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Can global markets push Asia towards cleaner coal?

Japan, one of the world’s most assertive (if discreet) advocates of coal energy, has decided to put a stop to the construction of its most inefficient coal fired power plants.

The clampdown targets a spate of small facilities with efficiency rates of less than 42%, marking a small butsignificant step towards compromise in East Asia’s standoff between economic growth imperatives and global carbon emissions targets.

Japan’s new policy marks a notable change of course, especially given the government’s support for coal power. At least eight brand-new coal burning plants have opened over the last two years, with plans at least 36 more over the next decade.

The government previously pledgedto reduce coal’s contribution to the country’s energy mix to 10%, but its latest energy plan suggests the figure will still be 26% in 2030.

Japan has also pledged to slash carbon emissions by 2030 under the COP21 agreement, but Japanese coal use simply reflects economic and political reality. The Fukushima disaster of 2011 forced the closure of all 54 of Japan’s nuclear reactors; only nine have reopened. Althoughutility companies have turned to natural gas to fill the void, a lack of local production facilities makes gas prohibitively expensive. The big power firms that control the transmission grid, meanwhile, have often flat out refused to buy electricity from renewable sources.

Dilemmas

Japan’s neighbors are facing similar dilemmas, weighing lofty environmental ambition against the demands of rapid economic and population growth. East and South Asia are home to many of the world’s fastest growing economies, and leaders in those countries are at pains tomake sure their national energy infrastructure can keep up with breakneck economic expansion. China, for example, saw 6.9% GDP growth in 2017. India is expecting GDP growth of 7.4% this year, with government advisors implying double-digit growth rates could be on thehorizon.

Indonesia’s president Joko Widodo recently demonstrated this pressure at work, opting to prolong a policy requiring coal miners to supply 25% of their product to the domestic market. Coal accounts for over half the Indonesia’s overall electricity production, while renewable energysources such as hydropower remain underdeveloped. Electricity consumption has nearly doubled in the last decade, propelled by Indonesia’s growing middle class and burgeoning tourism industry. With coal reserves expected to last until the end of the century, Indonesia is taking along-term approach to its energy transition.

In India, where coal powers 75% of installed electricity capacity, electricity consumption is expected to increase nearly fourfold by 2030 but the country has over 300 billion tonnes of total supply to fall back on. Across the border, Pakistan has around 175 billion tonnes in depositsbeneath the sands of the Thar Desert. With China providing around $35 billion in funding for a string of new coal-fired plants, Pakistan sees those coal deposits as the solution to its 4 GW energy deficit. Pakistan’s elections and change of government won’t change that strategy; the likely next premier, Imran Khan, has come out in favor of leveraging the Thar coal deposits as well.

Harsh reality

While environmentalists gnash their teeth, these Asian countries are not exaggerating when they protest that their choices often lie between human development and environmental protection. Around 400 million people across the Asia-Pacific region live on less than $1.90 a day, and local governments see providing power for these people as their overriding short-term priority.

That helps explain why organizations including the World Bank have failed to stop new coal-fired energy projects, even when they refuse financing. Perhaps a better strategy would be to meet the Asia-Pacific countries halfway, encouraging them to make their coal operations moreefficient rather than abolishing them.

Both China and Japan are already making moves in this direction. China has ploughed huge sums of money into “ultra-supercritical” technology, which achieves efficiencies in coal plants by driving up operating temperatures. In Japan, the same technology is being used to powerthe Isogo Thermal Power Station in Yokohama, generating the lowest emissions per unit of power of any coal facility in the world. The two countries are racing to export their greener coal technology around Asia, investing billions of dollars in neighboring countries in a battle ofcommercial diplomacy linked to their wider competition for regional influence.

Under the Trump administration, the United States is effectively taking the same approach. Speaking at the Indo-Pacific Business Forum last month, US Energy Secretary Rick Perry stated the US would be exporting High Efficiency Low Emission (HELE) coal technology to India andother developing markets to help them achieve energy security. The Trump administration is also advocating the creation of a global fossil fuel alliance that would bring together countries “willing to make fossil fuels cleaner rather than abandoning them.”

Perry also discussed advances in the field of carbon capture and storage (CCS), a process which traps carbon dioxide during the coal-burning process and buries it underground. CSS prevents around 90% of CO2 emissions from entering the atmosphere. Many scientists suggestCCS technologies will be indispensable to meeting the COP21 emissions reductions targets. China currently has eight major CCS projects in development, while Japan’s Tomakomai port CCS project is achieving promising results in capturing CO2 in a more cost-effective manner.

If China, Japan, and the US can spread these and other innovations across Asia to burn coal more efficiently, their coal advocacy could nonetheless help the region significantly reduce its carbon footprint. That approach may not satisfy Westerners who insist Asia’s developingeconomies abandon coal altogether, but pragmatism will likely make for an easier sell.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.

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