The global coal industry stumbled into 2015 looking pretty peaky. Analysts across the finance sector were increasingly using terms like “structural decline” to describe its state and its future, while the spin-meisters spent a fortune hitting back with a new PR campaign that suggested coal was critical to lifting the world out of poverty. Which makes you wonder which radical greenie at the World Bank said: “We need to extend access to energy to the poor and we need to do it the cleanest way possible because the social costs of coal are uncounted and damaging, just as the global emissions count is damaging as well.”
None of it was enough to defy gravity as the price of coal, and the share value of companies in the coal business, tumbled.
China’s use of coal continued to fall amid an ongoing air pollution crisis that appeared to go from bad to catastrophic, the US market saw gas usurp coal for the first time and the combined outcome appears to have led to a drop in global carbon emissions.
Then as the year drew to a close the IEA slashed its five-year forecast for coal demand growth by more than 500 million tonnes, pointing to “official preliminary data” that the key Chinese market saw demand fall in 2015 and that decline is set to accelerate. In fact the IEA finally admitted that coal use in China probably peaked in 2013.
Coal is in trouble. Gloomy global forecasts, on-going oversupply, oppressive levels of air pollution in China, India and elsewhere and now an international agreement that demands global warming stays well under 2 degrees.
Nor is the Australian coal industry immune from these troubles. Over the last year some pure coal play companies like Whitehaven have lost over 50% of value – Whitehaven is currently trading 67 cents with Macquarie analysts predicting it will halve yet again to 30 cents. And one coal mine valued at over $600 million just three years ago sold this year for one dollar.
The job losses have also been enormous with at least 30,000 lost over the last year and potentially another 30,000 to go. Yet still only the rarest breed of politician is willing to consider planning a just and fair transition for coal workers and comminutes, as the world increasingly looks elsewhere for its energy source.
While the dust is yet to settle on the Paris Agreement, it is clear the world has committed to a fossil fuel free future – a future thermal coal has no place in.
This is not just bad financial news for the industry; it is also having a bad impact on the industry’s political power. But if all this is not enough to wreck the coal industry’s Christmas, this week the industry suffered another reputational hit.
It turns out that on top of the billions of dollars worth of subsidies and the huge political patronage the industry is given, it also gets to pay next to no tax.
Here is a list showing just how little tax the thirty-one coal companies pay, all of who were outed by the ATO on Friday.
For an industry that has seen its economic base undermined, its product increasingly marginalized, this last revelation is going to damage its remaining political capital.
This should be of more than just a passing interest to any Australian who has superannuation or who uses a bank account because all those coalmines, companies and coal infrastructure is paid for by you.
Yup, your superannuation and/or bank is heavily invested in the coal industry and that means your superannuation is invested in an asset class that is on the way to becoming stranded – taking your investment with it.
That’s why its time we looked at our banks and super funds becoming completely free of fossil fuels, starting with thermal coal. We want to see a world that is generating power without thermal coal and as quickly as possible. That’s a world without investment in thermal coal. And with Paris demanding everyone to raise the bar higher, we’re more than happy to oblige.
This year has been an incredible time for our campaigns. Not only have we seen one of Australia’s big four banks say they won’t be taking part in any financing for the Carmichael coal mine, all of Australia’s big banks are on board with the goal of keeping global warming to below two degrees. And even Australia’s biggest lender to fossil fuels – ANZ – said last week that they were proactively reducing their exposure to the coal sector.
We’re still far from being able to trust the big banks and super funds to get it right for the climate and environment, but this year has shown that a switched on and engaged community, holding their institutions accountable, can achieve great things.
We now have the chance to radically shift how banks and super funds invest if we apply the same formula. If we apply pressure and accountability from the community we can turn commitments the Big Four bank’s commitments into real investment and policy change.
Twenty-fifteen might have been an ugly looking year for the coal industry, but for the rest of us it has finally offered a hope and possibility that the massive ship of global warming can be turned around.