What is on the Cards for the Coal Industry in 2015? – by Aleksandra Tomczak (Cornerstone: The Official Journal of the World Coal Industry – April 2015)

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Aleksandra Tomczak is the Policy Manager, World Coal Association.

Last year the coal industry saw a number of important changes to policies and regulations, both nationally and internationally, that directly affect coal demand and the business of mining coal. Among the most important were the repeal of the carbon tax in Australia, the EPA’s CO2 emission limits on new and existing power plants in the U.S., the EU’s initial agreement on the 2030 energy and climate package, and the election of a new prime minister in India.

Following a year that saw over 40% of the world’s population voting in national elections and major new policy developments in the key coal demand and production regions, what is on the cards for the coal industry in 2015? Undoubtedly, the major event that could structure policy and regulatory developments of interest to the coal industry in 2015 is COP21 in Paris. COP21 is expected to bring about the world’s first comprehensive climate deal.

In fact, some of the most important jurisdictions—including the EU, China, the U.S., Australia, South Africa, Australia, and Japan—will see national climate policies debated as part of the preparations for the international climate negotiations. This makes 2015 a year of strategic importance to the coal industry as it continues to make its case for the sustainable use of coal and cleaner coal technologies as part of the global mitigation strategy.

COP21 PUTS CLIMATE AND ENERGY POLICIES AT THE TOP OF THE AGENDA

The international community set itself a deadline at COP21 in Paris this year to agree on a comprehensive climate deal which will, for the first time in the world’s history, cover both developed and developing countries under a single agreement. In session from 30 November until 11 December, COP21 is the concluding point of the four-year-long negotiations under the Durban Platform, established during COP17 in South Africa.

The deal can be expected to follow a bottom-up approach whereby countries make pledges that reflect their national circumstances. This differs significantly from the top-down approach adopted in the Kyoto Protocol, which had a global mitigation target and country targets allocated based on a developed/developing country division.

COP21 will structure climate and energy policy developments worldwide as governments debate and consult domestic stakeholders to define national mitigation pledges under the United Nations Framework Convention on Climate Change (UNFCCC). Although it is far from certain that COP21 will result in ambitious mitigation targets for all countries, it is certain that the national-level preparatory work will be carefully scrutinized throughout the year by stakeholders.

UNITED NATIONS TO ADOPT SUSTAINABLE DEVELOPMENT GOALS

In September 2014, the UN General Assembly released a set of draft Sustainable Development Goals set to be agreed upon at a special UN summit in September 2015. These goals form part of the post-2015 development framework and will replace the UN’s Millennium Development Goals. According to Benjamin Sporton, Acting Chief Executive of the World Coal Association, “It is important that the goals refer to energy access and recognize the role of cleaner fossil fuel technologies.”

FOSSIL FUEL DIVESTMENT CAMPAIGNS GAIN RENEWED VIGOR

In December 2014 the independent-expert group set up to advise the Norwegian government on investment in fossil fuel assets supported continued investment in coal and petroleum companies—counter to the global campaign to divest from fossil fuels, particularly coal. Despite that, the global divestment campaign is expected to continue, with renewed vigor, leading to the COP21 climate negotiations in Paris.

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