Coal countries balk at G20 phaseout calls

ROME — A group of coal users and coal exporters is blocking efforts for the G20 to call for an end to coal use — something organizers had hoped would send a powerful signal ahead of COP26 climate talks starting Sunday.

Diplomats from the U.K. and Continental Europe are pressing for a commitment by the large economies to phase out coal, a fuel responsible for about 44 percent of man-made CO2 emissions.

But Australia, India, China and Russia are holding out, a European diplomat said.

Australian Prime Minister Scott Morrison arrived in Rome after a bloody fight to set a domestic net-zero emissions target for 2050 — a goal that pointedly does not aim to halt the country’s lucrative coal exports.

“We are not engaged in those sort of mandates and bans. That’s not the Australian government’s policy, it won’t be the Australian government’s policy,” Morrision said after talking to French President Emmanuel Macron, who asked him to commit to ending the production and consumption of coal at home and abroad.

A spokesperson for U.K. Prime Minister Boris Johnson said the British hosts of the COP26 climate summit would continue to push Morrison: “We do believe Australia can do more on areas such as coal.”

The G20 leaders will discuss climate change and energy on Sunday morning. Also on the table in draft agreements seen by POLITICO were deals to end international coal finance, ramp up action during the 2020s, reach net-zero emissions “by mid-century,” and halt the construction of new coal plants “in the 2030s.” Negotiations were continuing on Saturday evening and none of the specific language had been settled.

The economic and political interests of the regions where coal is mined and burned are proving to be an obstacle for the organizers of the G20 and the upcoming COP26.

In thrall to coal

Some G20 countries — like China and India — owe their invite to the world’s club of economic giants in large part to economic development fueled by coal and fear the high price of shifting their energy mix.

Russia is a large coal exporter, especially to China, and also uses the fuel at home. Australia earns about 50 billion Australian dollars a year from coal exports.

Chris Littlecott, associate director of the E3G think tank said: “The key dynamic I see is the tactical alliance between coal exporter Australia  — desperately trying to maintain export markets and keen to promote further new coal construction — and major coal users China and India, which have the biggest challenge ahead of them for phasing out coal use.” But he said the fact that a push to end coal had reached the G20 leaders’ meeting was a significant signal.

Johnson told reporters he had been “evangelical” about “the potential to move away from coal” in a Friday call with Chinese President Xi Jinping, trying to persuade him that ditching coal was not as hard as it seemed.

According to Johnson, Xi told him: “China depends on it for our domestic economy.” But Johnson was adamant that China, an economy more than five times the size of the U.K., should look to the example of Britain which has gone from coal generating 40 percent of its power to nearly zero within a decade.

“It shows how fast you can make the transition,” Johnson said.

China, which has huge coal reserves but little oil and gas, fears relying on others for its energy supplies, said Yan Qin, an analyst with Refinitiv.

In a statement Saturday, Xi pointed to the “exceptional difficulties and concerns of the developing countries” — among which China counts itself — and urged developed countries to do more to tackle climate change.

Those countries aren’t alone in struggling to drop the fuel. U.S. President Joe Biden arrived in Rome bruised from a battle in Congress where Senator Joe Manchin from coal-producing West Virginia was holding up his key infrastructure and climate package.

While the U.S. is pushing for a broad climate effort at the G20, it has been publicly quiet on coal. The U.S. blocked a push at this year’s G7 to set an end date for a coal phaseout.

Although the EU’s position calls for an end to coal use, it is divided internally, with some countries like Poland balking at the costs of a rapid exit from coal.

On to COP26

Hopes that the G20 might still spur COP26 in Glasgow are pinned on Indian Prime Minister Narendra Modi being pried away from the other coal countries. Modi is actually in Rome, unlike Xi and Russian President Vladimir Putin, and has been lobbied personally by Western officials over the past year.

“He gets it and he is more visionary than his negotiators,” said the European diplomat.

But that’s a big ask for India, which has not set any target for reaching net-zero emissions and is counting on coal to fuel its industrialization.

“In India, coal is seen as the bulwark of the power industry and fundamental to livelihood, state revenues and sustainable development,” said Rajani Ranjan Rashmi, India’s former lead climate negotiator and a program director at the Energy & Resources Institute in New Delhi. “Seeing it as a mere source of emissions and pollution would be counterproductive.”

If the anti-coal drive fails in Rome, the fight will shift to Glasgow.

Johnson said in parliament last week that President Joko Widodo of Indonesia was planning to announce a 2040 coal phaseout date, which would represent a major step forward for one of the world’s largest and most coal-dependent economies.

Organizers of COP26 hope that by the end of the conference they can paint coal as a sector in terminal decline and a bad investment. But while Johnson might be evangelical about the need to give coal up, others are holding just as religiously to a different future.

“The Australian way is our path and that’s what I’m here to talk about and be faithful to,” said Morrison.

Stuart Lau and David M. Herszenhorn contributed reporting.