Still Burning is a network working against the global hard coal infrastructure.

7.8 Engineering the climate crisis – Siemens’ stake in hard coal

by | 30 Mar, 2021 | Financial System, Transport and Usage

Far more companies than just mine operators and energy companies render extracting and burning of hard coal possible and cost-efficient. If we look at European companies involved in this dirty business, it is not only investors, banks, and insurance companies that must be held accountable.

Let’s take, for instance, the proposed new coal mine at Carmichael in the Galilee Basin in Queensland, Australia (see chapter 5.4). The project could release 700 million tonnes of CO2 per year and is spearheaded by Indian multinational, Adani.

Since Adani cannot provide all the necessary construction and services on their own, they need the support of other companies. SAP, a German software company, procured an Adani Group-wide “business transformation deal”. Professional services firm Ernst & Young, headquartered in London, audits Adani’s Australian operations. French multinational Sodexo provides hospitality and cleaning services for the coal rail construction camps. Siemens, the German industrial manufacturing giant, will supply the corresponding railway signalling technology.

After fierce protests by climate activists worldwide, who referred to the company’s climate protection goals, Siemens reviewed its contract. Ultimately, the top management of Siemens decided to stick to the deal for fear of unlimited liability in case of an ‘arbitrary’ breach of contract. Legal perspectives aside, how ‘arbitrary’ can climate protection be?

“Siemens’ decision to work with Adani is a slap in the face to all the people who have lost their houses, their livelihoods, and their lives because of the extreme weather events that are becoming more common, more intense and more catastrophic than ever before,” says Varsha Yajman, an organiser for School Strike for Climate Australia.

Siemens is never tired of claiming that the mine would go into operation as planned, even without Siemens technology – although the railway line is crucial for the mine’s coal exports and other railway technology companies had already declined to work on the project. Siemens’ management further emphasised that its deal with Adani was only a small contract and nothing in comparison to the company’s efforts to reduce its own CO2 emissions and those of its other customers.

Top management tries to hide the fact that Siemens is – and continues to be – heavily involved in the fossil fuel industry. The central business model of its division ‘Gas and Power’ is enabling power generation from fossil fuels and the extraction and transport of oil and gas. Siemens also supplies electronic equipment to coal-fired power plants. For years, Siemens has been lobbying the OECD against restrictions on state-export subsidies for coal-fired power plants.

“If all companies had a carbon footprint similar to Siemens, the climate would rise by 4.5 degrees Celsius by 2050”

While Siemens has pledged to be climate neutral by 2030 with regard to its own businesses, 92 percent of Siemens’ greenhouse gas emissions arise in its supply chain. “You could go carbon neutral tomorrow, but if you keep helping other companies massively increase carbon emissions, it is not going to make any difference”, Varsha Yajman told Siemens’ board members at the 2020 shareholders’ meeting.

Siemens is involved in various existing hard coal mining operations. Siemens’ Colombia report states that its technology not only contributes to the generation of 40 percent of the country’s gas and coal-based electricity, it also shows that 40 percent of El Cerrejón mine’s transport fleet is equipped with Siemens technology. El Cerrejón coal mine is known to be one of the world’s biggest climate killers and human rights violators (see chapter 5.3).

With a major contract worth €100 million, Siemens was also involved in the supply and installation of cables, lighting equipment, transformers, and other electronic equipment at the Kusile power plant in South Africa. In 2007, an environmental impact assessment, commissioned by South African energy supplier Eskom, warned that agricultural irrigation would be severely affected by the power plant. A year later, the South African government officially acknowledged that pollution levels in the Kusile region were high – the world’s second worst sulphur dioxide emission hotspot and the third largest nitrogen dioxide hotspot in the world, according to Greenpeace.

Studies have highlighted the connection between air pollution in the region and the increased incidence of silicosis and other respiratory diseases. Carbon particles in the air affect the respiration, nervous system, and cardiovascular system of large parts of the local population.

Siemens even pushes new coal projects, like the 2,000 MW Jawa 9 and 10 coal-fired power plants in Indonesia – in collaboration with Doosan Heavy Industries from Korea. Siemens Bank is to secure the financing for the project. Yuyun Indradi from Trend Asia reports that air pollution in Jakarta is already enormous. “It is it difficult for people to breathe. The pollution causes respiratory diseases and premature deaths. One of the sources of pollution is the Jawa 1-8 power plant units already in operation and many other coal-fired power plants in and around Jakarta. If the additional units Jawa 9 and 10 are built”, Yuyun Indradi warns, “this problem will be aggravated, and the livelihoods of neighbouring fisher will also be threatened”. A Greenpeace report modelling the health impacts of the project found that Jawa 9 and 10 will cause 4,700 premature deaths over its lifetime.

The Carbon Tracker Initiative estimates that in 2020, construction of new renewable energies in Indonesia could already be less expensive than building new coal-fired power plants. By 2027 it could be cheaper to build renewable energy power plants than to operate existing coal-fired power plants. Siemens, on the other hand, is entrenching Indonesia’s dependence on coal-fired power plants for decades to come.

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