Climate ideals clash with coal realities at Polish-led U.N. talks

* Coal bosses say coal needed for now

* Big business seek to address investment risk

* Coking coal for steel seen as a strategic mineral

By Barbara Lewis

KATOWICE, Poland, Dec 14 (Reuters) - Delegates at U.N. climate talks in the Polish city of Katowice point to the mining museum next to the conference venue as the proper place for coal, which provides 80 percent of the country's electricity.

Poland's decision to host the negotiations to revive the 2015 Paris agreement on phasing out fossil fuel has laid bare the tension between high-minded goals and business realities.

A short drive from the conference venue, at the Silesian region's dozen or so remaining mines, tonnes of freshly dug coal thunder down shoots to be rail-roaded to power plants for carbon-intensive generation.

Coal bosses see a need to address climate risk, but say Poland must use thermal coal for electricity until it has a better option.

Silesia also produces coking coal, used in steel, and viewed as a strategic mineral even by the European Union, which seeks to be an environmental leader.

Poland's JSW, the European Union's largest coking coal producer, is seeking to grow.

"The world has to tackle the increase of carbon dioxide emissions, but I do not see a chance the world can live without steel these days and there is not an easy solution to substitute steel and substitute coking coal," CEO Daniel Ozon told Reuters.

Financial backing can be an issue for all forms of coal and JSW has its eye on Chinese banks as international lenders are wary.

GENERATION GAP

For many Poles, coal mining symbolises national independence.

State-dominated companies can look to a government striving to win over an electorate divided between an older generation that associates coal with a reliable income and a sense of community, and youths engaged in climate protests.

As the demonstrators march, international business works to keep shareholders on side.

One of the climate team from the world's biggest producer of coking coal BHP was among business representatives taking part in the side events accompanying the negotiations.

The U.N. talks have proved long and fractious, with flash-points including a revolt by Saudi Arabia, Russia, the United States and Kuwait against a major scientific report that laid out the reasons to limit global warming to 1.5 degrees Celsius.

"The real challenge is not whether it's 2 degrees or 1.5 degrees; it's that not enough is happening," Graham Winkelman, BHP's practice lead on climate change, said in an interview.

BHP stands apart from other big miners with a goal to make its own operations carbon neutral, in line with the Paris agreement, by the second half of the century.

But just as governments have to work out practicalities, it is also unclear how BHP can achieve its goals.

"There is no definitive path-way," Winkelman said, although he repeated a frequent industry request for a carbon price to help shift investment towards a greener technology.

Poland's aim is to share the challenges of bringing about a "just transition", Polish Deputy Environment Minister Michal Kurtyka, who presided over the talks, said.

As a graduate of Paris' elite Ecole Polytechnique, a physicist, an economist and an engineer, his favoured solution is electric vehicles. With fewer moving parts and less wasted heat than internal combustion engines, he says they will help even if they run on coal-fired power.

As a citizen of a country that switched in 1989 from "a centrally planned to a market economy," Kurtyka has first-hand experience of deep change.

"In my young days, growing up in Krakow, that was a completely different city from now. At 8 p.m. the lights switched off. You could not open the window because of air pollution," he said.

In Katowice, some residents say they still can't let the air in and are not confident that is about to change.

(Additional reporting by Anna Koper and Agnieszka Barteczko Editing by Susan Fenton)

2018-12-14 14:02:48

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