By Jason Benz Bennee @ Shutterstock.com
Despite wall-to-wall coverage of the global green agenda, governments in many countries are relying on coal not only for power generation but for filling budget demands. Rhiannon Hoyle reports in The Wall Street Journal:
Some major coal-exporting countries are reaping the benefits of higher demand for the fossil fuel after sharply raising levies on miners with plans to direct the windfall to everything from hospitals to roads, welfare programs to power-system upgrades.
Increased coal taxes and royalties—payments for the right to extract resources—are expected to add billions of dollars combined to government coffers in three of the world’s biggest exporters, Australia, Colombia and Indonesia, as a global energy shortage delays some countries’ efforts to quit coal. Annual coal demand likely surpassed 8 billion metric tons for the first time in 2022 as Europe sought more coal to replace Russian natural gas, leading prices in many parts of the world to more than double.
Taking a larger share of coal miners’ profits is helping repair state budgets hard hit by the Covid-19 pandemic, and pay for retraining of coal-sector workers and other projects to diversify away from coal. On Tuesday, the Queensland government in Australia said increased coal-royalty revenue would help fund a $3.3 billion power-transmission line that it hopes will encourage investment in both renewable energy infrastructure and critical minerals projects.
Some companies, though, say the taxes and royalties are deterring investment in new and existing mines, which they argue could hurt local economies in the long run and pressure a commodity that will remain crucial as the world transitions to cleaner energy.
In Colombia, coal miners are among the hardest hit by tax reforms introduced this year by the new leftist president, Gustavo Petro. The changes in Colombia come as Mr. Petro calls fossil fuels “a poison” and vows to end their use.
“He is not a friend of coal mining,” Andrés Mojica, a community leader in the heart of Colombia’s coal fields, said of Mr. Petro. “But he is a friend of its royalties.”
Last year, officials also raised royalties on windfall profits in Indonesia and Australia’s Queensland state. Lawmakers in coal-rich regions of the world say they are trying to ensure maximum benefit from their coal resources.
“You can only dig up coal once,” said Cameron Dick, treasurer of Queensland in Australia’s tropical northeast. “When the price for that resource is setting records, then the people of Queensland deserve a reasonable and fair return on that resource because, at its very heart, that resource belongs to them.”
Australia is the second-largest exporter of coal, after Indonesia. And Queensland is the world’s largest shipper of coal used to make steel, as well as a big exporter of the commodity for electricity generation. Even Colombia’s small mines are exporting to energy-hungry Germany.
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