Australian and European coalmining regions have a lot in common, long histories, resilience and sense of identity.
By utilising these strengths, communities in coalmining areas can not only survive, but thrive in the renewable energy and zero carbon industry revolution that is already well underway as coalmining declines.
In the wake of COVID-19, Europe is determined to get three things right with one shot: drive its carbon emissions to net zero by 2050, boost its economic growth and reduce inequality across the continent through a European Green Deal.
Part and parcel of this on the path towards carbon neutrality is the transition away from coal. Two of the big barriers used to be the high cost of renewable energy and the significant coal generation on the continent. That has changed.
Wind and solar are now cheaper than conventional electricity generation. Last year coal demand in the European Union dropped by 19 per cent and phase outs are happening across much of Europe, including Germany, Spain, France and Italy.
While the UK has left the Union, it continues to be one of the key European decarbonisation champions. In eight years it reduced its coal generation from 40 per cent to almost zero and announced final coal closure in 2024. At the same time, it became a global leader in offshore wind power.
Coal regions are focusing more on the social consequences of coal closure that led to the establishment of the Just Transition Mechanism - a combination of knowledge sharing and financial support. The initial idea of simply retraining coal sector workers and compensating them if they lose their jobs is evolving into something more ambitious. The idea to turn coal regions into low-carbon industrial zones is emerging.
Australian coalmining communities cannot afford to be left behind. The unique circumstances that coal communities find themselves in could hold the key to unlocking the jobs and economic benefits of renewable energy, including in pumped storage hydro, large-scale solar and renewable hydrogen.
Coal regions offer valuable assets for the low-carbon transition. They have large consolidated areas of land that are not suitable for agriculture, strong power grids, transport and social infrastructure and workers with high technical or engineering qualifications.
The Joint Research Centre, the research arm of the European Commission, concluded that the photovoltaic solar potential of the European coal regions equals their current coal power generation, making coal regions excellent locations for cheap solar energy and green hydrogen. Such a combination could create the nuclei for new low-carbon industrial zones that would cluster the industries of the future and support the reduction of their emissions in line with the 2050 carbon neutral target.
Low-carbon industrial zones developed in coal regions offer a triple solution.
With Australia's abundant sun, there is no reason why coalmining regions such as the Hunter cannot experience even greater benefits. Already we have seen the first pilot renewable energy zone in the Central West generate proposals for an incredible 27 gigawatts of projects valued at $38 billion.
Low-carbon industrial zones developed in coal regions offer a triple solution. They keep jobs, boost competitiveness and reduce carbon emissions. In other words, they push climate mitigation and economic progress forward without the negative social impact that many fear when it comes to accelerated energy transition.
Europe has a long history of transitioning coal regions. Some of the stories are smooth, others acrimonious. Margaret Thatcher's battle with the trade unions and the coal industry in the 1980s left deep scars and social and political divisions. But coal regions in Belgium and the Netherlands were closed with much more cooperative and planned approach that led to the creation of successful economic zones. The German Ruhr Valley used to have 500,000 miners working in almost 200 mines.
In 2018, the last hard coalmine was closed and now the Ruhr Valley is a successful modern industrial region. In 1996 Poland established the Katowice Special Economic Zone which has attracted so far 8.4billion euros. Its development was not directly linked to coal phase-out but it has created many industrial jobs that offer attractive alternatives to workers from the coal sector.
Now the combination of dying coal, its inherited infrastructure, the low and constantly declining cost of renewables, the European industrial ambition and the massive economic stimulus package could trigger a perfect positive storm for the coal regions. The trend can spread globally.
Around the world there are coal regions facing regulatory pressure, severe financial difficulties, public rejection or all of that.
The EU is also planning to introduce a Carbon Border Adjustment Mechanism, called by some a carbon tax, that will affect supply chains across the globe. IMF suggested that $US70 carbon tax by 2030 would be the right thing to do. In this environment it is essential that countries reduce their risks of stranded assets and impoverished coal regions.
Turning the assets of the coal regions into assets of the future zero-carbon industry is an economic and social opportunity that should not be missed.
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