N. Peter Kramer’s Weekly Column
If the world wants to limit global warming, it must get rid of coal, the most carbon-intensive of all energy resources, as quickly as possible. Its combustion is responsible for 45% of human caused greenhouse gas emissions. When, in August, the UN Climate Panel (IPPC) released its gloomy message about the state of the climate, UN Secretary-General Antonio Guterres called the report the ‘death knell’ for coal and fossil fuels.
But although the ‘black gold’ has lost its lustre, the addiction to coal is proving persistent. Now that the global economy is rebounding after corona lockdowns, the hunger for energy is once again great. Despite all the intentions to emerge from the crisis greener and more sustainable, the advance of renewable energy is falling short and coal remains indispensable to satisfy that hunger.
Today the price of coal is at its highest levels since 2008, before the financial crisis plunged demand. In the European futures market for coal used in power plants, the price is now close to €150 per tonne, more than double since the beginning of this year and more than three times as much as last year. The growing demand for coal is mainly driven by the production of steel and electricity. It is on track to increase by 5% this year.
Coal also made a come back in the EU. The cold weather, disappointing electricity production from wind energy, and high gas prices mean that coal-fired power stations in the EU have to step in more often.
Without tough political choices, the coal age on which the West, Europe in front, has built a lot of prosperity in the past, will not end soon. The climate ambitions of ‘Paris’ threaten to reman ambitions.