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West Cumbria Mining Called-In Planning Application
West Cumbria Mining Called-In Planning Application
A Additional LI Documents 07.09.2021 ID1 - Addendum to the Steel
and Metallurgical Coal Expert
Report by Wood Mackenzie 1 - 22
07.09.2021 ID2 - West Cumbria Mining Limited (WCM) Opening
Statement
23 - 44
07.09.2021 ID3 - Cumbria County Council (CCC) Opening Statement 45
- 47 07.09.2021 ID4 - Friends of the Earth (FoE) Opening Statement
48 - 63 07.09.2021 ID5 - South Lakes Action on Climate Change
(SLACC)
Opening Statement 64 - 80
07.09.2021 ID6 - FOE-DB-3 Derik Broekhoff Supplemental Rebuttal
Proof of Evidence
81 - 94
07.09.2021 ID7 - FOE-DB3-01 to 07 Appendix 1-7 of Derik Broekhoff
Supplemental Rebuttal Proof of Evidence
95 - 273
08.09.2021 ID8 - SLACC-RD-1S Rebeka Diski Summary Proof 274 - 279
09.09.2021 ID9.1 - WCM Factsheet - Apprenticeships 280 - 281
09.09.2021 ID9.2 - WCM Factsheet - Education 282 - 283 09.09.2021
ID9.3 - WCM Factsheet - Employment 284 - 285 09.09.2021 ID9.4 - WCM
Factsheet - Underground Teams 286 - 287 09.09.2021 ID9.5 - WCM
Factsheet - Working Underground 288 - 289 09.09.2021 ID10.1 - WCM
Project Facts Part 1 290 - 290 09.09.2021 ID10.2 - WCM Project
Facts Part 2 291 - 291 09.09.2021 ID10.3 - WCM Project Facts Part 3
292 - 292 09.09.2021 ID11 - WCM (Holdings) Limited Annual Report
for the Year
ended 2020 293 - 324
325 - 334
09.09.2021 ID13 - FOE-DB3-01 Appendix 1 (full article) (for the
parties ONLY)
335 - 340
09.09.2021 ID14 - Article - Open Democracy UK, Rebecca Diski dated
12.02.2021
341 - 346
09.09.2021 ID15 - NOMIS Official Labour Market Statistics for
Copeland 347 - 357 09.09.2021 ID16 - English Indices of Deprivation
2019. 358 - 388 10.09.2021 ID17 - Index of Deprivation for Cumbria
- Jan 2020 389 - 417 09.09.2021 ID18 -
WCM-Project-Update-January-2020 418 - 449 10.09.2021 ID19 FOE-JB3 –
Rebuttal Proof of Evidence of John Barrett 450 - 456
(climate change) 10.09.2021 ID20 FOE-JB3-1 to FOE-JB3-7 (Appendices
1 to 7) 457 - 513 10.09.2021 ID21 SLACC-BW-3 Watson Rebuttal and
Appendix
10.09.2021 514 - 526
527 - 622
10.09.2021 ID23 SLACC-PE-4 Ekins Rebuttal and Appendix 10.09.2021
(For Parties)
623 - 652
10.09.2021 ID23 SLACC-PE-4 Ekins Rebuttal and Appendix 10.09.2021
(For Website)
653 - 682
13.09.2021 ID24 Email from West Cumbria Mining re WCM Coal
Specification (dated 21 September 2020 1325)
683 - 683
14.09.2021 ID25 WCM Target Coal Specification Email (dated 30 July
2020 811) and attached 2020 Specification
684 - 685
14.09.2021 ID26 EC Critical Raw Materials 2020 686 - 709 15.09.2021
ID27 Article - Conflating Queenslands Coking and Thermal
Coal Industries, Simon Nicholas dated June 2019 710 - 754
24.08.2021 ID28 Supplement – Base Sc. Results – Coal Cumbria mine
evidence E3M Final 24.8.21
755 - 758
16.09.2021 ID29 SLACC-PB-3 Rebuttal Proof of Evidence Paul Bedwell
and appendices
759 - 796
16.09.2021 ID30 Tata Steel Hydrogen Announcement 15.09.2021 797 -
798 16.09.2021 ID31 Article What went wrong Learning from three
decades
of carbon capture, utilization and sequestration (CCUS) pilot and
demonstration projects Wang, 2021
799 - 806
16.09.2021 ID32 Character and Appearance RTA Agenda 807 - 807
16.09.2021 ID33 Whitehaven Landscape SoCG - final, signed
(16.09.2021) 808 - 816
16.09.2021 ID34 Whitehaven Schedule of Landscape and Visual Effects
817 - 822 16.09.2021 ID35 Site Visit Itinerary V.4 823 - 825
16.09.2021 ID36 WCM Public Inquiry Site Visit Risk Assessment 826 -
830 16.09.2021 ID37A Extracts of Landscape Evidence for Roundtable
-
Friends of the Earth 16.9.21 831 - 885
17.09.2021 ID37 Minutes of a Meeting of the Development Control and
Regulation Committee 02.10.20 at 9am
886 - 934
21.09.2021 ID38 - Article "Efficiency stagnation in global steel
production urges joint supply- and demand-side mitigation efforts",
Wang 2021
935 - 945
23.09.2021 ID39 - The Sixth Carbon Budget Methodology Report 946 -
1285 23.09.2021 ID40 - Letter from SBEC (on behalf of SLACC)
regarding 1286 - 1292
pipe-jacking 23.09.2021 ID41 - IEA - Coal Information: Database
Documentation
(page 81), "Coal Classification" 1293 - 1293
23.09.2021 ID42 - WCM/ST/5 - Additional Rebuttal Proof of Evidence
of Samuel Thistlethwaite
1294 - 1301
24.09.2021 ID43 - Prime Minister's speech at the UN General
Assembly 1302 - 1306 24.09.2021 ID44 - Article - "How carbon
capture, usage and storage
could help 'level up' across the UK", LSE 1307 - 1310
24.09.2021 ID45 - Article Summary - "Policy brief: Seizing
sustainable growth opportunities from CCUS in the United Kingdon",
LSE
1311 - 1318
27.09.2021 ID46 - S106 Agreement - 23.09.21 1319 - 1488 27.09.2021
ID47 - S106 Comparison Document 24.09.21 1489 - 1614 27.09.2021
ID48 10003-L002Rev01 Response to SBEC pipe-jacking
comments 1615 - 1618
1619 - 1619
27.09.2021 ID50 - Biodiversity RTS Agenda 1620 - 1620 27.09.2021
ID51 - Conditions Schedule - All Parties - Comments -
27.09.2021 1621 - 1656
27.09.2021 ID52 - WCM Proposed New Conditions 1657 - 1659
27.09.2021 ID53 - Appendix A - List of Conditions 2nd October 2020
1660 - 1704 27.09.2021 ID54 - Culvert_Tunnel_Sections 27_9_21 1705
- 1705 27.09.2021 ID55 - Ecology Statement of Common Ground
27.09.2021 1706 - 1710 28.09.2021 ID56 - Collaboration - UN Climate
Change Conference
(COP26) at the SEC – Glasgow 2021 1711 - 1713
28.09.2021 ID57 - Article - UKRI - UK Invests over £30m in
large-scale greenhouse gas removal dated 25.04.2021
1714 - 1721
28.09.2021 ID58 - Article – Climeworks begins operations of Orca,
the world's largest direct air capture and CO2 storage plant dated
08.09.2021
1722 - 1726
28.09.2021 ID59 - Article - Financial Times - Carney task force
confronts concerns over carbon credits market dated
27.01.2021
1727 - 1730
28.09.2021 ID60 - Letters of Support from the Steel Industry 1731 -
1735 28.09.2021 ID61 - Note on Methane Emissions from Construction
of
Drifts 1736 - 1738
29.09.2021 ID62 - PPG Climate change - GOV.UK 1739 - 1749
29.09.2021 ID63 - Article - Dutch CCS project scrapped after Tata
Steel
opts for hydrogen DRI production route, James Burgess 1750 -
1750
dated 21.09.2021 29.09.2021 ID64 - Inquiry Condtions List 1751 -
1795 29.09.2021 ID65 - SLACC comments on draft s.106 agreement 1796
- 1800 30.09.2021 ID66 - SLACC Legal Submissions on Amendment of
the
Application 30-9-21 1801 - 1825
30.09.2021 ID67 - Note on factual points by Caroline Leatherdale
and Ecolyse
1826 - 1829
30.09.2021 ID68 - Pipejacking Cross-sections 1830 - 1831 30.09.2021
ID69 - CIL Compliance Statement v5_10.8.21 1832 - 1849 30.09.2021
ID70 - SLACC Schedule of Correspondence. 10 June-3
Sept 2021 1850 - 1921
30.09.2021 ID71 - SLACC Partial Costs Application 30-9-21 1922 -
1937 30.09.2021 ID72 - Additional points on Cashflow from Mr
Kirkbride 1938 - 1938 01.10.2021 ID73 - Friends of the Earth (FoE)
Closing Statement 1939 - 2011 01.10.2021 ID74 - Friends of the
Earth (FoE) Closing Additional
Authority Bundle 2012 - 2228
01.10.2021 ID75 - SLACC Closing Submissions 2229 - 2306 01.10.2021
ID76 - West Cumbria Mining Limited (WCM) Closing
Statement 2307 - 2404
11.10.2021 ID77 - WCM - Applicant's response to legal submissions
on Pipe Jacking
2405 - 2424
11.10.2021 ID78 - WCM – Applicant's cost response 2425 - 2441
11.10.2021 ID79 - British Telecommunications Plc v Gloucester
City
Council [2001] EWHC Admin 1001 2442 - 2476
11.10.2021 ID80 - Gillespie v First Secretary of State, [2003] EWCA
Civ 400
2477 - 2489
11.10.2021 ID81 - R (on the application of An Taisce (National
Trust for Ireland) v Secretary of State for Energy and Climate
Change, [2014] EWCA Civ 1111
2490 - 2505
11.10.2021 ID82 - R. (on the application of Catt) v Brighton and
Hove City Council, [2007] Env. L.R. 32 (2007)
2506 - 2518
11.10.2021 ID83 - R. v Rochdale MBC Ex p. Milne (No.1), [2000] Env.
L.R. 1 (1999)
2519 - 2542
11.10.2021 ID84 - R. v Rochdale MBC Ex p. Milne (No.2), [2001] Env.
L.R. 22 (2000)
2543 - 2564
11.10.2021 ID85 - R (Champion) v North Norfolk District Council
(SC(E)), [2015] 1WLR
2565 - 2591
20.10.2021 ID86 - SLACC Reply to Costs Response 2592 - 2602
28.10.2021 ID87 - Certified Copy Supplemental Undertaking dated
2603 - 2618
28.10.2021 signed by WCM and Barwise (parties Only) 12.11.2021 ID88
- WCM-Applicant's comments on Biodiversity Net Gain
(Document amended and submitted by Cumbria County Council)
2619 - 2621
28.10.2021 ID89 - S.106 Agreement (webpage version) 2622 - 2749
28.10.2021 ID89- S.106 Agreement (parties only) 2750 - 2923
04.11.2021 ID90 - Condtions List v50 2924 - 2968 04.11.2021 ID91 -
Conditions Schedule v50 2969 - 3019 04.11.2021 ID92 - CIL
Compliance Statement v50 3020 - 3038 04.11.2021 ID93 - CIL
Appendices 1, 2 & 3 3039 - 3041 04.11.2021 ID94 - CIL Appendix
2 - PROW improvement costs
schedule 3042 - 3043
04.11.2021 ID95 - CIL Appendix 2 - PROW routes map 3044 - 3044
29.10.2021 ID96 - Coal Authority response 3045 - 3046 20.10.2021
ID97 - WCM response on planning conditions (parties only) 3047 -
3054 20.10.2021 ID98 - WCM response to Radiation Free Lakeland
matters
(parties only) 3055 - 3056
25.10.2021 ID99 - Radiation Free Lakeland Response to WCM
Conditions Agreement (email and attachments) (parties only)
3057 - 3097
01.11.2021 869_AP_001_F 3098 - 3098 01.11.2021 869_AP_002_D 3099 -
3099 01.11.2021 869_AM_001_C 3100 - 3100 01.11.2021 869_AM_002_F
3101 - 3101 01.11.2021 869_AM_003_C 3102 - 3102 01.11.2021
869_AM_004_E 3103 - 3103 01.11.2021 869_AM_005_C 3104 - 3104
01.11.2021 869_AM_006_D 3105 - 3105 01.11.2021 869_AM_007_C 3106 -
3106 01.11.2021 869_AM_008_D 3107 - 3107 01.11.2021 869_AM_010_A
3108 - 3108 01.11.2021 869_AM_011_A 3109 - 3109 01.11.2021
869_AM_012_A 3110 - 3110 01.11.2021 869_AM_013_A 3111 - 3111
01.11.2021 869_AM_015_A 3112 - 3112 01.11.2021 869_AM_017_A 3113 -
3113 01.11.2021 869_AM_019_A 3114 - 3114
01.11.2021 869_AM_021_A 3115 - 3115 01.11.2021 869_AM_023_A 3116 -
3116 01.11.2021 869_AM_025_A 3117 - 3117 01.11.2021 869_AM_027_E
3118 - 3118 01.11.2021 869_AM_028_C 3119 - 3119 01.11.2021
869_AM_029_D 3120 - 3120 01.11.2021 869_AM_030_C 3121 - 3121
01.11.2021 869_AM_031_C 3122 - 3122 01.11.2021 869_AM_032_C 3123 -
3123 01.11.2021 869_AM_033_A 3124 - 3124 01.11.2021 869_AM_034_A
3125 - 3125 01.11.2021 869_AM_038_A 3126 - 3126 01.11.2021
869_AM_040_C 3127 - 3127 01.11.2021 869_AM_041_H 3128 - 3128
01.11.2021 869_AM_042_E 3129 - 3129 01.11.2021 869_AM_201_B 3130 -
3130 01.11.2021 869_AC_001_F 3131 - 3131 01.11.2021 869_AC_002_G
3132 - 3132 01.11.2021 869_AC_003_C 3133 - 3133 01.11.2021
869_AC_006_A 3134 - 3134 01.11.2021 869_AC_008_A 3135 - 3135
01.11.2021 869_AC_009_A 3136 - 3136 01.11.2021 869_AC_010_C 3137 -
3137 01.11.2021 869_AC_011_C 3138 - 3138 01.11.2021 869_AR_001_C
3139 - 3139 01.11.2021 869_AR_002_C 3140 - 3140 01.11.2021
869_AR_003_B 3141 - 3141 01.11.2021 869_AR_006_B 3142 - 3142
01.11.2021 869_AR_007_C 3143 - 3143 01.11.2021 869_AR_008_A 3144 -
3144 01.11.2021 869_AR_009_A 3145 - 3145 01.11.2021 869_AR_011_A
3146 - 3146 01.11.2021 869_AR_012_C 3147 - 3147 01.11.2021
869_AR_013_I 3148 - 3148 01.11.2021 869_AR_014_L 3149 - 3149
01.11.2021 869_AR_015_A 3150 - 3150 01.11.2021 869_AR_016_B 3151 -
3151 01.11.2021 869_AO_001_D 3152 - 3152 01.11.2021 869_AO_002_D
3153 - 3153 01.11.2021 869_AO_003_D 3154 - 3154 01.11.2021
869_AO_004_D 3155 - 3155 15.11.2021 ID101 - Conditions List v.50
(amended by WCM-Applicant,
amendments not agreed by parties) (parties only) 3156 - 3202
15.11.2021 ID102 - Conditions Schedule v31_foe comments (parties
only)
3203 - 3242
6 September 2021
Addendum to the Steel and Metallurgical Coal Expert Report Prepared
for West Cumbria Mining
1
Introduction
1.1. This addendum to Wood Mackenzie’s Steel and Metallurgical Coal
Report provides metallurgical coal demand outlooks under the
Accelerated Energy Transition (AET) 1.5 and 2.0 Scenarios in the
2021-2050 period. There is appended to this Report The AET 2.0 and
1.5 Scenarios which are not forecasts. They explore different
possible futures and the actions that bring them about, including
the interconnections between the energy and steel industries. The
AET 1.5 and 2.0 scenarios are based on specific assumptions
required to limit GHG emissions under different mitigation
pathways. In contrast, Wood Mackenzie’s Base Case outlook is a
forecast and reflects the most likely outlook for the steel and
metallurgical coal markets.
1.2. The AET 1.5 Scenario was developed by Wood Mackenzie’s Steel
and Metallurgical Coal research teams in July-August 2021. Research
notes describing the impact of this “scenario” on the steel
industry and the impact on the metallurgical coal industry were
exclusively published to its client subscribers in August but not
cleared for pubic circulation analysis within the evidence that was
originally submitted. Nonetheless, Wood Mackenzie wanted to ensure
that this additional analysis was also made available to the
inquiry. This has been done as soon as possible following a process
of clearing authorisation throughout the Wood Mackenzie global
network. In addition, it also serves to supply material requested
in some of the rebuttal rule 6 statements received on 31 August
2021.
1.3. In order to develop scenarios, to show paths which would hold
the global temperature rise to less than 1.5 degrees Celsius or 2.0
degrees Celsius, Wood Mackenzie has started with the emission
reductions provided by the Intergovernmental Panel on Climate
Change (IPCC), for these two targets. Wood Mackenzie has a
dedicated team of analysts that works full-time specifically on the
energy transition issue. That team takes the IPCC total emission
reductions required to meet each temperature target and splits the
reduction requirements among the various sectors. These sectors
include power, industry, steel, refining, RCA (residential
commercial and agricultural) and transport.
1.4. Wood Mackenzie’s Steel Team takes those assigned emission
reductions and determines a route that would satisfy the required
reduction. That process is carried out by maximising the processes
that allow the greatest carbon savings first then maximising the
second-best process for carbon reductions, and so on. These steps
include: maximising scrap recycling/and EAF use, maximising DRI
then DRI to EAF, increasing hydrogen DRI (at the expense of
coal-based or natural gas-based DRI production, decreasing the
carbon intensity at EAFs, maximising BOF-BF emission efficiency and
introducing the use of molten iron electrolysis (in the AET 1.5
Scenario only)). After all the most promising techniques are
employed to what we consider their upper limits, there is still
latent carbon remaining mostly from the BOF-BF process, which must
be captured and stored.
1.5. The Steel Team’s choices resulted in a volume of steel
production by the BOF-BF route by country. Wood Mackenzie’s
Metallurgical Coal Team adjusted metallurgical coal demand to
satisfy the adjusted steel demand. Then, we reran our coal trade
flow models to arrive at the best economic choices to satisfy coal
demand.
1.6. This process provides a global solution for steel and
metallurgical coal to meet each scenario of emission restrictions
and temperature growth target, as defined by the IPCC. The stated
emissions obligations for individual countries are not taken into
account as a separate specific sub-element of the process.
1.7. This process differs from our Base Case forecasting process
which takes into account other factors that impact the steel
production process in each country, including cost competitiveness,
plant capex and scrap availability, among other factors. A detailed
description of Wood Mackenzie’s steel production and metallurgical
coal demand forecasting methodology can be found in paragraphs 1.4
to 1.9 of the Metallurgical Coal Report appended to the proof of
Jim Truman.
AET 1.5 Scenario
2
1.8. Wood Mackenzie has explored an even more aggressive
alternative scenario to our Base Case and AET 2.0 scenario. The
Accelerated Energy Transition 1.5 Scenario (AET 1.5 Scenario)
assumes that the global steel industry complies with a 1.5°C
warming pathway, aligned to the goals of the Paris climate
agreement and decarbonises much sooner than anticipated.
1.9. Under this scenario, steel demand remains unchanged from the
Base Case view, assuming efficiency demand gains are offset by
steel demand for decarbonising (new wind turbines, new EAFs, new
electolysers, etc). But, carbon emissions from the steel sector
must fall by a staggering 93% from our Base Case, versus 75% under
our AET2.0 scenario. For this reduction to happen, we believe steel
production methods in 2050 must fundamentally change in the
following way:
• Scrap use in steelmaking needs to nearly double.
• Direct Reduced Iron (DRI) production, and use, must rise
five-fold.
• Hot metal production must decline by more than half.
• Hydrogen injection in blast furnaces must reach 27 Mt by
2050.
• Global average Electric Arc Furnace (EAF) emissions intensity
must fall by 80%.
• Global average Basic Oxygen Furnace (BF-BOF) emissions intensity
needs to fall by 50%.
• CCUS penetration to near 60% of the residual carbon emissions at
its peak (capturing, storing and potentially using about 640
Mtpa).
1.10. Achieving all pathways will be immensely tough, with
significant hurdles to overcome. Massive capital investments and
swift research and development will be required to commercially
deploy new technologies to drive down emissions from conventional
steelmaking routes.
1.11. A balance between rising capital costs and emission offsets
will have to be maintained, as new technologies are developed, such
as hydrogen use and molten oxide electrolysis. There will be heavy
dependence on external support factors such as green hydrogen
availability, CCUS, government policy and budgetary support,
facilitation of new and unique trade infrastructure and most
importantly – a carbon-free source of electricity.
1.12. Achieving a 1.5-degree warming pathway has significant
implications for metallurgical coal demand. A rise in scrap and
hydrogen use in EAFs – and the associated decline in hot metal
production – presents the major downside risk to metallurgical coal
demand. It is exacerbated by both efficiency measures in existing
blast furnaces – reducing coke rates – and the partial replacement
of PCI with hydrogen injection.
1.13. The following charts (Figures 1.1 and 1.2) illustrate the
outlook for global hot metal production and metallurgical coal
demand to 2050 under the AET 1.5 scenario, compared to our Base
Case.
3
Figure 1.1: Global hot metal production, AET 1.5 Scenario 2021-2050
(Mt)
Figure 1.2: Global met. coal demand, AET 1.5 Scenario, 2021-2050
(Mt)
Source: Wood Mackenzie
1.14. Global metallurgical coal trade declines sharply under the
AET1.5 scenario; yet remains in place to 2050. Key impacts are as
follows:
• Overall global hot metal production will be 890 Mtpa lower than
our Base Case by 2050, reaching 572 Mt, as significant scrap-based
EAF and hydrogen DRI-EAF production displaces BF-BOF
production.
• Total metallurgical coal demand is 720 Mtpa lower in 2050
compared with our Base Case, at 415 Mt. Chinese domestic coal
production takes the brunt of the loss from declining hot metal
demand.
• Seaborne metallurgical coal trade is 288 Mt lower than our Base
Case in 2050. The trade falls by almost half from current levels,
to 158 Mt, as hot metal production contracts and BFs find new
efficiencies. Rationalisation of China’s domestic coal industry
will be required throughout this scenario to stabilise markets.
Eventually, the impact will be felt by seaborne imports, as coastal
mills take advantage of cheaper domestic coals.
• All traditional seaborne metallurgical import markets see
transformational demand loss. Europe moves away from BF-BOF
production, and, therefore, metallurgical coal demand is minimal
from around 2044. Indian BF-BOF growth continues, but is subdued
compared to our Base Case. CCUS plays a major role in China and
India with their remaining BF-BOF fleets.
1.15. In the AET 1.5 Scenario which shows all UK and EU27 blast
furnace closures, we are of the view that the West Cumbria Mining
product would still have a market in Asia.
1.16. Wood Mackenzie’s opinion is based upon three primary
marketability features would allow sales to this region even as the
global demand for metallurgical coal declines. These features
are:
1. The strong fluidity at over 30,000 ddpm;
2. The low cost of production, allowing competitive pricing;
0
200
400
600
800
1,000
1,200
1,400
1,600
20 21
20 23
20 25
20 27
20 29
20 31
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20 43
20 45
20 47
20 49
ROW South America North America CIS Europe Rest of Asia (w/o China
& India) India China Base Case
0
200
400
600
800
1,000
1,200
1,400
20 21
20 23
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ROW South America North America CIS Europe Rest of Asia (w/o China
& India) India China Base Case
4
3. The low GHG emissions component of this coal product, relative
to most other coal production.
1.17. Strong fluidity and low ash will continue to be attractive
1.18. Over the course of the last 20 years, steel mills in Asia
have not used large volumes of high-volatile A
coals. The Australian coking coals which are in the high-volatile
category have much lower coking properties and fluidity than
high-volatile A coals. Australian high-volatile coking coals are
classified as semi-soft and typically have low CSN values (between
3 and 6). US high-volatile A coals and West Cumbria Mining’s coal
have CSN values that range between 7 and 9 (West Cumbria Mining
averages 8.1). Australian semi-soft coals have fluidity values of
only a few hundred ddpm, so blending techniques were different in
Asia than in Europe or North America.
1.19. At present, with the China ban on Australian coals, China has
been importing larger volumes of US high-volatile A coals. These
shipments have mostly been sourced from Arch Resources’ Leer mine,
but also from Coronado Global Resources’ Logan County mines.
China’s primary goal has been to replace low- and mid-volatile
coals, which previously were sourced from Australia.
1.20. As mills in this region see the advantages of using
high-fluidity coals in their blends, we believe the opportunities
will expand for this type of coal into the broader Asia
region.
1.21. In addition, the low ash aspect of West Cumbria Mining’s coal
should be very attractive to cokemakers. Most seaborne-traded coals
(especially those from Australia, Canada and southern Appalachia in
the US) have ash contents ranging between 9.5% to 10.5%. The ash
from this proposed mine is under 5% and possibly as low as 3.5%.
This level would be around one-third to one-half of the ash content
of coals from those regions. This quality feature will add much
value to cokemakers, creating their blends.
1.22. Low-cost of production should allow competitive pricing 1.23.
The expected mining costs at West Cumbria Mining places the
production in the first quartile of the cost
curve. With such low expected costs, the mine should be able to
offer competitive pricing to any destination. Recently, cokemakers
have been focused on finding coals that will lower their feedstock
costs and still produce a good, strong coke.
1.24. The low GHG emissions from this mine will offer users
immediate carbon reductions 1.25. West Cumbria Mining’s carbon
emissions are expected to be among the lowest of all coal mines in
the
world. On a delivered basis to European mills, the mine will
provide a savings on feedstock emissions over other sources of
high-volatile A coals. In the situation delineated in Wood
Mackenzie’s AET 1.5 Scenario, which still includes volumes of blast
furnace production with capture and storage in Asia, the use of the
mine’s production for the high-volatile portion of the blend would
offer an advantage on emissions for the feedstock coal for
cokemaking.
1.26. Wood Mackenzie estimates delivered emissions to Japan would
be around 110 kgCO2e/t in the Likely Mitigated case and around 175
kgCO2e/t in the Worst case compared to about 550 kgCO2e/t for US
high- volatile A coals, an 80% or 68% reduction respectively.
1.27. Wood Mackenzie estimates delivered emissions to India would
be around 80 kgCO2e/t in the Likely Mitigated case and around 180
kgCO2e/t in the Worst case compared to about 550 kgCO2e/t for US
high- volatile coals, an 85% or 67% reduction.
1.28. For the reasons cited above: 1) attractive high fluidity and
low ash; 2) low operating costs should allow competitive pricing
globally; and 3) low GHG emissions should provide cokemakers/steel
mills immediate savings on carbon emissions, we believe the West
Cumbria Mining’s production should be marketable to mills in Asia
if all EU and UK blast furnaces cease to operate in the 2040s, as
our AET 1.5 Scenario delineates.
AET 2.0 Scenario 1.29. In the AET 2.0 scenario, steel demand
remains unchanged from the Base Case view, for the same
reasons presented above for the AET 1.5 case. But, carbon emissions
from the steel sector must fall by 75%. For this reduction to
happen, steel production methods in 2050 must change in the
following way:
• Scrap use in steelmaking needs to nearly double.
• Direct Reduced Iron production and use must more than
triple.
• Global average Electric Arc Furnace emissions intensity must fall
by 70%.
5
• Blast Furnace – Basic Oxygen Furnace emissions intensity needs to
fall by 30%.
• 46% of the residual carbon emissions must be captured and stored
or used (around 500 Mtpa).
1.30. The following charts (Figures 1.3 and 1.4) illustrate the
outlook for global hot metal production and metallurgical coal
demand to 2050 under this scenario. Metallurgical coal demand under
AET2.0 is similar to our Base Case until the mid-2020s. Advancement
in existing technology, efficiency gains and raw material
optimisation drive emissions reduction in the short term, but
falling coke rates have only a marginal impact on overall
metallurgical coal demand while overall hot metal production is
still growing. However, decarbonisation must accelerate from 2025
to meet a 2-degree target. Increased scrap use and DRI production
starts to displace coal demand in the latter part of this decade.
China and India start to see the effects of decarbonisation during
this period and the trend accelerates into the 2030s.
Figure 1.3: Global hot metal production, AET 2.0 Scenario,
2021-2050(Mt)
Figure 1.4: Global met. coal demand, AET 2.0 Scenario, 2021-2050
(Mt)
Source: Wood Mackenzie
1.31. The steel industry achieving a two-degree warming pathway
would have significant implications for metallurgical coal
demand.
• Overall global hot metal production would be 667 Mt lower than
our Base Case by 2050 to 796 Mt, as significant scrap-based EAF and
hydrogen DRI-EAF production displaces BF-BOF production.
• Total metallurgical coal demand would be 513 Mtpa lower in 2050
compared with our Base Case. Most of the demand decline occurs from
the late 2030s onwards.
• Global seaborne trade does not escape the fall in total
metallurgical coal demand, although it is domestic coal in China
that bears the brunt of declines. Seaborne trade falls to 237 Mt in
2050, from 292 Mt in 2021. By 2050 the trade is 208 Mt lower than
our Base Case of 445 Mt in 2050.
• In Europe, total metallurgical coal demand would fall from 85 Mt
in 2021 to 25 Mt in 2050, a fall
0
200
400
600
800
1,000
1,200
1,400
1,600
20 21
20 23
20 25
20 27
20 29
20 31
20 33
20 35
20 37
20 39
20 41
20 43
20 45
20 47
20 49
ROW Rest of Asia (w/o China & India) Europe South America CIS
North America India China Base case
0
200
400
600
800
1,000
1,200
1,400
20 21
20 23
20 25
20 27
20 29
20 31
20 33
20 35
20 37
20 39
20 41
20 43
20 45
20 47
20 49
ROW Rest of Asia (w/o China & India) Europe South America CIS
North America India China Base case
6
of ~70%. Under this scenario, European metallurgical coal demand is
around 35 Mt (~40%) lower in 2050 relative to the Base Case
forecast.
7
APPENDIX
AUGUST 2021
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
9
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 2 of 14
Steel is responsible for 7% of global CO2 emissions. For steel to
comply with a 1.5°C warming pathway aligned to the goals of the
Paris climate agreement – it needs to decarbonise much sooner than
anticipated. We evaluate this as an alternative scenario, beyond
our base case, to understand the outcomes and implications on
industry dynamics and metallics demand. We call it the Wood
Mackenzie Accelerated Energy Transition 1.5°C (AET1.5) scenario
where we outline
• What is the ask for steel to be compliant with a 1.5°C
world?
• How can steel decarbonise to this extent?
• What are the hindrances and assumptions?
• How does steelmaking change?
The analysis draws comparison with our base case and the recently
published 2°C warming pathway outcomes. The deliverables for this
scenario analysis are:
• Writeup on suggested pathways and outcomes – continue reading
below
• a slide deck of the results – available in the downloads
section
• a results datafile – available in the downloads section
• a summary of the key findings via a video presentation – see
below
• text methodology and approach – available in the downloads
section
Executive summary To achieve a scenario where the global average
temperature rise is curtailed at 1.5°C, steel emissions must fall
by 93% from current levels to 208Mt in 2050. We call it the
accelerated energy transition 1.5°C (AET1.5) scenario. The
permissible emissions under AET1.5 are a quarter of the budget
available under the 2°C scenario (AET2.0).
For steel to achieve the emission targets under AET1.5, low carbon
technologies must be prioritised. Below mentioned are the pathways
to achieving the AET1.5 emission budgets by 2050 as compared to
current levels:
• Scrap use in steelmaking needs to nearly double
• Direct Reduced Iron production, and use, must rise
five-fold
• Hot metal production must decline by more than half. Conventional
BF-BOF steel production to decline by ~85%
• Global average Electric Arc Furnace (EAF) emissions intensity
must fall by 80%
• Global average Basic Oxygen Furnace (BF-BOF) emissions intensity
needs to fall by 50%
10
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 3 of 14
• CCUS penetration to near 60% of the residual carbon emissions at
its peak (capturing, storing and potentially using about 640
Mtpa)
All the above pathways are immensely tough to achieve with
significant hurdles to overcome. Huge capital investments, research
and development will be required to commercially deploy new
technologies and pare down emissions from conventional steelmaking
routes.
A balance between rising capital costs and emission offsets will
have to be maintained as new technologies are developed such as
hydrogen use and molten oxide electrolysis. There will be heavy
dependence on external support factors such as green hydrogen
availability, CCUS, government policy and budgetary support,
facilitation of unique trade infrastructure and the most important
of all – a carbon free source of energy.
Steel: AET1.5 scenario analysis Carbon emissions from the steel
sector must fall by 93% to 208Mt by 2050 In the AET1.5 scenario
steels assigned carbon budget is 208Mt in 2050. Emissions must fall
on a linear trajectory over the next three decades to achieve this
budget.
The onus will be on advanced economies to lead. China, Europe and
the US will have to reduce emissions by 98% from current levels by
2050. Blast-furnace-based production would need to be abolished in
the EU and the US in the 2040s.
Unlike AET2.0, developing nations will also have to accelerate
efforts to limit carbon emissions and keep pace with advanced
economies. India, in particular, will need to curb emissions by 72%
from current levels even as its crude steel production grows at the
fastest pace amongst others.
Carbon emissions: Where we are and where we need to be in
AET1.5
11
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 4 of 14
What changes in AET1.5 compared to AET2.0 Steel output stays
unchanged
The demand view for AET1.5 and AET2.0 remains consistent with our
base case outlook. We do not include any emission reduction from a
potential decline in steel demand. Our scenario analysis evaluates
potential ways to decarbonise in a business- as-usual (BAU) demand
setting. We expect global steel production to grow at an annual
rate of 0.7% and reach 2300Mt by 2050.
There are upside and downside risks associated with demand in AET
scenarios, but we believe they have a negligible net- impact on the
overall view.
Steelmaking routes and metallics demand
Steelmaking route share across scenarios Metallics demand across
scenarios
With demand remaining unchanged, what deviates in the accelerated
energy transition scenarios is how steel is made.
• In our base case, BF-BOF continues as a dominant steelmaking
route throughout the forecast horizon. However, in terms of growth,
EAF manages to outpace BOF. The share of EAF rises from 27% in 2020
to 38% in 2050.
• In AET2.0, preference for EAF increases with a rising focus on
less emission intensive technologies. EAF registers an annual
growth of 4% while BOF declines by an average 2% over the next
three decades. This leads to a role reversal between EAF and BOF –
EAF share rises to 68% whereas BOF is restricted at 32%.
• Under the AET1.5, EAF growth further accelerates and BOF decline
continues. The share of EAF rises to 73% followed by BOF at
22%.
• Molten oxide electrolysis (MOE) finds an inclusion in this
scenario as we believe that the pressure to decarbonise will
accelerate the development of new technologies with support from
external factors such as zero carbon energy. In AET1.5,
electrolysis share is pegged at 5% producing 100Mt by 2050.
12
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 5 of 14
Changes in steelmaking methods will shift metallics demand
• The scrap pool remains unchanged at ~1294Mt as compared to
AET2.0; doubling from 2020
• DRI production rises 45% over AET2.0 to ~550 Mt; a five-fold
increase from 2020
• Hot metal production declines 28% vs AET2.0 to 572 Mt; 60% below
current levels
Hydrogen and CCS requirement
Hydrogen demand: AET1.5 vs AET2.0 CCUS requirement: AET1.5 vs
AET2.0
Aligning to achieve a challenging 1.5°C warming pathway in the
steel industry would prove to be a boon for hydrogen demand in
steelmaking as well as carbon capture and storage as an emission
abatement measure. Both must start sooner than expected and are
required in a larger quantum as compared to the AET2.0
scenario.
Hydrogen based DRI production will need to commercialise as soon as
2025. Use of hydrogen in the blast furnace will also start earlier
but at a small scale and starts gaining momentum only towards
mid-2030s.
The average annual green-hydrogen demand in AET1.5 is projected to
be 60% higher than in AET2.0. The hydrogen demand would reach 52Mt
by 2050 producing 650Mt of steel as against 450Mt in AET2.0.
Considering a very optimistic scenario where all the suggested
pathways are achieved by overcoming huge obstacles – the emissions
still will remain over the allocated budget. This generates the
need for implementing carbon offset measures with carbon capture
and storage being the most promising of all. CCUS is critical for
abating emissions over the next two decades. However, CCUS cannot
be a part of the longer-term solution as the industry will have to
focus on sustainable and effective emission reduction technologies
as opposed to offset measures.
13
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 6 of 14
It is unlikely that CCS will ever be able to capture over 80% of
emissions in steelmaking and our AET1.5 carbon budget is such that
in some regions 100% capture efficiencies would be required. As
steelmakers eventually abandon blast furnace based production, the
need for CCUS diminishes.
In an AET1.5 scenario, we expect a high pace of acceleration in CCS
requirement to offset residual emissions until the early 2040s. The
CCUS requirement rises sharply from 2025 to 2043 due to time lag
for new technologies to commercialise and a gradual reduction in
emissions from conventional routes.
The CCUS requirement doubles as compared to AET2.0 between 2030 and
2040. CCUS peaks at 640Mt in 2043 with a capture efficiency of 58%.
However, the CCUS requirement starts declining gradually as
steelmakers focus on emission reduction as opposed to emission
offset. The steel emissions dwindle post 2045 as new low-carbon
technologies (H-DRI-EAF, H-BF-BOF, MOE ) start to gain momentum and
the rising share of renewable energy (80-85% of the total capacity)
compresses emission intensities across technologies. The decline in
emissions will reduce the dependence on CCUS and its penetration
falls from 58% in 2043 to 45% by 2050 which is at par with
AET2.0.
We assume technological advancements, bulk efficiencies and higher
penetration of smelting reduction in blast furnace will allow a
capture efficiency of nearly 60% in AET1.5 – a very high
level.
Steel production methods to change – a comparison to AET2.0
scenario analysis
The pathways outlined below need to be achieved collectively for
steel to meet the emission target under AET1.5 scenario in
alignment with the Paris climate agreement.
Page 7 of 14
Scrap use remains relatively rangebound as compared to AET2.0
Scrap pool is unchanged compared to AET2.0 Scrap consumption
plateaus’ post 2040
The scrap pool in the AET1.5 scenario stays at 1294Mt in 2050 –
unchanged from AET2.0 and ~5% higher than the base case. There is
no room for improvement as collection and recovery rates peak at
over 80%. It is very challenging and expensive to further increase
the scrap availability.
However, the usage trend in AET1.5 differs slightly from AET2.0.
Scrap becomes the largest feedstock in steelmaking in 2050. The
increase in scrap consumption accelerates faster in AET1.5 versus
AET2.0 in order to quicken the decline in carbon emissions.
Steelmakers will have to quickly evolve the technology to overcome
key hurdles of manufacturing superior grade steel products via
scrap-EAF and removing impurities from the recovered scrap. Capital
infusion to setup new scrap-EAF capacities will gain precedence as
this is the lowest emitting technology amongst existing steelmaking
routes.
We expect scrap usage in steelmaking to accelerate post 2030
(compared to AET2.0) and reach nearly 90% of the pool available by
2040. The deployment of new technologies in a similar timeframe is
expected to gain wider acceptance which in turn will flat line the
scrap consumption rates at slightly above 90% through 2050.
15
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 8 of 14
DRI rises sooner and continues gaining momentum – a 5x increase
from current levels
DRI production across scenarios Technology-wise DRI-EAF production
in AET1.5
EAF is preferred in these scenarios as it is a much cleaner source
for steelmaking and can reduce emissions even further with a rising
share of zero-carbon energy. As scrap consumption largely remains
rangebound in AET1.5, the dependence on DRI as feedstock in EAF
strengthens – fast-tracking capacity additions and
production.
In this scenario DRI production is expected to rise at 6% annually
up to 2050 to scale 550Mt.This is 45% higher than AET2.0. DRI
production grows much faster in the first decade – maximising
utilisation of already available capacities. The growth rates lower
gradually due to base impact over the long term.
The use of hydrogen as a reductant will hold the key to elevate DRI
production. This technology must commercialise sooner than
anticipated, likely in 2025, and gain more than three-quarters of
production share by 2050. The share of current fossil fuels based
DRI production will further diminish with natural gas based DRI
accounting of the balance and coal fired DRI perishing in late
2030s.
The industry will have to invest heavily in hydrogen-based DRI
facilities as a replacement of “dirty” fossil-fuel based furnaces
and develop ways to counter other menace issues such as
availability of high-grade iron ore (67% Fe), evolving the use of
low grade iron ore fines for DRI and elimination of hazardous
impurities and shipping challenges due to the combustible nature of
DRI.
The DRI trade will stay rangebound with a slight upward bias in
this scenario but not material enough. We believe that with
economies of scale, the larger consumers (importers) of DRI will
focus on domestic reliance as opposed to imports.
We expect the DRI trade to remain over 120 Mtpa in 2050 similar to
AET 2.0 scenario. The DRI production route across key exporters
will be different. Australia and Brazil are expected to produce
100% H-DRI for exports whereas 80% of Middle Eastern DRI production
will be gas based due to cost competitiveness and
availability.
China, Europe and Japan will be the key importers of DRI. India
will continue to be an opportunistic importer but largely self-
sufficient.
16
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 9 of 14
BOF production to plummet further – a 62% decline from current
levels
BOF production across scenarios Technology-wise BF-BOF share in
AET1.5
The resultant of preference for low carbon technology is that
BF-BOF production falls steeply. BOF production starts declining
gradually but the pace of decline accentuates in the last decade.
In AET1.5, the BOF production reaches 514Mt, holding a share of 22%
of the total steel output. This is 30% lower as compared to AET2.0
and nearly two-thirds lower than in 2020. This is a clear
indication that the route is losing steam at a global level. Asia,
especially China, India and Southeast Asia, will jointly hold
nearly 85% of the total BOF production by 2050.
The hydrogen-based BOF production will start gaining momentum from
mid-2030s as compared to early 2040’s in AET2.0. The
commercialisation of this technology has been pushed forward basis
rising supply of green hydrogen, a potential decline in hydrogen
cost and assumption that technological hurdles such as pre-heating
of hydrogen, hot flammable gas injection in BF and adequate gas
permeability for stable reaction and melting are overcome.
At the onset, hydrogen-based BOF share will gradually increase to
12% to 2040, however, its penetration will surge in the last decade
rising to 58% by 2050. The use of hydrogen in blast furnace as a
partial coke substitute and PCI replacement will help cost
conscious steelmakers to continue operating these furnaces with
retrofits rather than investing in new greenfield technologies by
shutting old blast furnaces.
The share of biofuels will be about 5% in AET1.5 – similar to
AET2.0. However, the production will decrease slightly from 35Mt in
AET2.0 to 27Mt in AET1.5 as other technologies such as the H-BF-BOF
and MOE gains prominence which makes biofuel less viable option (or
something similar, a short explanation?).
The share of conventional (BF-BOF) route will decline to 37% within
BOF as it will be extremely difficult to mitigate emissions below
30% of the current levels. The AET1.5 budgets offers very limited
wiggle room for BOF emissions. We believe that carbon costs will
eventually make this route extremely cost heavy thereby limiting
any further upside.
17
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 10 of 14
AET1.5 emission intensity falls slightly from AET2.0 levels
Lowering the steel emission intensity will be one of the top
priorities of steelmakers. The preference towards EAF arises as it
already emits just a quarter of emissions as compared to the BOF
route and has the potential to reduce emissions intensity
further.
In our view there is only a slight room for improvement in emission
intensities between AET1.5 and AET2.0 scenarios contingent on
support from technology advancements and bulk efficiencies.
In AET1.5, greener technologies such as electrolysis, H-DRI-EAF and
scrap-EAF accounts for more than 70% of the total production. BOF
production falls primarily due to limitation towards emission
intensity reduction.
Reducing emission intensities is not just dependent on internal
factors but also on external support. In some cases, such as the
scrap-EAF, emission reduction is as straight forward as switching
to carbon free power and has the potential to reach zero emission
levels. We expect the share of renewables in power generation
capacity to reach nearly 85% by 2050 which boosts the availability
of clean energy for a “hard-to-decarbonise” sector such as
steel.
MOE and H-DRI-EAF have the lowest carbon footprint amongst all – a
near zero emission technology if powered by clean energy.
A further decline in BOF emission intensity can be achieved by
increasing the share of H-BF-BOF
The conventional BF-BOF emission intensity can be reduced by around
30% - its theoretical minimum. The rising share of H- BF-BOF (about
58% of total) will aide in lowering the overall BOF emission
intensity to 1 t CO2e/t crude steel by 2050.
BOF technology will remain at the bottom of preference for
steelmakers as even the most emission effective H-BF-BOF route
emits 0.8-0.9 t CO2e /t crude steel at 50-55% coke/PCI feed
substitution. This is 80% higher than the current EAF emission
intensity.
18
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 11 of 14
Reducing BOF emission intensity is much more complicated than EAF –
it requires a combinational pathway to be employed such as coke dry
quenching, waste heat and gas recovery, smelting reduction, digital
blast control etc.
Capture and storage 640Mt emissions at its peak – 58% of the
residual carbon
Even if the steel industry can overcome momentous hurdles to
achieve all the above pathways, emissions will remain over- budget.
Therefore, there will be a need to capture, store and potentially
use about 640Mt or 58% of the residual emissions at its peak in
2043.
The carbon capture efficiency level rises from 45% in AET2.0 to 58%
in AET1.5. We believe capture rates beyond 80% are unviable and
going above 70% will be challenging from cost and complexity
perspective.
Regions such as China and India do come very close to the capture
efficiency rates of 65-70% for a few years before the CCUS
requirement gradually subsides. Such elevated capture rates are a
consequence of relatively higher BOF production share.
We assume that these levels of capture rates can be achieved with
bulk efficiencies and technological advancements such as alternate
steelmaking technologies like smelting reduction which produces a
highly carbon concentrated top gas which is easy to capture.
CCUS requirement vs usage efficiency (AET1.5) Region-wise CCUS
requirement (AET1.5)
The CCUS technology remains an integral part of the decarbonisation
puzzle until early 2040s where the need to offset carbon emissions
arise out of sheer lack of low carbon technologies.
As stated earlier - CCUS cannot be a part of the long-term
solution. Steelmakers will have to focus on emission reduction as
opposed to emission offsets.
We expect the CCUS requirement to max out at 640 Mt in 2043 and
start declining gradually as:
• New technologies such as hydrogen-based steel and MOE increase
their production share
19
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 12 of 14
• Carbon emission intensities of conventional routes decline to
their potential minimum through energy efficiency measures and
support from external factors such as clean energy
• The share of BF-BOF declines rapidly in the decade starting 2040
which in a BAU situation would utilise CCUS for emission
abatement
As actual emissions fall – the need for CCUS eases. CCUS capture
rates lower to about 45% by 2050 similar to AET2.0. However, the
trend is not similar across regions:
• Developing economies such as India and SEA will continue
increasing their dependence on CCUS as they must keep offsetting
emissions to meet targets
• CCUS requirement in China will stay rangebound with a slight
negative bias as BOF production decline continues
• BOF production will cease to exist in advanced economies such as
USA and EU and thus the need to CCUS perishes
Hydrogen demand for steelmaking to rise 45% over AET2.0 to 52Mt by
2050
Hydrogen-based steelmaking is the most promising new technology to
be compliant with the 1.5°C warming pathway. The technology has
been witnessing successful pilot trails and there are ongoing
efforts for commercial deployment. In the AET1.5 scenario,
hydrogen-based steelmaking does not necessarily have to be
immediately commercially successful – governments could subsidise
it or mandate its use. However, we believe that in AET1.5, hydrogen
production and use will be widespread and therefore its cost of use
in steelmaking should decline.
Hydrogen use in steelmaking goes from zero today to 52Mt in 2050
under AET1.5. The greatest asset of commercialising use of green
hydrogen is that it can be used for both EAF and BOF routes.
In AET1.5, the use of hydrogen as a reductant in DRI production
will begin by 2025. The demand for hydrogen via the H-DRI- EAF
route surges in the initial years. Use of hydrogen as a PCI/coke
replacement in BF-BOF is still being developed. In AET1.5
deployment is expected by mid-2030s - sooner than AET2.0. Once
deployed, the use of hydrogen in blast furnace with surge,
especially in BOF dominant regions of Asia and eventually catch up
with demand from DRI. We expect 26Mt of hydrogen to be consumed in
DRI furnaces, producing 350Mt steel, whereas 27Mt to be utilised in
BF-BOF route, producing 290Mt of steel.
20
Steel’s roadmap to decarbonisation in an accelerated energy
transition 1.5°C warming scenario
Page 13 of 14
Hydrogen demand: AET1.5 v AET2.0 Hydrogen demand in BOF vs EAF in
AET1.5
Conclusion Achieving the AET1.5 scenario is a gigantic task and is
not our base case view. The challenges to success are immense and
overcoming them will require huge capital outlay, technical
advancements, bulk efficiencies and external support.
We believe that it will entail more stick than carrot for steel to
achieve the targets set under AET1.5 scenario. Policy makers across
the globe need to amicably unify and lay out stringent policies
which will persuade steelmakers to adopt green technologies and
curb emissions. Some of these actions could potentially comprise
of:
• increasing carbon prices via taxation to inflate steelmaking
costs
• mandating green steel in government projects
• manufacturing incentives and tax breaks for low carbon steel to
increase its competitiveness
• trade restrictions such as import quotas and emission linked
safeguard duties
• aiding investments in support infrastructure for green steel such
as access to cheap renewable energy, green hydrogen, trade
facilitation and carbon storage.
Steel is a difficult industry to decarbonise with multiple
technological ambiguities and a high level of dependence on
external factors. All large producers will have to structurally
modify the way steel is made and commit to investing resources and
capital on the path to decarbonisation. EAF will be the most
sought-after technology for reducing steel emissions as it will
account of 73% of the production share with merely 22% of the
emissions. BOF will decline but will still have a slight skin in
the game with 22% production share comprising 77% of the total
emissions.
21
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22
1 wh32711080v1
Former Marchon Site, Pow Beck Valley and area from Marchon Site to
St
Bees Coast, Whitehaven, Cumbria
Introduction
1. The Applicant seeks planning permission for, in summary, a
new
underground metallurgical coal mine and associated development, a
new coal
loading facility and railway sidings linked to the Cumbrian Coast
Railway Line
and a new underground coal conveyor (“the Development).1
2. The Development will take place in the Former Marchon Site, the
Pow Beck
Valley and an area from the Marchon Site to St Bees Coast,
Whitehaven,
Cumbria (“the Site”). A fuller description of the Site and its
surroundings is
set out in the main statement of common ground.2
1 The full description of development is provided on p. 1 of the
main Statement of Common Ground (“SoCG”) at CD 15.5, p. 122. 2 See
CD15.5, pp. 124 – 132.
23
2 wh32711080v1
3. The planning history of the Application is lengthy, and is set
out in full in the
Applicant’s Statement of Case.3 However, for present purposes, it
is sufficient
to note that prior to being Called-in by the Secretary of State,
the Application
had been carefully considered three times by the minerals planning
authority,
Cumbria County Council (“the Council”). Each time the
Council’s
professional officers, who have received considerable support from
specialist
external consultants, have recommended that planning permission
should be
granted, and each time members have followed that recommendation
with
overwhelming support.
4. Following the Secretary of State’s decision to Call-in the
Application,4
Council officers have ‘decided’ (under what is said to be delegated
authority)
that the Council would adopt a position of “Strict neutrality” in
the
forthcoming public inquiry. However, it is important to note that
this decision
was borne out of administrative expediency and did not involve
any
reconsideration of the merits of the Application.5
5. Accordingly, the Inspector and Secretary of State are entitled
to continue to
give the Council’s previous decisions on the determination of the
Application
considerable weight – particularly since they enjoyed the support
of both the
democratically elected decision makers and the professional
opinions of
officers and external consultants.
6. In his letter directing that the Application should be
called-in, the Secretary
of State identified the following matters which he wished to be
informed
about:
3 CD 15.1, pp. 10 – 24. 4 Which was finally taken in March 2021
following two previous decisions by the Secretary of State not to
call-in the Application. 5 See paras. 43 – 44 of the main SoCG at
CD 15.5, p. 145.
24
3 wh32711080v1
a. the extent to which the proposed development is consistent
with
Government policies for meeting the challenge of climate
change,
flooding and coastal change in the NPPF (NPPF Chapter 14).
b. the extent to which the proposed development is consistent
with
Government policies for facilitating the sustainable use of
minerals in
the NPPF (NPPF Chapter 17).
c. the extent to which the proposed development is consistent with
the
development plan for the area; and
d. any other matters that the Inspector considers relevant.
7. The Inspector subsequently identified the following matters
which he
considered to be relevant to the determination of the
Application:
a. The effects of the proposed development on the character
and
appearance of the area.
b. The effects of the proposed development on the local amenity and
living
conditions of nearby residents with particular regard to users of
public
rights of way.
d. The effects of the proposed development on heritage
assets.
e. The effects of the proposed development on tourism and
recreation.
f. The need for the coal having regard to likely future demand for
use in
the steel industry and the supply of the mineral. This will include
the
consideration of alternative technology for the steel
industry.
g. The effects of the proposed development on employment and the
local
and national economy.
acceptable or could be made so by planning conditions/obligations,
and
if not, whether national, local or community benefits would
clearly
outweigh the likely impacts.
8. Before providing an overview of the issues, it is pertinent to
note that the
single most controversial part of the proposed development is the
impact that
it will have on GHG emissions and climate change. Unusually,
however, the
evidence of those objecting to the scheme is not focused at the
GHG
emissions of the Development itself, which will be mitigated to
ensure that
they are net-zero compliant from day one. Instead, the focus of the
evidence
is on the climate impact of the global steel industry, which
clearly does not
form part of this application, and is outside the control of the
Applicant.
Need for coking coal having regard to likely future use in the
steel industry
9. The Development has generated significant controversy because it
is a coal
mine, and the word “coal” has become an emotive word that is seen
as a
major contributor to climate challenge and an obstacle to the
transition
towards a net-zero economy. However, the coal that the development
will
extract is not thermal coal. It is high quality coking coal, which
is essential for
primary steel manufacturing,6 and subject to a condition that will
require it to
be suitable for use in the steel industry.7
10. Those opposed to the Development object to the continued use of
coal as a
matter of principle. However, in doing so, they ignore the
inconvenient truth,
which is that coking coal remains essential to the steel industry
and to the
production of steel. That is why it continues to be classified by
the European
6 See para. 53 of the UK Government’s Industrial Carbonisation
Strategy at CD 8.14. 7 See proposed condition numbers 4 and 77 at
CD15.5, pp. 156 and 188.
26
5 wh32711080v1
Union as a “critical raw material”.8 It is to be recalled also that
neither
National Planning Policy nor legislation prohibits the extraction
of coking
coal. Indeed, National Planning Policy continues to identify coal
as a minerals
resource of local and national importance following the recent
review and
amendment to this definition in July 2021.9
11. Wood Mackenzie, a leading international commodity consultancy,
which
specialises in producing in-depth analysis and forecasts of global
and regional
metals markets, have drawn upon their considerable expertise in
this area to
produce a forecast of the likely demand for coking coal up until
2050.
12. A key distinction between the work undertaken by Wood Mackenzie
and the
evidence produced by the Rule 6 Parties regarding the need for
coking coal is
that Wood Mackenzie have provided a forecast of what they consider
is likely
to happen. This is not a “business as usual” approach and it does
take into
account the likely penetration of alternative technology into the
steel-making
industry, but it does so on the basis of what they consider is
likely to happen
in reality. In contrast, the Rule 6 Parties rely upon scenarios (or
pathways)
which illustrate what they say needs to happen in order to achieve
certain
policy targets or ambitions. These scenarios are emphatically not
forecasts.
This is an important distinction.
13. Mr Truman will explain why he considers that the forecast
produced by Wood
Mackenzie is correct. Nevertheless, for completeness, Wood
Mackenzie have
also modelled alternative scenarios which illustrate what
variations to the
likely forecast might be needed to meet certain targets.
8 CD 9.14. 9 See Annex 2 to the NPPF.
27
6 wh32711080v1
14. Even adopting the most optimistic forecasts for the development
of
alternative technologies that are necessary to meet the 1.5 degree
warming
target, it is striking that no-one is saying that there will not
continue to be a
demand for coking coal in Europe throughout the 2020s and 2030s. At
the
moment, that demand is being met by coal that is being imported to
Europe
from the USA. The position into the 2040s – 2049 is more
disputed.
However, even then, it is clear that there will continue to be a
global need for
coking coal which WCM can continue to meet.
15. Furthermore, even if all reasonable forecasts turn out to be
incorrect and
demand drops more than anticipated for the period into the 2040s so
that
there is no longer a market for WCM, it is difficult to see what
harm would
arise. Plainly, WCM will not continue to mine coal if there is no
market for it
and a restoration bond has been secured to ensure that the site
will be
restored.
16. As part of their challenge to the need for the coal which will
be produced by
the Development, the Rule 6 Parties also take issue with WCM’s
coal
specification and the quality of coal that will be produced by
the
Development. However, in doing so they overlook three important
factors.
a. First, the Development is backed by sophisticated investors with
a track
record in promoting minerals projects. It is frankly inconceivable
that very
significant sums of money would be spent on promoting the
development
of a mine that will produce coal for which there is no market. As
Mr
Kirkbride will explain, investment has been provided in phases
following
demonstration, and independent verification of, the asset.
b. Second, the Applicant is prepared to accept a condition which
limits the
output of the mine to certain characteristics. The run of mine coal
will go
28
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through a process of beneficiation in the Coal Handling and
Processing
Plant (“CHPP”) to remove undesirable characteristics. Parnaby
Cyclones
Ltd, who will provide the CHPP, have confirmed that the processed
coal
will be able to meet the specification limits in the proposed
condition.10
c. Third, blast furnaces require coke and not coking coal. Coke is
made by
blending a number of different coking coals together in a coke
oven. This
process allows the coke-maker to produce the ideal coke from
many
different coking coals, all of which have different characteristics
and
chemical compositions.
17. Mr Kirkbride has addressed these points, and explained why WCM
coal will
meet the specification that he has produced.11 The strength of the
market for
WCM coal is also confirmed by the supply agreement WCM has entered
into
with Javelin Global Commodities (UK) Ltd, which is described in the
letter
provided by the CEO of Javelin.12
GHG emissions / climate change
18. The general science behind Climate Change and the scale of the
challenge
facing countries which are seeking to decarbonise their economies
and limit
the extent of global warming is not in dispute.
19. However, it is widely recognised (and self-evident) that these
difficult goals
cannot be achieved overnight. That is why, in the UK, the Climate
Change
Committee has published ‘pathways’ to meeting the net-zero
obligation
contained in Climate Change Act 2008 by 2050. This is also
reflected in the
wording of the NPPF, which states that “The planning system should
support
10 See Appendix 2 of WCM/MAK/2. 11 See Appendix 3 of WCM/MAK/2. 12
See Appendix 6 of WCM/MAK/2.
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8 wh32711080v1
the transition to a low carbon future in a changing climate”
(emphasis
added).
20. An issue in this case is not whether steps need to be taken to
support the
transition to a net-zero economy, but whether this development does
not
harm, and indeed, can contribute to that transition to net zero. It
is all too
easy to object to this development on the basis that it is a coal
mine and coal
is ‘dirty’ and ‘bad’, but (as is set out above) the reality is that
some industries,
and especially the steel industry, will continue to need coking
coal for many
years. Indeed, the very significant challenges in decarbonising the
steel
industry are not seriously in dispute.13
21. Once it is recognised that there is a continuing need for
coking coal, which
will continue to be met by imports from the USA irrespective of
whether this
Development gets consent, the objections to this mine amount to
little more
than ‘emissions offshoring’.
22. The focus of this inquiry should rightly be on the effects of
this development,
and it should not be hijacked to air wider objections against the
UK, EU and
global steel industries.
23. Since this application was first submitted in 2017, the
Applicant is also
proposing to provide GHG mitigation which aims to ensure that
the
proposed development does not result in any net additional GHG
emissions,
making it net-zero compliant from day one. That is a significant
step, which
will result in the further removal of the 0.4Mt CO2e annual
operational
13 See, for example, the IEA Net Zero Report, which notes that “The
steel industry remains one of the last sectors using significant
amounts of coal in 2050, primarily due to its importance as a
chemical reduction agent, albeit mostly in conjunction with CCUS.”
(CD8, p. 1906), and that steel is “among the most challenging
sectors to decarbonise” (CD8, p. 1962); and p. 49 of the UN
Emissions Gap Report 2020 at CD8, p. 389.
30
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emissions which Lord Deben raised concerns about in his letter to
the
Secretary of State earlier this year.14 As far as the Applicant is
aware, this
would be the first net-zero, or even close to net-zero, compliant
metallurgical
coal mine in the world. Rather than having a negative effect on the
UK’s
climate diplomacy image and efforts, as a number of objectors
have
suggested,15 it will provide a positive example of the difficult
decisions that
need to be taken to support the transition.
24. The GHG Assessment submitted in support of the proposal
demonstrates
what steps will be taken to avoid and reduce nearly 80% of the
likely CO2e
emissions of the mine.16 Although every step will be taken to
ensure that
GHG emissions are avoided and reduced insofar as is possible in the
first
place, there will inevitably be some residual emissions which will
then need to
be offset. Friends of the Earth has indicated that it will be
calling additional
evidence which challenges the use of offsets, which the Applicant
will
respond to in due course. However, at this stage, it is important
to note that
offsets will only be used as a last resort, a commitment that is
specifically
required by the wording of GHG review mechanism in the section
106
agreement.17
25. The GHG Assessment demonstrates that the Proposed Development
will not
give rise to any significant effects on the environment from GHG
emissions.
Furthermore, it shows that the proposal complies with relevant UK
Carbon
Budgets and the Government’s Industrial Decarbonisation Strategy,
which
does not rule out the use of coking coal as a net zero compliant
option going
14 CD 8.13. 15 See, for example, para. 5.2.4 of [SLACC/BW/1]. 16
See section 5 of the GHG Assessment at [WCM/CL/2], pp. 13 – 17. 17
See para. 12.1.2 of the draft section 106 obligation, which states
that “the Acquisition of Carbon Offsets shall
only be used as a last resort to offset any GHG Emissions that are
not capable of being mitigated by Primary GHG Mitigation Measures
and Secondary GHG Mitigation Measures”.
31
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forward, but instead notes that “any mining of the coal itself
needs to be net
zero compliant in the future”.18
26. In truth, the real objection relates not to the GHG emissions
associated with
the construction and operation of the mine, but the GHG emissions
which
might be caused by the use of that coal (once blended into coke) in
blast
furnaces to make steel.19 There are number of formidable
difficulties with this
objection.
a. First, it is not consistent with the general approach that is
taken to the
assessment of development proposals and their environmental
effects.
The decision-maker is concerned with the effects of the Development
for
which consent is sought, not the effects of other completely
unconnected
developments that may use products made (or extracted) by the
Development. For example, when considering a proposal for a car
factory,
it is not appropriate to try to predict the GHG emissions, air
quality effects
or noise impacts that may arise from the subsequent use of those
cars. Any
such “assessment” would be highly speculative depending on
many
unknown variables so as to be largely meaningless. Similarly,
when
considering proposals for an aggregates quarry, there is no
requirement to
assess the environmental effects of the road that may be
constructed with
that aggregate or the cement that it might produce. The
difficulties with
attempting to adopt such an approach are obvious (as is set out
further
below).
b. Second, the steel industry is already heavily regulated. In
addition to
planning controls, it is also subject to environmental permitting
and
emissions caps.
18 CD 8.14, p. 53. 19 See, for example, pp. 23 – 25 of SLACC/PE/1;
pp. 16 – 17 of SLACC/MG/1; pp. 28 – 31 of SLACC/PB/1; pp. 14 – 18
of FOE/JB1; and paras. 4.1 – 4.2 of FOE/JC1.
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c. Third, the approach advocated by the Rule 6 Parties would result
in
considerable double-counting and render the assessment of
environmental effects meaningless.
d. Fourth, the Applicant cannot have any control over the GHG
emissions
of the coke-maker or steelworks using coal which it has extracted.
If it was
necessary to quantify and assess the GHG emissions from those
operations as part of the consideration of this proposal, it would
not be
possible to differentiate between the emissions from different
steelworks.
For example, no consideration would be given to the fact that
one
steelworks may have integrated carbon capture and storage and
another
might not. Moreover, there would be no opportunity to encourage
or
impose additional mitigation at the steelworks through the
determination
of this application. Again, these sorts of difficulties would
render any
assessment of those effects at this stage meaningless.
27. This position which the Applicant has consistently taken on the
approach to
the assessment of the GHG emissions caused by the end use of the
coal which
it extracts has now been broadly considered and upheld by the High
Court in
R (Finch) v Surrey County Council [2020] EWHC 3566 (Admin). Whilst
that
decision remains subject to an outstanding appeal, it is noted
that, in contrast
to this case, that case related to the combustion of oil in motor
vehicles, where
it was said that there was not any other mechanism of control.20
Indeed, even
in Finch, it was not suggested that it was necessary to assess the
GHG
emissions of the oil refinery.21 Accordingly, the rationale for not
assessing the
GHG emissions of blast furnace steel production in the present case
is even
stronger.
33
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28. Even if it was appropriate to take into account GHG emissions
caused by the
end-use of WCM’s coal as a material consideration in the
determination of
this application, it will be the Applicant’s case that this cannot
be given any
material weight since those emissions would simply be replacing
emissions
that would otherwise occur irrespective of whether the Development
receives
consent.
29. Mr Truman will explain why it is likely that WCM coal will
provide an
attractive replacement to higher cost American coal that comes
with
significantly higher associated GHG emissions, and refer to real
world
examples which illustrate the USA’s role as a “swing supplier”. He
will also
explain why Professor Ekins’ reliance upon general supply and
demand
arguments to dispute the likely effect of substitution is overly
simplistic and
fails to have regard to specific characteristics of the coking coal
market.22
30. Accordingly, it will be shown that the Application is
consistent with Chapter
14 of the NPPF and will not have any significant or unacceptable
climate
change impacts. On the contrary, if anything, the likely climate
change effects
of the Development weigh in favour of the scheme.
Effect on character and appearance of the area
31. Given the scale of the proposed development, it is striking
just how limited
its landscape and visual impacts actually are.
32. The Main Mine Site is located on previously developed land, and
provides the
opportunity to develop (and eventually restore) this brownfield
site that has
lain derelict for around 20 years. It is agreed by Friends of the
Earth’s witness,
22 These include: the way that HVA coking coal is benchmarked
against the spot price of low volatile coking coal; the process of
blending coking coal to make coke; and regulations restricting and
disincentivising additional carbon emissions.
34
13 wh32711080v1
Mr Radmall, that landscape and visual benefits will arise from the
removal of
this “area of derelict land that has a blighting influence on the
locality”.23 It is
also agreed that the mounds which are proposed to screen much of
the
development at the Main Mine Site “have a naturalistic profile with
the
potential to integrate with the local topography”.24
33. It is true that the Main Mine Site will not be screened
entirely from view, but
nor would it be appropriate to do so. The Development will be a
significant
new local employer occupying a previous industrial site within the
town of
Whitehaven and it is right that it should be visible, to a certain
extent, rather
than completely hidden from view. Furthermore, much of the Main
Mine Site
will be enclosed within modern domes, which are well-designed and
are a far
cry from the visual clutter associated with many traditional
minerals sites.
34. The conveyor to transport the coal to the rail loading facility
(“RLF”) will be
buried underground, so that only temporary landscape and visual
effects will
arise from its construction.
35. Aside from views from individual dwellings along High Road, the
only
significant landscape and visual effects will arise from the
construction of the
RLF in the Pow Beck Valley. However, these effects must be seen in
context.
The need for the RLF has arisen out of the decision to pursue a
sustainable
transport solution, which will see all coal exported from the
Development by
rail rather than road.
36. The RLF will maximise the use of existing infrastructure by
being constructed
alongside the existing railway line that already runs through the
Pow Beck
23 FOE/PR1, para. 4.26. 24 FOE/PR1, para. 4.19.
35
14 wh32711080v1
Valley. That is the only practical site where it could be located.
However, that
being so, the Applicant has taken every step possible to minimise
any adverse
effects. The RLF will also be a structure of interest to
visitors.
37. The Applicant will continue to try and resolve the recent
technical dispute
that has arisen regarding the quality of the visualisations
provided in the LVIA
through the landscape statement of common ground. However, it will
be the
Applicant’s case that a proportionate approach should be adopted to
the
assessment of landscape and visual effects. Given the nature of
this
development, it was (and is) not considered necessary to produce
Type 4
visualisations, and Mr Flannery will expand on this in the round
table session.
The Council agreed when it considered the proposed development,
noting
that scope of the LVIA was agreed and “sufficient information has
been
submitted to enable the nature of the development and its effects
on
landscape and visual amenity to be judged”.25 Indeed, it is
precisely because
of the relatively limited landscape and visual effects of the
Development that
it is not necessary to have Type 4 visualisations that comply with
the SNH
guidance.
38. Overall, it will be shown that the landscape and visual effects
of the
Development comply with policy and are acceptable when considered
as a
whole.
Effect on biodiversity
39. It is now clear from the ‘rebuttal’ proof provided by Dr
Martin, on behalf of
SLACC, that the areas of disagreement between the parties on the
ecological
effects of the scheme are relatively limited.
25 See para. 6.141 of the Committee Report dated 19 March 2019 at
CD 4.1, p. 37.
36
15 wh32711080v1
40. Dr Martin does not dispute, or seek to challenge, the findings
of the HRA.26
Nor does he challenge any of the conclusions regarding the
ecological impacts
and proposed mitigation (where necessary) for the development of
the Main
Mine Site, RLF and Main Band Colliery.
41. The areas of dispute essentially relate to:
a. The impact on Roska Park / Benhow Wood and Bellhouse Wood,
including the adequacy of the surveys undertaken for wildlife in
these
woods; and
b. The biodiversity net gain calculation.
42. As Dr Shepherd explains, there is some uncertainty over the
extent to which
Roska Park / Benhow Wood comprises Ancient Woodland due to
the
historical industrial use of part of the woodland for quarrying and
lime
production, which may explain why it has not been included in the
ancient
woodland inventory (unlike Bellhouse Wood), and would affect its
status in
policy terms.27
43. Dr Shepherd will explain why the surveys undertaken in respect
of it were
proportionate and in accordance with relevant guidance. However,
and in any
event, the Applicant now proposes to avoid any disturbance of
these
woodlands altogether by altering the construction method for the
buried
conveyor from ‘cut and cover’ to a trenchless construction for
these sections
of the route that would utilise ‘pipe-jacking’.
26 See para. 3 of SLACC/PB/2, Appendix 4, p. 33. 27 See para. 2.10
of WCM/PS/3.
37
16 wh32711080v1
44. The avoidance of any loss of ancient woodland clearly
represents a significant
improvement to the scheme that was previously considered by the
Council,
and addresses the principal ecological issues raised by the Rule 6
Parties,
particularly SLACC.28 It is therefore surprising that these parties
have
objected to the amended method of construction which would remove
this
harm altogether, instead inviting the Inspector to consider the
proposal on
the basis that the loss of ancient woodland should be retained as
part of the
scheme. This disappointing response suggests that the Rule 6
Parties have no
serious interest in protecting the Ancient Woodland or how best to
avoid any
adverse effects, and are simply seeking to stop the development at
any cost.
45. In any event, the ‘Wheatcroft’ objection raised by SLACC
(and
apparently supported by FOE)29 is completely unsustainable. As
the
Applicant has already set out in correspondence,30 in order make
out a
substantive objection to this ‘amendment’ to the scheme, it is
necessary to
demonstrate that the change proposed is so substantial that the
amended
development is not in substance that which planning permission
was
originally applied for (R (Holborn Studios Limited) v London
Borough of Hackney
[2017] EWHC 2823 (Admin), per John Howell QC at [66]). It is
simply
inconceivable that a relatively minor change to the construction
methodology
for two small sections of an underground conveyor could result in
a
substantial change to the Development and no explanation has been
given by
SLACC as to why this is the case. Far more significant amendments
are
routinely made to developments without falling foul of this
principle. Indeed,
were it not possible to make such amendments it would be
virtually
impossible to impose appropriate conditions to mitigate harmful
effects that
28 See paras. 6.1 – 6.10 of SLACC’s Statement of Case at CD 15.4,
pp. 108-109. 29 FOE initially supported SLACC’s letter dated 23
August 2021, but then subsequently noted that it was a matter for
SLACC since it was not presenting any evidence on this issue. 30
See letter from Ward Hadaway dated 26 August 2021.
38
17 wh32711080v1
are found to exist following disputed evidence on a topic, which is
the point
of the EIA process in the first place. Insofar as SLACC’s
procedural fairness
and EIA complaints are concerned, these are addressed through
the
publication of the regulation 22 request, which will be consulted
upon, and
the opportunity to consider and address the amended proposal during
the
inquiry process.
46. A biodiversity net gain assessment has been carried out by
BSG
Ecology Ltd using the latest DEFRA metric 3.0. This indicates that
the
Development will deliver a net gain of greater than 10% over the
lifetime of
the project over the current baseline value of the site, and Dr
Shepherd will
explain why the calculation is robust and should be preferred over
Dr Martin’s
“simple sense check model”.31
47. As with the landscape and visual effects, the Applicant will
seek to further
narrow and clarify the areas of dispute in advance of the round
table session
on ecology through a topic-specific statement of common
ground.
Economic benefits
48. The Development will undoubtedly provide substantial economic
benefits at
a local, regional and national level. As Mr Kirkbride’s evidence
sets out, these
include:
a. The provision of up to 532 permanent staff positions (averaging
491 direct
jobs over the lifetime of the project), with average salaries at
around 1.86
times the UK average, and a commitment to fill 80% of these
positions
from the local community wherever possible.
31 Para. 3.6 of SLACC/TM/1.
39
18 wh32711080v1
b. The offer of up to 50 local apprenticeships over a rolling 24 –
36 month
period, and collaboration with local educational providers, such as
The
Lakes College at Lillyhall, to develop training course curricula
based on
WCM’s future needs.
c. The creation of 1,077 indirect and induced jobs in the wider
supply chain.
d. An average beneficial impact on annual regional output of
£299m,
supporting 637 regional positions, with an average regional GVA
of
£185m.
e. An average annual additional impact on national output of £495m,
with
an average national GVA of £380m.
f. The export of WCM coal to the EU would be likely to result in a
1.8%
improvement in the existing balance of trade deficit, which
currently
stands at £14.3 billion.
49. Mr Kirkbride’s analysis is further corroborated by the detailed
independent
economic analysis carried out by NERA Economic Consulting.32 In
contrast,
Ms Diski’s evidence, on behalf of SLACC, does not provide any
alternative
analysis of the economic benefits. It does not appear to be based
upon any
understanding of the operational requirements of the Development,
and
cannot provide any justifiable challenge to the evidence of Mr
Kirkbride on
this issue.
50. The clear and sub