Coal Body Fumes on ETS Compo, but Green's the New Black

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"It's not easy being regarded as the blackest of black villains when the political and social mood is so resolutely green."

It's not easy being regarded as the blackest of black villains when the political and social mood is so resolutely green.

The coal industry remains totally unpopular, particularly compared with the enthusiasm for renewable energy.

Also, few people understand the details of the government's planned emissions trading scheme but the majority believe it is a good and necessary policy. Little wonder the coal industry finds itself in political purgatory.

At the moment, coal provides around 80% of the nation's electricity supply—57% from black coal, mainly from NSW and Queensland, and the rest from brown coal in Victoria.

That alone makes it an essential provider of Australia's baseload and peak-load energy needs for years to come, no matter the new commitment to 20% renewable energy by 2020 or the increasing importance of gas.

It also ensures that coal-fired power stations are regarded as the country's worst polluters, making them the most visual target of efforts to get that percentage down to help meet even the Rudd government's modest emissions reductions targets.

While the generators will get $3.9 billion worth of free permits for their additional costs, the coal mining industry will get far less. The generators are complaining loudly that the compensation is inadequate and will impede necessary investment for power generation.

The coal industry is in an even greater state of outrage. In the domestic market, marginal mines are more likely to close sooner and others less likely to expand.

Far less appreciated is the importance of black coal exports to Australia's national income as the world's largest exporter of coal. The Australian Coal Association is trying to remind the country that coal is actually the country's biggest export industry, with $46bn worth of exports last year.

But the government, though frustrated in its ambitions to pass its emissions trading bill, is showing little interest in trying to further assist the coal industry as a way of making the legislation more politically acceptable to the opposition.

The coal industry insists it only wants fair treatment and that jobs and communities, as well as the Australian economy, will be badly affected by the proposed changes.

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