Australia’s resources minister Keith Pitt said on Tuesday that the country’s superannuation funds should be free to support new coal projects. The comment came in the midst of increasing pressure from environmental group the Australian Conservation Foundation (ACF) for limiting the funding for new thermal coal mines as part of the global energy transition.
Two superannuation funds
Australia’s two big retirement funds, also known as superannuation funds are QSuper and Sunsuper. The two funds are planning a merger and will have a combined A$200 billion ($152.64 billion) under management. Both funds are also members of the Climate Action 100+ Group of Investors.
New coal projects at Hunter Valley
According to a report by progressive think tank the Australia Institute found last week, the coal industry in New South Wales had proposed 23 new coal mines and mine extensions, translating to a combined additional annual production of more than 155 million tonnes.
However, as part of the global energy transition, there has been growing pressure on institutional investors to limit funding for the new mines in the key Hunter Valley mining region of New South Wales.
On Tuesday, former prime minister Malcolm Turnbull, who supported a moratorium on new coal mines in the Hunter Valley, was dropped from chairing a board that would oversee New South Wales’ energy transition.
ACF against funding for new projects
The environmental group the Australian Conservation Foundation (ACF) has urged its members to call for the two superannuation funds to better account for their energy transition policies.
An ACF spokesman said that investors should exit thermal coal altogether by 2030. He commented: “At the moment the priority is not investing in new coal, oil or gas … investors need to be completely out of thermal coal by 2030.”
Government stance favour coal projects
Australia’s resources minister Keith Pitt announced that the superannuation funds should be free to support the coal industry’s expansion plans, citing the significant revenue from coal and the high employment supported by the industry.
Pitt said: “The coal industry employs over 60,000 Australians and generates billions for the state and national economies and is forecast to continue doing so for decades to come. Suggestions that two major superannuation funds, QSuper and Sunsuper, should abandon coal will deprive hundreds of thousands of members of a good investment option.”
Australia is the world’s top coal exporter. However, it had increasingly failed to commit to targets aligned with the Paris Agreement on climate change which included committing to net zero carbon emissions by 2050.
