coal abroad. It did not join the November alliance on phasing out coal and is not in the OECD.

Chinese investment company SCIG and PowerChina, both state-owned, will arrange finance through Chinese banks.

How clean the plant will be remains to be seen. Khan said he wanted it to be toward the upper end of industry standards, but that depended on contractors and Chinese partners.

(For a graphic on coal futures prices, click tmsnrt.rs/2BEqVMK)

Editing by Giles Elgood

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