In recent years, it’s been safe to assume that the use of traditional fossil fuels has rapidly decreased. With the rise in sustainable energy alternatives and the increased education on the impact of dangerous fossil fuels, more and more industries are making the switch - both to help protect the planet and to protect their own business values too.
However, recent findings have shown that the use of coal as fuel is still a thriving industry, with enormous mining operations and distribution processes happening around the world. From the Asian countries of Japan and South Korea to the ports of Australia, coal extraction operations are being supported and funded as a source of cheap, accessible energy.
Why are industries still relying on coal extraction for their energy?
Although the harmful impact of coal as a source of energy is clear, for many industries, businesses, countries and cities, it’s considered a reliable and affordable resource - one that can be easily accessed and procured.
Often in emergency situations, national power suppliers will turn to coal as a last resort, such as throughout the recent heatwave in the UK. Earlier this month, the National Grid opted to use coal as an energy source to help support the increased use of air conditioners and fans in operation at the time. Both businesses and domestic spaces were relying on the power grid to keep their spaces cool, and with sustainable energy supplies running low, coal was the next alternative.
Other countries and industries can also be linked to increased use of coal extraction and demand. From technical faults in the North Sea Link electricity connector to the slow winds and maintenance demands of solar farms in Scotland, the demands of the public have increased, whilst sustainable resources have shrunk.
Who is funding coal extraction and production?
With so much demand for coal energy, it’s important to understand just who is funding the mining operations to supply it. According to financial reporter BankTrack, it’s estimated that ‘commercial banks have channelled US$ 1.5 trillion into the coal industry since 2019.’ Their research has discovered a Global Coal Exit List with over 1000 businesses listed as being involved in or funding the mining and production of coal. From trading and transport to the manufacturing of coal plants and the mining equipment supplied, these banks, businesses and commercial organisations have all had a hand in the continued usage of fossil fuels in 2023.
In terms of geographic location, coal mining operations are, unsurprisingly, funded by some of the richest countries in the world, including the UK, Canada, the US, China, India and Japan. These countries are responsible for over 80% of coal financing and investment, with the US taking the largest share of the investment by far.
‘With shares and bonds totalling US$ 688 billion, US investors account for almost 56% of institutional investments in the global coal industry.’ - Urgewald, BankTrack
While this may seem like a large figure, however, what’s even more important to note is the small number of countries involved in this industry. Only 6 countries out of 195 fund harmful and dangerous coal mining and distribution operations, and while their countries may be wealthier, they are more than outnumbered by their more sustainable counterparts.
Why are commercial banks funding coal production?
A new coal production operation is going to be a costly process, with different insurance fees, workers' wagers, construction costs, conversion costs and distribution fees all mounting up. Commercial banks in some of the wealthier countries of the world can offer generous funding for these operations, with some hefty interest rates added to the repayment plan.
The longer the project is, the higher the interest rates, meaning the banks can make huge returns on their investment - despite the larger costs to the environment.
To find out more about using sustainable energy alternatives in your business or transforming your land into a site of sustainable energy operation, speak to one of our team today.