GHG Daily
1/29/2016
Environmental-related risks could strand thermal-coal assets worldwide, a recent analysis conducted by the Smith School of Enterprise and the Environment at the University of Oxford has found. These risks, including air pollution, the effects of climate change, and the policies being implemented to address these issues, spell uncertainly for the global thermal coal industry as nations call for a shift to cleaner energy. Significant investments are still being made in coal, investments that will not be recoverable, or will be stranded, if that coal is deemed unusable.
“We find that the environment-related risks facing the thermal coal value chain are substantial and span physical environmental impacts, the transition risks of policy and technology responding to environmental pressures, and new legal liabilities that may arise from either of the former,” according to the study.
The study also states that while carbon capture and storage has been hailed as a lifeline for the coal industry, the technology’s development has been to slow to make a significant impact. “It is our view that CCS is unlikely to play a significant role in mitigating emissions from coal-fired power stations. Deployment of CCS has already been too slow to match IEA and IPCC scenarios. CCS compares unfavourably with other power sector mitigation options, especially considering that CCS also reduces plant efficiency, exacerbating existing merit-order challenges for conventional generators,” according to the study.
