Greg Sheridan: Abolish Australia’s coal industry? Tell ’em they’re dreaming

  • Date: 09/09/21
  • The Australian

The demand by a senior UN official that Australia should abolish its coal industry by 2030 shows how absurd and ridiculous the world body often is.

A coal train travels through NSW’s Hunter Valley.

If any Australian government were foolish enough to follow this advice there would be a net increase in global greenhouse emissions and Australia would be very substantially poorer.

The Morrison government should reject this call much more publicly and explicitly than it has so far.

The UN’s assurance that no coal community should be left behind, and that alternative jobs should be found for them, is evidence of the fairies at the bottom of the garden thinking that the UN so often gives expression to, and that continues to characterise so much of the global waffle on climate change.

There is nothing inconsistent with Australia maintaining and expanding its coal industry, and still making a proportionate and reasonable contribution to reducing greenhouse gas emissions, meeting and exceeding our Paris targets and further reducing emissions in years to come.

The sheer illogicality of the UN’s position is evident in the fact it would certainly drive up greenhouse gas emissions. This is based on the simple but intractable realities of coal.

Australia is typically the second biggest exporter of coal. But we are not the dominant producer of coal. Australia produces only about 6 per cent of the world’s coal. China produces about 50 per cent of coal globally.

Most nations that use coal have some coal of their own. Australia, with such a small population of 26 million, exports most of its coal. Our biggest coal export competitors are Indonesia, Russia, Colombia and South Africa.

In the event that we were self-destructive enough to abolish our coal industry, global coal use would not decline. Our export markets would be taken by Indonesia, Russia and so on. Countries such as China and India would be forced to use more of their own coal.

But Australian coal has a significantly higher calorific value than Indonesian, Chinese or Russian coal. This means it produces more energy per tonne. You burn less coal to produce a kilowatt-hour of energy. Coal-fired power stations using Australian coal produce fewer greenhouse gas emissions per unit of energy than those using Indonesian, Chinese or most other coal.

This is simply geological happenstance. But it’s also reality. Therefore if we follow the UN’s diktat we increase carbon emissions globally and impoverish ourselves.

Between thermal coal and metallurgical coal we typically earn well over $40bn in coal export income every year. We derive billions upon billions of dollars in royalties and in the tax payments of the companies and their 40,000-odd employees. The idea that anything substitutes for this in the short term is nuts. In abolishing the coal industry we would slice a huge chunk out of our national wealth, making it much harder to pay for the National Disability Insurance Scheme, Medicare, pensions, the massive debt we are accruing.

Our thermal coal goes to coal-fired power plants and our metallurgical coal is used to make steel. Both produce greenhouse emissions. The UN apparently wants us to abolish the lot.

None of the other big coal producers such as Indonesia, China and Russia will be influenced by the UN’s nonsense.

The idea that coal is on the way out globally just doesn’t square with any of the facts. Demand has certainly declined in North America and Europe. But as this column has frequently pointed out, China has commissioned more new coal-fired power than the entirety of the coal power sector in the US.

India, Indonesia and a swag of other developing countries throughout Asia and Africa have commissioned and are building hundreds of new coal-fired power stations. It’s not only developing nations. Japan, too, is producing new coal-fired power stations.

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