Emails reveal the UK coal industry’s “urgent” lobbying on the government’s efforts to tackle climate change.
The series of emails, obtained via a freedom of information (FOI) request by Friends of the Earth and seen by DeSmog UK, show the Association of Coal Importers and Producers (CoalImP) asking then Treasury minister Damian Hinds in February for “an urgent meeting to discuss the future trajectory of the Carbon Price Floor.”
Describing the Carbon Price Floor (CPF) as a “punitive tax” rather than a measure to reduce carbon emissions, CoalImP writes that the CPF is “killing the goose that laid the golden egg” and that “the rate of coal closures is compromising its revenue raising potential”.
Introduced in 2013, the CPF was designed to set a minimum price, related to emissions from fossil fuels, which would rise annually and encourage manufacturers to switch to greener fuels. A key aim of carbon pricing is to force a switch away from big greenhouse gas emitters like coal to less polluting energy producers like gas.
Coal in Crisis
CoalImp’s urgent request for a meeting was sent just days after a meeting between the coal industry and the then-energy minister Andrea Leadsom. The meeting saw industry admit it was “in crisis” and criticised the government’s proposal to phase-out unabated coal by 2025 claiming it would have “little benefit in terms of reduced carbon emissions”.
CoalImP members include Miller Argent (who want to dig up coal at Nant Llesg in Wales), and Banks Group (who have a number of UK coal mines including on climate science denier Matt Ridley’s estate), along with ENGIE, Drax Power, and EDF Trading.
Commenting on the emails, Friends of the Earth campaigner Guy Shrubsole, who made the FOI request, said: “This looks like more desperate lobbying from the dying coal industry.
“Spooked by crashing coal prices, beaten by solar this past May [and July], and shorn of its Carbon Capture & Storage lifeline, Old King Coal is fighting a last-ditch battle in the corridors of Westminster.
“The Government should stick to its plan to phase out coal power stations, and reject proposals for new opencast coal mines like the one under consideration at beautiful Druridge Bay in Northumberland.”
The government, however, still hasn’t launched the consultation on phasing-out coal, originally due in the spring. A spokesperson at the new Department for Business, Energy, and Industrial Strategy said the consultation is still “something they were looking to put out in due course”.
In its email dated 15 February, CoalImP describes how “the sheer magnitude of its [the CPF’s] impact” has caused coal power station closures.
Failing to cite the source of its claims, the group continues: “The CPF does nothing to reduce CO2 emissions at EU level; as a unilateral UK measure it enables the rest of Europe to emit more, depresses EU carbon prices and directly impacts the competitiveness of UK industry, not only on the world stage, but on the European stage also.”
It goes on to write that “the CPF is costing jobs now – not only in coal production and infrastructure but in the wider economy – the steel industry has referred to the UK’s cripplingly high electricity costs”.
However, the industry association omits the fact the steel industry instead placed most of the blame for this on Chinese oversupply, and has received compensation amounting to 30 percent off the cost of the CPF.
Zero Coal Power
Then in May, CoalImP requested a second meeting to further discuss the CPF following former Chancellor George Osborne’s budget announcement which said: “The government will set out the long term direction of CPS [Carbon Price Support] rates and the carbon price floor at the autumn statement, taking into account the full range of factors affecting the energy market.”
CoalImP reiterated its concerns expressed in its earlier emails: “We have seen an unfolding crisis on the steel industry, partly due to high electricity prices, the closure of several coal-fired power stations with the loss of related jobs, and last week the first incidence of zero power from coal since the industrial revolution.
“All these developments are closely related to the punitive level of UK carbon taxation which is not suffered by any of our European or global competitors.”
The Treasury wouldn’t state whether the second meeting had gone ahead, saying “We can’t comment on individual ministers’ meetings.”
A Treasury spokesperson did clarify that “At Budget 2016, the previous Chancellor announced that the government would maintain the cap on CPS rates, and uprate this with inflation in 2020-21 in order to continue protecting businesses.”
With regards to the whether the direction for CPS rates and price floor would still be announced at the Autumn Statement, they said: “At the moment, the situation has not changed.”
Photo: Kesavan Muruganandan via Flickr