A group of 11 environmental and human rights organizations have urged global financial institutions to stop financing metallurgical coal projects as the world is already oversupplied with the materials.
Seven Indonesian coal companies have recorded plans to expand their business by developing metallurgical coal, which is one of the raw materials for the steel industry. In fact, with the world now oversupplied, the expansion of metallurgical coal mines is no longer needed.
Urgewald and 10 global non-profit organizations published the Metallurgical Coal Exit List (MCEL), a comprehensive public database listing global metallurgical coal companies, to drive transparency in a sector that is often overlooked in decarbonization efforts.
Seven Indonesian coal companies and their 17 subsidiaries are included in the list, namely PT Adaro Energy Indonesia, PT Petrindo Jaya Kreasi, PT Atlas Resources, PT Sinar Mas, Cokal Ltd, PT Transcoal Minergy, and PT Singlurus Pratama.
According to the list, 160 companies are working on 252 metallurgical coal mine expansion projects in 18 countries, including Indonesia. The planned additional production from these expansions reaches 551 million tons per year and will increase global metallurgical coal production by 50 percent.
According to the International Energy Agency (IEA), current metallurgical coal production is capable of meeting demand until 2050. In fact, the Critical Raw Materials Alliance states that metallurgical coal production is already 37 percent higher than demand.
On the other hand, thanks to technological developments, the steel industry can now switch to coal-free steel production methods. According to Agora Industry, technically, the steel industry can abandon the use of coal as early as 2040. So far, due to its reliance on coal as one of its key raw materials, the iron and steel sector is responsible for 11 percent of global CO2 emissions.
“Recent developments in green steel production open up opportunities for the hard-to-decarbonize steel industry to rapidly cut emissions and end dependence on coal. New metallurgical coal mines would harm the climate and threaten the Paris Agreement targets,” Heffa Schuecking, Director of Urgewald, said as quoted in a statement on Thursday, January 30, 2025.
MCEL, Schuecking said, aims to highlight which companies are planning to open new mines or expand existing metallurgical coal mines. The hope is that financial institutions can use this list as a reference to stop financing blind expansion in the coal industry.
“Most coal producers are trying to clean up their public image and maintain access to financing by adding metallurgical coal to their portfolio. However, metallurgical coal accounts for 13 percent of total coal production, and financial institutions are finally referring to it in their coal policies,” Lia Wagner, Head of Met Coal Research at Urgewald, said.
Reclaim Finance, a non-profit organization that regularly analyzes 386 major financial institutions, noted that 183 financial institutions have adopted policies related to thermal coal. However, of these, only 16 financial institutions have policies on metallurgical coal. One of the best, Zurich of Switzerland, has excluded metallurgical coal mines and the companies that develop them from its financing list.
“From a climate perspective, coal is still coal and its utilization must end. The technology to decarbonize steel production is available and ready to be used by first movers in the industry. Financial institutions should support the coal-free steel transition instead of continuing to support companies that build dirty new metallurgical coal mines,” Cynthia Rocamora, Private Finance Campaigner at Reclaim Finance, said.
