Banks and coal

Coal and its impacts

From concerns over air pollution and acid rain to its destructive impact on climate, coal has been recognised as the dirtiest, most dated and most inefficient fossil fuel option.

Coal is the most emissions intensive fossil fuel and the leading cause of climate change. Globally, coal-fired power plants are the largest source of carbon dioxide (CO2)—greater than tropical deforestation or oil use for transportation.

In addition, thousands of miners die in coal mines every year around the world while some mining companies top entire mountains for the extraction of coal, which has disastrous consequences on the environment.

Despite this, coal is experiencing a global boom, and private banks are making large sums of money by financing the expansion of coal extraction and combustion.

To avoid the devastating impacts of their investments, private banks must take steps to disengage from all activities and projects that substantially contribute to climate change and environmental and communities degradation.

They must:

• End support for all new coal  extraction and delivery;
• End support for all new coal-fired power plants.

BankTrack Coal Campaigns

In recent years, the main targets of BankTrack members and partners on coal around the world have been :

Mountain Top Removal Coal Mining in the United States

Mountaintop removal (MTR) mining is a form of strip mining in which coal companies use explosives to blast as much as 800 to 1000 feet off the tops of mountains  in order to reach the coal seams that lie underneath. The resulting millions of tons of waste rock, dirt, and vegetation are then dumped into surrounding valleys, burying miles and miles of streams under piles of rubble hundreds of feet deep. Mountaintop removal mining harms not only aquatic ecosystem, and water quality, it also destroys hundreds of acres of healthy forests and fish and wildlife habitat, including habitat of threatened and endangered species, when the tops of mountains are blasted away.

Rather than remove coal from the mountain, MTR removes the mountain from the coal.

Other Coal Mines projects in the world :

• Phulbari Coal Mine - Bangladesh
• Alpha Coal project - Australia
• Carmichael Coal Mine Project - Australia
  

 Coal Power Plants projects around the world :

• Sasan ultra mega power project (UMPP) - India
• Tufanbeyli Coal Power Plant - Turkey
  
• HRL / Dual Gas power station - Australia
• Kusile Coal Power Plant - South Africa
• Medupi Coal Power Plant - South Africa
• TXU Coal Powered Plants in Texas - United States
• Dynegy Coal Power Plants - United States
• Kosovo C Coal Power Plant - Kosovo
• TES 6 Coal Power Plant - Slovenia
• Ostroleka C Coal Power Plant - Poland
• Polnoc Coal Power Plant - Poland
  
• Rybnik Coal Power Plant - Poland
  
• Kozienice Coal Power Plant - Poland
  
• Jaworzno Coal Power Plant - Poland
• Plomin C Coal Power Plant -Croatia
• Stanari Coal Power Plant - Bosnia and Herzegovina
  

 Infrastructure projects :

• Gateway Pacific coal export terminal - United States

The Carbon Principles

The Carbon Principles were adopted by three US banks in February 2008, targeting the financing of new coal power plants in the US.

The Carbon Principles are deeply disappointing. While they contain elements that are useful, they do not address climate change risks of bank financing with the rigor, urgency or ambition that the challenge at hand plainly requires. They actually do not set performance standards to reduce the risks to the climate from their financing, but rather focus on reducing the risks to the banks from climate change and/or the uncertainty around anticipated regulatory responses to climate change. 

For more information on this, please read RAN's latest report "The Principle Matter; Banks, Climate and the Carbon Principles".

"Clean Coal"

Currently, the term "clean coal" covers everything from scrubbers on conventional coal plants to marginally more efficient burning processes to futuristic "near zero emission" technologies that may never be technologically, economically or socially viable.

What the coal industry conveniently omits from its sales pitch is the fact that the entire life cycle of coal is dirty. Before it is burned, coal must be mined, transported and refined. Coal extraction leads to entire moutain ranges destroyed by strip mining; rising rates of asthma and lung disease; water pollution; and the creation of massive amounts of toxic wastes. Coal enthusiasts never mention what it takes to get coal out of the ground in the first place.

Carbon Capture and Sequestration

The concept of CCS (Carbon Capture and Sequestration/Storage) is that we can curb climate change by capturing the emissions from coal plants and storing them underground, safely away from our atmosphere for eternity. The most glaring flow in this concept is that CCS technology is not likely to be a commercially viable option for at least another decade, and new coal-fired plants are slated to begin construction now. There are also no working models of CCS at a commercial-scale power plant anywhere in the world.

To know more on "clean coal" and CCS, you can access the complete RAN factsheet "The dirty truth behing clean coal".

Climate context

Through their lending, investment, and other financial services, commercial banks play an indispensable role in mobilizing and allocating financial resources for the private sector. As such, they are in a unique position to either help further entrench patterns of energy production and intensive energy use that are based on the burning of fossil fuels, or to catalyze the necessary transition to an economy that minimizes GHG pollution and relies on energy efficiency and low/no carbon energy sources. BankTrack believes that with this influential position comes a special responsibility for banks to play a leadership role in addressing the challenges of climate change.

For more information on this, please read the complete BankTrack position paper on banks & climate change.