Why ‘Clean Coal’ Is Being Embraced and Questioned

(Bloomberg) -- The words “clean coal” are repeated frequently by industry executives and politicians, notably U.S. President Donald Trump. Often used to defuse concerns about greenhouse gas pollution, the moniker is meant to give the impression that the dirtiest of the fossil fuels has cleaned up its act. That’s an exaggeration, at best. While dozens of plants promoted as “clean coal” are being built across Asia, in Europe and the Americas, environmentalists, scientists and even some investors argue that the world can’t keep burning any form of the fuel without causing irreparable damage to the planet.

1. What is ‘clean coal?’

It’s a marketing phrase coined by the industry that encompasses several different technologies designed to reduce the harmful effects of relying on coal to make energy. They include burning coal at a higher temperature to squeeze more energy out of the fuel so less is used, and scrubbing sulfur and nitrogen oxides out of it to reduce the harmful pollutants released into the atmosphere. The phrase can also refer to the act of taking carbon dioxide spewed out by power plants from the air and burying it deep underground.

2. Does ‘clean coal’ pollute less than regular coal?

The most sophisticated plants using the latest technology, of which there are about 300 worldwide, claim to reduce carbon dioxide emissions by as much as 35 percent compared with older coal-burning plants. At that rate, they rival emissions from natural gas production, the cleanest fossil fuel, according to industry bodies. Critics say the world needs to swear off fossil fuels by 2050 to have any chance of containing global warming.

3. Why is coal still being used as fuel?

It’s popular because it’s abundant, easy to ship and able sit in storage for months or even years before it’s used. Coal is the oldest source of electricity and still the most widely used fuel, accounting for 38 percent of power generated in 2017. While that proportion is likely to drop to 26 percent by 2040 with the spread of renewables and natural gas, coal will remain a large part of the world energy supply for decades to come, according to the International Energy Agency, the Paris-based institution that advises governments on energy.

4. Where are ‘clean coal’ plants being built?

There are still close to a billion people in the world without access to cheap electricity, and many of them are in Asia. So that’s where new coal plants are being built, particularly in China, where there is more political and financial support. Companies like General Electric Co., IHI Corp. and Mitsubishi Heavy Industries Ltd. in Japan, Siemens AG in Germany and Doosan Corp. in South Korea are pushing “clean coal” technology, though the technology has proved to be too costly for some countries.

5. How have environmentalists responded?

For them, burning coal in any form needs to come to an end. The court of public opinion appears to be with them as renewable energy and storage become ever-cheaper and calls to dramatically reduce global emissions reaches fever pitch. Groups like the Sierra Club, backed by Michael Bloomberg, founder and majority owner of Bloomberg LP, parent of Bloomberg News, along with the Natural Resources Defense Council have campaigned against the harm done by coal pollution. They argue that even the best coal plants contaminate groundwater and put mercury and dust into the air that harm people and the atmosphere.

6. What are the political issues?

That depends on where you live. Trump has made reviving U.S. coal production a core part of his legislative agenda, promising to bring jobs back to the dying industry. And Australia, reliant on mining and coal exports, has shown little inclination to cut its industry ties. In Europe, nations are putting in place plans to shut down coal power plants. While governments are supporting the mining industry in Poland and Germany, all countries are discussing when to close their power plants using the fuel, with Chancellor Angela Merkel’s administration considering a proposal to finish the process by 2030.

7. What are investors saying?

Pressure from environmentalists and nations trying to meet Paris climate agreement goals has provided momentum for investors and insurers to pull out of coal. Some of the world’s biggest insurers — including Assicurazioni Generali SpA, Allianz SE and AXA SA — have pledged to scrap underwriting new coal plants, and insurance market Lloyds of London said it will divest from the fuel. Standard Chartered Plc and HSBC Holdings Plc have both made varying pledges to make similar moves. To satisfy sustainable investors, all businesses are being encouraged to voluntarily disclose climate-related risks by initiatives such as the Task Force on Climate-Related Financial Disclosures, an effort supported by some governments’ financial regulators. (Michael Bloomberg serves as TCFD chairman.)

8. Can technology be used to reduce coal pollution?

Carbon capture and storage, which siphons atmosphere-damaging pollutants from industrial smokestacks and sticks them underground permanently, has long been touted as an answer to the world’s climate woes. So far, exorbitant costs and industrial risks have made governments reluctant to support the technology. While a United Nations report released in October said CCS is essential in any scenario that limits global warming to acceptable levels, the industry also lacks a proven economic formula that would provide incentives for projects at a big scale.

The Reference Shelf

  • The American Coal Council guide to clean coal technologies.
  • The Sierra Club’s arguments against Trump’s coal vision.
  • The UN’s Intergovernmental Panel on Climate Change report on what happens with a global warming of 1.5 degrees Celsius.
  • Bloomberg Businessweek article, “The Myth of Donald Trump’s ‘Beautiful Clean Coal’.”
  • Bloomberg Opinion on why “clean coal” is no savior for power plants.
  • Bloomberg QuickTakes on the battle over coal, Germany’s coal plans and carbon capture technologies.

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