Earlier this year, one of the world’s leading mining companies announced that it was to end its association with an international coal lobby group, citing ‘material differences’ and a ‘narrow range of activities of benefit’.
Given that this was BHP, the world’s largest exporter of coal for steel making, cutting its ties with the World Coal Association (WCA), one could be forgiven for thinking this would have a major impact on both the coal industry and on the WCA itself. Add to this news that a number of major companies including Rio Tinto and BHP have sold off most of their coal assets, what does this mean for coal? Are we going to see the end of coal as a major resource?
“We see coal as being a vital, strategic and economic resource for the world because today, cIose to 40% of the world’s electricity comes from coal,” says Benjamin Sporton, Former Chief Executive of WCA, speaking to us earlier this year as his tenure comes to an end. “It's still a very important part of making steel and cement and other products as well. So, it's a critical strategic and economic resource, particularly in developing an emerging economy.”
Sporton immediately addresses the selling of coal assets. “With these major companies selling their coal assets, don’t look at it from the perspective of ‘backing away’ from coal,” he says. “These companies sold these assets for huge prices. For an industry that some say is on its way out, I think that actually shows an industry that is incredibly strong.”
The WCA is the global network for the coal industry, striving to demonstrate and gain acceptance for the fundamental role coal can and will play in achieving a sustainable, lower carbon energy future. In a time where the eyes of the world are constantly looking at ways of reducing the carbon footprint, forcing some companies to move away from coal, the important role that the WCA plays is as crucial as ever before.
Sporton recognises that the coal industry is often dominated, and often overshadowed, by the conversation of climate change. In effect, this is what drives WCA. “It’s about obtaining those strategic benefits of coal while addressing the environmental challenges that come with it,” he says. “By looking at how technology can reduce the environmental impact, we want to end up in a place where we can use coal and don’t have the consequences that have traditionally come with it.”
Technology is the key driver in getting to that scenario and the WCA works extremely close in better understanding and implementing high efficiency, low emission (HELE) coal technologies and carbon capture and storage (CCS) solutions.
The technology conversation surrounding coal has changed significantly over the last decade and Sporton notes this has impacted the way that WCA has adapted its key messaging. “Progress is being made on CCS,” he says. “Good progress too, but the technology story is only at the beginning and will continue to grow immensely over the coming years.”
So how does the WCA work with the industry to influence and help define this conversation? There are four core strategic objectives that shape the organization: influence and engaging; powering economies; meeting environmental challenges; and building sustainable societies.
Membership to the WCA is open to companies and not-for-profit organisations with a stake in the future of coal all over the world, so the WCA has a responsibility to connect the members across its network to the UN, or regional associations and create greater collaboration all over the world.
Sporton, having been with the WCA since 2010, has seen first hand that companies in the industry lack the connections they need with the likes of the UN or government associations in order to make a greater impact to the coal conversation. “A lot of our work is engaging at a strategic level with those sorts of organisations, or international governments, for our members in a way they can't do, or wouldn't do, on their own,” he says.
“We work to be far more outward-facing for our members than necessarily facing back towards our members. WCA coordinates amongst members on approaches to things like low-emissions coal technology, helping them link up with other international bodies or organisations they should be working with.”
An example of this in practice can be seen with the WCA’s work with ASEAN Centre for Energy (ACE), in Indonesia. The ACE accelerates energy strategies and policy across 10 ASSEAN member states that are in harmony with the economic growth and environmental sustainability of the region.
WCA acts a bridge connecting member companies across Asia and even Australia to learn and understand how the deployment of low emissions coal technology can better support the implementation of those strategies.
The key challenge with coal is a challenge of perception and for some there is a belief that companies choosing to exit coal shows that there is no future. The World Bank in recent years has warned against new coal power plants. This is where the connection with Asia, as well as Africa, proves key. Sporton notes that the world, while focusing on climate change, should not disregard these emerging economies and the role coal will play in this emergence. “There are those in the industry that think it’s on the way out,” he says. “But then you look at Asia and Africa – they recognise that coal is key to the growth of their economies and so we have to stimulate that conversation and work out a way forward.
“These countries need financing from organisations like that of The World Bank to be able to afford the best technologies that reduce carbon emissions. Our challenge is to continue to open those doors, change the perception of coal and show that it can be in fact a key contributor to that low carbon economy.”
It hasn’t all been hurdles and obstacles in the path to changing this perception of coal. Sporton can point to some key milestones representing an industry ready to change. A key turning point for him was the lead up to the Paris Agreement. WCA worked with countries that have identified coal as key to their future growth in order to implement technology and CCS into their Paris Agreement pledges.
“While these countries are looking at coal in the future, we looked at how they can consider these technologies and drive down emissions today,” says Sporton. “In the end, countries such as China, Japan, Indonesia and Nigeria all included technology within their pledges. Technology was recognised on such an international level… for me that’s quite an achievement.”
In July, Sporton stepped down as Chief Executive, moving to head up the Global Cement and Concrete Association. But speaking to us prior to his resignation, he was still keen to look at the role WCA will continue to play in the future of coal. “What the WCA will always do is represent our industry,” he says. “WCA has a positive story to tell about the contribution the coal industry makes, both now and in the future.”