An Important Step Towards Decarbonisation Of Steel Industry
In its first iteration, 160 global companies have been added to the MCEL
With advances in steel making technology, countries and companies are being asked to move away from carbon intensive manufacturing processes. In an effort to jump start that process, Urgewald, a global financial watchdog, is launching a global Metallurgical Coal Exit List (MCEL) in order to support investors and financial institutions to highlight the risks involved in financing metallurgical coal( expansion.
The list acts as a go-to resource for investors and financial institutions to develop or sharpen policies against investing in companies with met coal mine expansion plans.
In addition to 19 Indian companies added to MCEL from the Global Coal Exit List, four new metallurgical coal companies showed up on Urgewald’s radar – ACC, Bengal Energy Ltd, Bull Mining Pvt Ltd, and Terri Mining Pvt Ltd. Coal India Limited is the world’s second-largest met coal developer and simultaneously the second-largest met coal producer worldwide.
In its first iteration, 160 global companies have been added to the MCEL. Altogether, these companies are pursuing 252 met coal expansion projects in 18 countries. The planned production from new and extended met coal mines would equal 551 million metric tons annually and increase the world’s current met coal production by 50%.
MCEL is initiated by Urgewald co-published with 10 other organisations that are calling on investors to stop funding metallurgical coal mine expansion projects.
Today, Urgewald and 10 NGO partners published the first Metallurgical Coal Exit List (MCEL), a public database of coal companies which are expanding their metallurgical coal mining activities. “Hundreds of financial institutions are already using our Global Coal Exit List (GCEL) to restrict their financial flows to the thermal coal sector. The MCEL is a new sister database that focuses exclusively on metallurgical coal and highlights which companies are planning new metallurgical coal mines or extensions. Financial institutions need to wake up and stop bankrolling the reckless expansion of this industry,” says Heffa Schuecking, Director of Urgewald.
This year the Paris Agreement will celebrate its 10th anniversary, but the 1.5° C target has never seemed further out of reach. Current climate protection efforts are failing and real progress must include sectors often deemed difficult to decarbonize — like the steel industry. Due to its reliance on coal, the iron and steel sector is responsible for 11% of global CO2 emissions.Coal used by the steel industry is referred to as metallurgical (met) coal and includes coking coal, which is needed to produce coke, a key ingredient in blast furnace steel production. While steel was long considered to be a hard-to-abate sector, new technologies now enable the shift to coal-free steel production methods. According to the think-tank Agora Industry, a phase-out of coal in the steel sector by the early 2040s is technically feasible.2 “Recent advancements in green steel production give us the chance to transform steel from a hard-to-abate industry into a fast-to-abate industry and end its dependence on coal. New mettalurgic coal mines are harmful for our climate and endanger the Paris goals,” says Schuecking.
According to the International Energy Agency (IEA), existing production sources can cover the demand for met coal through 2050.3 Even the Critical Raw Material Alliance acknowledges that global met coal production already surpasses demand by 37%.4. Many of the largest Many of the largest metallurgical (met)coal miners are, however, still planning to expand their production. All in all, MCEL identifies 160 mining companies which are pursuing 252 met coal expansion projects in 18 countries. The planned production from new and extended met coal mines would equal 551 million metric tons per year and would increase the world’s current met coal production by 50%.
Our data reveals that most met coal expansion projects—and the companies behind them—are concentrated in Australia, Russia and China. Australia is the world’s largest met coal exporter, and India and Japan are among the primary destinations of its exports. Japan’s largest steelmaker, Nippon Steel, holds a strategic stake in the Australian Bulga coal mine to ensure a steady supply of its raw material.6 Following suit, India’s JSW Steel recently announced its purchase of a stake in Illawarra Metallurgical Coal’s Australian coking coal mines.7 The following graphic provides an overview of the regional distribution of companies which are still expanding their met coal operations.
The writer of this article is Dr. Seema Javed, an environmentalist & a communications professional in the field of climate and energy
