Column: Europe’s climate credentials sullied by coal import binge

LITTLETON, Colo., Sept 12 (Reuters) – Europe’s hard-earned climate champion credentials are being tarnished after it boosted thermal coal imports by more than any other region in the first eight months of 2022.

The Continent was the only region to increase coal imports from January through August compared with the same slot in 2021, bringing in 35.5% or 15 million tonnes more of the power generation fuel, according to data from Kpler.

The 57.3 million tonnes of thermal coal tracked by Kpler into Europe through August accounted for 9.5% of global thermal imports during that period, and was Europe’s highest total and share of coal trade for that slot since 2018.

After Russia’s invasion of Ukraine in February disrupted natural gas and fuel shipments from that region, an urgent reshuffling of energy imports by European utilities was inevitable.

Even so, the increased purchases reverses a years-long decline in European coal imports, and potentially undermines efforts made over the past decade to establish Europe as a renewable energy leader and serious advocate for cutting coal use.

Since 2010, scores of coal plants have been retired across Europe and elsewhere amid an intensifying backlash against dirty fuels and a broad adoption of lower-emitting energy sources that can help combat climate change.

Over the same period, Europe spent big on green energy installations, and increased the share of electricity generated from renewable sources by roughly 15 percentage points to nearly 38% – second only to Latin America, according to Enerdata.

The region has also set some of the world’s boldest renewable energy usage targets, including a goal of having 32% of total energy consumption – which includes transportation, households and industry – from renewable sources by 2030.

Much of that momentum has now been checked by the fallout from the Russia-Ukraine war, which has sent gas and coal prices soaring and hammered government coffers that were already ravaged by the costs of COVID-19. read more

With dozens of European utilities buckling under a liquidity squeeze, many power fuel buyers have been forced to deploy emergency measures to cut costs, including switching to lower cost coal. read more

But in doing so, those purchasers have rolled the clock back on key climate-related metrics, and jeopardised Europe’s status as a leader on emissions reduction policies and technologies.

HARSH LESSONS FOR, AND FROM, GERMANY

As Europe’s largest economy, main industrial engine and top consumer of Russian gas, Germany has been closely watched since the Russia-Ukraine conflagration kicked off for signs of how Europe as a whole may fair from Russia’s alienation as a trade partner.

Germany’s actions in the coal market are also an effective proxy for Europe’s this year. The country’s rise in thermal imports matched Europe’s overall 35% jump, and the peak in German coal purchases in April and May overlapped Europe’s.

Further, Germany’s adjusted supplier base also reflected that of broader Europe.

Due to pressure to shun Russian energy products, Germany was forced to source coal from far-flung origins including Colombia and South Africa, which not only added to buyer costs but also exacted an environmental toll through supply lines that stretched up to eight times longer than from northern Russia, which formerly supplied 75% of Germany’s seaborne coal.

Even so, those imports were not enough to rein in Germany’s power costs, which are currently more than ten times the 2017-2020 average, shredding household and manufacturer budgets alike. read more

What’s more, Germany’s greater use of coal-fired power is already worsening the country’s air quality, with air pollution levels climbing across several industrial areas that still run coal power stations.

Those conditions may only worsen as winter approaches and still more coal will be burned for power just as gas supplies from Russia further diminish.

With no prospect for a resumption in normal trade with Russia any time soon, German and other European industries will continue to face a tight and historically expensive gas market that will require them to burn more coal or reduce output rates, and in many cases do both.

That in turn will place European policymakers in the tough position of having to prioritise economic stability over environmental ambitions, which may further diminish Europe’s standing in climate circles and make environment advocates look elsewhere for a new champion.

The opinions expressed here are those of the author, a columnist for Reuters.