Foto: David Maurice Smith / Agence VU / laif

Troubling Addiction The World Is Failing To Rid Itself of Coal

It is the most CO2 intensive of all fuels and yet consumption of it is rising dramatically, regardless of the climate crisis. We’re burning coal like there is no tomorrow. Why is it proving so difficult to phase out?

The contradictions on this planet seem even more confusing these days than usual. In Glasgow, Scotland, around 25,000 politicians, activists and advisers are trying to figure out a way to save the global climate.

The meeting is taking place in a hall with a large globe hanging from the ceiling. Blue, green and majestic, it looks like the promise of a bright future. Speaking a the summit, outgoing German Chancellor Angela Merkel heralded a "decade of action.”

DER SPIEGEL 45/2021

The article you are reading originally appeared in German in issue 45/2021 (November 6th, 2021) of DER SPIEGEL.

SPIEGEL International

And then there’s this country road in China’s Inner Mongolia region near the city of Ordos, where coal dust blows in patterns on the asphalt as if it were snow. The powder coats the branches of the puny fir trees that stand at the edge of the road. It coats the trucks thundering through in black, one truck after another, dozens, hundreds. They load their freight at the coalfield that begins less than a five-minute drive past the city limits.

Five men are observing the flurry of activity beneath them on a spoil heap, buyers looking for coal. The men are a bit tight-lipped, unwilling to say anything about their client – only that they’ve traveled from Yan’an, more than 300 kilometers away. "We visited a few pits nearby yesterday,” one of them says, disappointed. "They don’t sell us coal. It’s all reserved for big companies.”

The men are feverishly trying to get their hands on coal – and they’re not the only ones. China can’t seem to get enough coal these days. Like many other countries, China is in the midst of an energy crisis. In its distress, it, too, is falling back on old habits – it is mining, importing and burning as much coal as it can. Even on the approach to Ordos, numerous open-pit mines can be seen from the air, perforating the earth’s surface in China’s second-most important coal producing region.

Coal is the most CO2-intensive of all fossil fuels, a relic from the early industrial era, a dark past. That’s also the view of environmentalists at COP26. They argue that the world needs to eliminate its reliance on coal as quickly as possible.

But actions speak louder than words, and rather than moving away from coal, use of the fossil fuel continues to grow. Since 2000, global consumption has increased by more than 60 percent. And the boom shows few signs of abating. Climate crisis or not, coal is being burned as if there was no tomorrow.

According to forecasts by the International Energy Agency (IEA), global consumption is expected to rise by 4.5 percent this year. That would more than make up for the 4-percent decline in the pandemic year of 2020. IEA also expects coal demand in China in 2021 to approach the historic record set in 2014.

The price of Australian standard coal (Newcastle coal) quintupled to $269 per ton between September 2020 and early October 2021. It has fallen since then, but it is still three times as expensive as it was 14 months ago.

Despite all the lip service about phasing it out by world leaders, coal is experiencing a breathtaking renaissance. And it has gone largely unnoticed by the public in many locations around the world. Some countries are moving as fast to burn more coal as others are to phase it out.

DER SPIEGEL correspondents traveled around the globe to take a closer look at the situation. To China, where a global giant is trying to change direction. To Poland, where coal is a source of national pride. To Germany, which views itself as a blueprint for phasing out coal, but it could just be an example for how expensive it can be to abandon it. And to South Africa, which would like to be a pioneer, but is struggling to rid itself of its addiction.

South Africa: A Minister for Climate Destruction

When a high-level delegation of climate policymakers from the United States, Germany and the United Kingdom traveled to South Africa in September to discuss how the country could phase out its use of coal, Energy and Mines Minister Gwede Mantashe had more important things to do. The minister instead chose to attend to family matters, leaving the group to Environment Minister Barbara Creecy and other cabinet colleagues. His absence was a clear message: South Africa will not allow others to dictate how it uses its resources. Not a single member of his ministry staff turned up.

South Africa is the world’s seventh-largest coal producer. The country produced 248 million tons of coal in 2020. A staggering 86 percent of South Africa’s energy needs are met by coal. It is the world’s 13th-biggest emitter of greenhouse gases and the largest on the African continent. But that hasn’t stopped German Development Minister Gerd Müller from seeking to transform South Africa into a model country for climate change – a wonderland of renewable energies. How, though, do those two things fit together?

The team traveled to Mpumalanga, the heartland of South African coal mining and coal-generated energy. The region is located in the northeast, not far from Kruger National Park. There’s a paucity of water here, and the air is yellow. Particulate dust blows over the fields and acidic wastewater contaminates the soil. Many nearby rivers and lakes are poisoned with heavy metals. Coal makes a lot of people sick here - on the one hand. On the other, though, it provides an income for tens of thousands.

Coal is to South Africa roughly what the automotive industry is to the Germans. It’s a major source of prosperity. Fully 91,459 people worked directly in the coal industry last year, and almost a half million jobs are dependent on the mining industry. This weighs heavily in a country that has more than 34 percent unemployment and high poverty.

And the government is, indeed, divided on the issue. In contrast to his energy minister, President Cyril Ramaphosa favors a faster transition to renewable energies. He revived a climate program last year, making it easier for businesses to generate their own solar and wind power. The state-owned electricity producer Eskom also has plans to reduce the amount of coal it burns and plans to decommission the country's oldest coal-fired power plants by 2030. Coal's share of the energy mix could fall to just over 50 percent. And the chemical company Sasol, which converts coal into liquid hydrocarbons to be used as fuel, plans to cut its use of coal by a quarter by 2030.

Like many other developing countries, South Africa is struggling to meet its growing energy needs. Since 2007, power cuts to prevent power plants from getting overloaded have been a part of everyday life in the country. There are set schedules, different levels and even apps that display the times for the outages. At the highest level, Level 8, people have to go without electricity three times a day for 4.5 hours. The economic damage runs into the billions. At times, entire cities have been plunged into darkness.

More energy was needed, so wind farms were built as well as one of the largest solar parks in Africa. At the same time, the country decided to build two gigantic coal-fired power plants, each with a capacity of around 4,800 megawatts. Together, they will form the largest coal-fired power plant complex in Africa. The solar farm only produces 96 megawatts.

It’s a never-ending back and forth. Wind farms are built here, and new coal-fired power stations there. And there are always plenty of pleasant announcements, like the one from Glasgow on Thursday. Representatives of industrialized and emerging countries signed a Coal-to-Clean Statement on Thursday reaffirming their intention to phase out coal. Among the countries that did not sign on to the statement are China, India, Australia.

But the governments of Germany, Britain and the U.S. no longer want to stand by as South Africa continues to burn coal. They have decided to "support South Africa in its energy transition" and are providing the country with $8.5 billion, including just under $700 million from Germany.

So, how much would it take to steer all emerging economies onto that kind of green path? The sums are staggering. The World Bank estimates that the aid required for Asia alone would be $13 trillion. The $100 billion the industrialized nations earmarked for that purpose at the World Climate Conference seems rather modest by comparison. Especially given that this money won't even flow until 2023.

China: The Black Giant

No country is facing as many challenges in weaning itself off coal as China. The country burns more than half of all coal consumed in the world, and in 2020, it pumped 14 gigatons of CO2 into the atmosphere - 14 billion tons.

The demand is so great because China uses coal not only as a fuel for heating and to run its vast inventory of steel plants, but also to generate a huge amount of its electricity - 57 percent according to most recent statistics. Seventy percent of all electricity is consumed by factories – including those to which many companies in the old industrialized countries have outsourced much of their production. The CO2 now rises into the atmosphere from factories in Dongguan and Changchun instead of in Cincinnati and Duisburg. An argument that Chinese politicians like to use when they are criticized for their emissions.

Nevertheless, Beijing has recently shown a serious desire to tackle the problem, in part because the consequences of a warming climate in China are becoming impossible to overlook. Shanghai, a megacity located just a few meters above sea level, is at high risk, with droughts and heavy rainfall increasing. As recently as October, large parts of the key coal province of Shanxi were under water.

That hasn’t been lost on China's leadership. There are no longer any relevant voices in the country that are denying that climate change is man-made. Last year, state and party leader Xi Jinping announced to the UN General Assembly that China would be climate neutral by 2060. From 2025, the burning of coal is expected to plateau and then slowly decline, with the country aiming to peak its emissions by 2030.

Many delegates from the West had hoped that Xi Jinping would make more far-reaching commitments at the climate summit. Although he doesn’t want to give up the construction of new coal-fired plants for the time being, he did say that China would no longer continue to build coal-fired projects abroad.

Nonetheless, Beijing has indicated that it wants to go all out in terms of renewable energies. The government recently stated that electricity consumption from sources that do not emit any CO2 should rise from just under 16 to 80 percent in 2060. The includes nuclear power, but the priority is to be placed on anything green. Xi pledged in mid-October that he would build additional solar and wind power plants with an installed capacity of 100 gigawatts in the country’s desert regions. That alone would be more than all the renewables of regional rival India combined. "China has a pretty consistent vision of how this decade should go,” says Lauri Myllyvirta, an expert on China’s energy sector at the Center for Research on Energy and Clean Air in Helsinki.

The targets for the next three decades are still pretty vague. But you have to give President Xi credit "for bringing about enormous change with his commitment to CO2 neutrality,” says Michael Davidson of the University of California at San Diego. "Voices within China’s energy sector calling for coal capacity expansion appear to be growing quieter.”

The fact that new blast furnaces and coal-fired power plants are still being planned and built is not hypocrisy, says Davidson, but rather an attempt by the industry to quickly add capacity before the announced peak. The leadership in Beijing is following this undertaking critically, he says.

The expansion of renewable energies is already progressing rapidly. Thanks to a government program, gigantic roof areas are being equipped with photovoltaics, and there is increasing use of hydroelectric power. China is well on its way to becoming the dominant leader in the market for climate technologies. The aim is to drive down prices for wind and solar plants to the extent that investments in coal-fired power plants no longer pay off. China has indeed made enormous progress in this area in the past two decades. Electricity from modern solar plants and wind turbines is already cheaper than coal-fired electricity.

Poland – A Question of National Honor

In the city center of Katowice, it looks as if the old coal and industrial city would like to move on from its past as quickly as possible. The main square is now called the market, it has been renovated with fresh stone slabs and EU money, and there are cafés and wooden benches that are actually comfortable. An artificial stream, four meters wide and crystal clear, flows through the middle.

Polish union member Dominik Kolorz

Polish union member Dominik Kolorz

Foto: Piotr Malecki / DER SPIEGEL

The past, though, is only about two kilometers away from the market. The path to the headquarters of the Solidarity trade union leads along the tracks. A winding tower comes into view and crumbling tenement buildings. Dominik Kolorz, the head of Solidarity for the Silesia region, is well over six feet tall and spent eight years working underground in a mine. "We don’t doubt climate change," he says, "but we shouldn’t be so cavalier in questioning coal as an energy source.”

Poland is the EU’s largest producer of hard coal, and more than 70 percent of the country’s supply of electricity comes from the fossil fuel. In Silesia, Poland’s historic mining center, some 50,000 miners enter the 20 or so coal mines each day. Kolorz estimates that up to half a million people are directly or indirectly dependent on coal mining.

At the same time, the mines haven't been profitable for years now. But after mine closures in the 1990s, which sparked huge protests, no government has dared to address the problem.

And Poland’s transition to cleaner energy has been postponed repeatedly, with the dispute having snowballed into a cultural clash. On the one hand, you have a population that is increasingly conscious of climate change, and which is truly suffering from smog, with around 40,000 people dying from it each year, according to the European Energy Agency. On the other, you have the miners, who are managing a rebellious legacy. They were the ones who went on strike in 1989 for the country to open itself to the West.

According to a recent agreement, Poland is now set to phase out coal by 2049. The miners’ incomes have been secured until then, with a welfare fund set up to cushion the transition.

"We agreed to it,” says Kolorz. But he doesn’t seem pleased with it. At the signing ceremony in Warsaw, he elaborated on that displeasure. "We’re disappointed,” he said. "They were the miners who defeated communism.” Nine of them died when the militia opened fire on strikers at the nearby Wujek mines in 1981.

When the Solidarity movement defends coal today, it is essentially defending the Polish way of life. The miners played a huge role in reconstructing the country after World War II. They worked in the mines and the mines paid for their homes, their soccer fields and their cultural centers. It was a dusty world, but it was theirs.

Kolorz doesn’t want to give up coal lightly. Neither wind nor solar, he says, are sufficient to power the boom that the country has experienced since joining the EU. Furthermore, he insists, there are technologies available to extract CO2 from the emissions. Sure, he allows, the technology isn’t quite ready for prime time, but nobody has a clue what to do with radioactive waste from nuclear reactors either.

The Polish phase-out plan still has to be approved by the European Commission. And there is no way the transformation can go any faster, Kolorz warns. Solidarity, he says, will know how to defend itself if the EU demands that greenhouse gases by reduced by 55 percent by 2030.

And really, the rest of Europe could easily ignore Poland’s coal-driven identity, if it weren’t for the European Union – and for the program it is currently negotiating. "Fit for 55” foresees the continent being climate neutral by 2055.

Germany: Role Model and Chilling Example

At least when it comes to the time it has taken, Germany’s phaseout of coal is not one that should be emulated. It has been ongoing since 1957.

After the war, Germany’s coal industry appeared to be irreplaceable. Coal was vital for the production of electricity, for steel and for all those machines that were still powered by steam. Before long, the mines were surrounded by industrial companies and factories that were powering the young republic’s economic renaissance.

But the excitement didn’t last long. German bituminous coal wasn’t particularly competitive on the international market. In many countries – like the U.S., Australia and South Africa – it was found close to the surface. In the German state of Saarland and in the Ruhr Valley though, the coal was as deep as 1,200 meters below ground, lying beneath densely populated urban areas.

Bringing it to the surface wasn’t easy. Huge volumes of water had to be pumped out over vast areas, long tunnels were dug, and elaborate structures had to be built to support the surface. Furthermore, the price of oil continued to drop throughout the 1960s, making coal much less attractive.

German lawmakers, though, were loath to shut down the mines. At its peak, coal was responsible for more than 600,000 jobs. And the country’s leaders were also concerned about making Germany, with its rising export industry, completely dependent on energy imports from countries like Saudi Arabia.

So, Germany decided on a gradual – extremely gradual – phaseout. First, though, the state introduced the so-called "Kohlepfennig,” or coal penny, an electricity bill surcharge. Germany’s highest court, though, threw it out, so it was changed into a direct subsidy straight out of the budget.

It consumed enormous sums of money. According to the think tank Green Budget Germany, the country spent 295 billion euros on coal industry subsidies by 2008. Despite repeated rebukes from the European Union, policymakers in Germany only changed their minds about subsidizing the coal industry in 2007. According to a law passed that year, the last coal mine in the country was to be closed in 2018.

The German federal government and the state governments of North Rhine-Westphalia and Saarland transformed the remnants of the company Ruhrkohle AG into a foundation. It was outfitted with billions in funding and also received dividends from the chemical company Evonik, which owned a majority.

The foundation ensured that miners found other jobs, and it is also responsible for covering in perpetuity the costs associated with pumping and filtering the water that was polluted by the mines.

Despite all that, dozens of coal-fired power plants have remained online in Germany, fueled by coal imported more cheaply from abroad. Even those plants powered by dirtier brown coal have been considered indispensable for the country’s electricity supply. The final phase-out plan now calls for the last power plant to be taken offline in 2038. The operators will receive 4.4 billion euros in compensation, despite the fact that most coal-fired power plants would find it extremely challenging to remain profitable until then due to the constantly rising prices of CO2 emissions certificates.

The money will buy the government peace of mind that it won’t be targeted with huge lawsuits. And also the hope that the huge scars left behind by the brown coal mines might actually be cleaned up.

An additional 5 billion euros has been earmarked to help out older workers and 40 billion euros have been set aside as structural assistance for brown coal regions – meaning that the coal phaseout will ultimately cost German taxpayers 350 billion euros, without a single cent of that money being invested in clean energies. And if the incoming governing coalition decides to speed up the phaseout, it will be even more expensive. Shutting down a brand-new power plant such as the one in Datteln, which only recently went online, won’t be free.

Breaking the Addiction

The power of coal is easy enough to explain. Over the course of an entire century, it has proven to be a cheap fuel for rising economies. And phasing it out is expensive.

The enormous amount of money that Germany has spent on the problem is unaffordable even for many countries in prosperous Europe. Countries like Indonesia, Vietnam or Bangladesh will require huge amounts of support, says Ottmar Edenhofer, director of the Potsdam Institute for Climate Impact Research. And that money, he says, must be linked to clear conditions. Otherwise, the phaseout of coal will fail.

Furthermore, he says, coal has to become more expensive than nuclear power and natural gas. And that is particularly difficult to achieve when it comes to gas. Current shortages have boosted the price of the fuel by 70 percent, making gas-powered plants unprofitable. And the less money energy companies spend on exploiting new natural gas fields – since fossil fuels don’t have a long future anyway – the more expensive it will become.

The only way out of this problem is a uniform minimum price for CO2 emissions in the U.S., China, the EU and, ideally, India, says Edenhofer. Without such a system, he says, it will be difficult to leave coal behind in the coming decades.

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