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Coal in the crosshairs in Europe but fuelling emerging markets

– India tops US –

Other emerging market nations are following on China’s heels.

India, which is investing massively to expand its electricity output, saw coal use jump by 11 percent last year after rising by nearly seven percent in 2013.

Last year it passed the United States in coal consumption by volume to account for 74 percent of electricity generation.

Increasing reluctance by Western banks to fund coal mining projects has failed to curb India’s coal drive.

Earlier this year India’s Adani Group brushed aside a decision by a dozen European and US banks not to fund huge coal industry projects in Australia’s Galilee Basin near the Great Barrier Reef, saying it had “no bearing” on the company.

In addition to Asian emerging markets, demand for coal is expected to increase in Japan and South Korea due to new power plants coming on line.

“Although the contribution that coal makes to energy security and access to energy is undeniable, I must emphasise once again that coal use in its current form is simply unsustainable,” said van der Hoeven.

A recent study published in the journal Nature said that over 80 percent of coal reserves must be left untouched until 2050 to meet the UN target of limiting warming to 2.0 degrees Celsius (35.6 degrees Fahrenheit) over pre-Industrial Revolution levels to save Earth’s climate from potentially catastrophic damage.

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Price continues to play in coal’s favour as mining companies have cut production costs.

So far experiments in a number of countries to put a price on carbon in an effort to harness market forces to encourage efficiency and use of less-polluting fuels have largely failed.

But six energy companies, which usually oppose carbon pricing, in the past week publicly endorsed such schemes.

“We firmly believe that carbon pricing will discourage high carbon options and reduce uncertainty that will help stimulate investments in the right low carbon technologies and the right resources at the right pace,” said the chief executives of BG Group, BP, Eni, Royal Dutch Shell, Statoil and Total in a joint letter.

The call by companies came as efforts were underway to breathe life into talks aimed at reaching a deal on a new UN climate pact ahead of a crucial conference in Paris in December.

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