Coal in the UK is in terminal decline. The fuel that powered the industrial revolution and has been a staple of our economy for over a century is on its way out. Recent Carbon Brief analysisfound that last year coal use more than halved. This in turn contributed to an impressive six per cent annual fall in carbon emissions. Excluding the general strikes in the 1920s, emissions are now at the lowest level since the Victorian era.
But the job of phasing out coal from our energy mix is not complete. There are still eight coal-fired power stations on the British grid, with a combined capacity of around 14GW. In 2015, Bright Blue recommended that the Government regulate to close these last coal plants in the early 2020s. A few months later, the government adopted this policy and has just now finished consulting on its proposals to force their closure by the end of 2025.
This sharp decrease has several probable causes: anticipation of the 2025 coal phase-out, the abundance of relatively cheap gas, the build-out of zero-marginal-cost renewables, and the UK's 'Carbon Price Support', which charges power generators for each tonne of carbon they emit. But there is another factor that has helped to make the economics of coal challenging, over which EU Ministers are soon to make a decision at the European Council: the EU's 'Industrial Emissions Directive'.
The Industrial Emissions Directive (IED) came into force at the start of 2016 and its aim is to reduce harmful air pollution from industry. It sets legal limits on the levels of nitrogen oxides, sulphur dioxide, and dust that large plants can emit. Of the highest emitting 30 plants affected by the IED, 26 are coal-fired power stations.
The damage to public health from coal is significant: across all EU Member States, air pollution from coal is estimated to contribute to nearly 23,000 deaths each year with a health bill ranging from €32bn to €62bn. But the IED is not realising all the promised emissions savings. Over half of coal plants in the EU have been given special 'derogations' by the EU, meaning that they do not need to apply them.
Under the policy, national governments must issue permits to all plants affected by the IED. These permits are issued with reference to guidelines that are set out in the EU's 'Best Available Technique Reference Document' (BREF). This document is currently being reviewed, and the European Council is soon to vote on proposals to amend the BREF that would make the application of the IED by national governments more stringent.
Put simply, if these proposals are accepted, many more plants will have to choose whether to make expensive upgrades in order to cut their emissions, or simply to close. The upgrade costs could be substantial: in the UK, government-commissioned research found that for a 500 MW coal plant, the cost of compliance would typically be between £50m and £75m.
So in many cases, this investment decision will lead to plant closures, with the investment generating insufficient returns to justify the costs. The three factors named above (cheap and plentiful gas, zero-marginal-cost renewables, and carbon pricing) assist and reinforce this dynamic.
With the UK's support at the European Council, it is expected that the proposals will be passed through qualified majority voting. However, without the UK's support, they are vulnerable to defeat. For this reason, the decision of UK Ministers is absolutely critical to the pace of the coal phase-out in Europe.
Not only would these regulations help to hasten the closure of the remaining coal plants in the UK. But they could help to bring about the end of coal generation throughout EU. The benefits would be great. In relation to climate, it would greatly reduce EU greenhouse gas emissions, for which coal is responsible for 16 per cent of the total. In relation to air pollution, the proposed new BREF would reduce the number of premature deaths from coal-related air pollution to under 9,000.
Supporting and championing these tougher environmental regulations is an opportunity for the UK to demonstrate international leadership post-Brexit. By committing to phasing out coal by 2025, the UK became the first industrialised country to burn coal for electricity and the first to commit to closing its coal fleet. We have recommended before that this significant domestic legacy should be leveraged internationally, in order to make a major contribution to reducing global emissions and tackling climate change.
In its coal phase-out impact assessment, the government listed UK international climate change leadership as one of the policy's main benefits. In the European Council, the UK has an opportunity to realise some of this benefit. It should seize it.
Sam Hall is a senior researcher at Bright Blue
This article first appeared on BusinessGreen