Siemens Support for Adani Mine Drives ‘Largest Climate Destruction Project on Planet’
After the storm of protest and mockery that greeted President and CEO Joe Kaeser’s decision to supply essential signalling equipment to the Adani mega-coal mine in Australia, German industrial giant Siemens shouldn’t even assume the project makes economic sense, according to a senior advisor to the Australian government.
In a guest post for the Institute for Energy Economics and Financial Analysis (IEEFA), Rob Henderson says it isn’t too late for Siemens to bow out of the Adani project and its 700 million tonnes of carbon pollution per year, enough to make it “the largest climate destruction project on the planet”.
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“Adani’s Carmichael mine has been approved by the federal and state governments, despite strong representations against the mine by Australian and overseas scientists and despite widespread public opposition,” writes Henderson, a former chief economist at the National Australia Bank and Germany’s Dresdner Bank, now serving as senior policy advisor to the Australian Treasury and Department of Prime Ministers and the Cabinet. But even then, it wasn’t a done deal that the intensely controversial project would proceed.
“There were real prospects that, had Siemens reversed its position and refused to be associated with the project, other potential partners of Adani would have fallen away, and the project would have been shelved. All the more since other providers had previously declined to work with Adani,” Henderson writes.
Instead, “Siemens is now one of the proponents of a mine which commences the opening up of the Galilee Basin, estimated to add 30% to global seaborne traded coal capacity. This would contribute an extra 700 million tonnes of greenhouse gas emissions per year, or over 20 billion tonnes over the 30-year life of the mines. This is enough to consume 7% of the world’s remaining carbon budget.”
Henderson points to the domestic financial institutions and suppliers that have turned down any role in the project, noting that “Australian banks and finance houses are actually happy to move away from old-world fossil fuels investments, with projected declining export demand, towards new industries such as solar and wind farms. The attractiveness of investing in green energy is made more palatable by the rapidly growing green bond market, allowing lenders to free up capital by securitizing green projects.” All of which adds to the risk for Siemens in tying itself to Adani’s success.
“Some analysts suggest the mine, if it goes ahead, will become a stranded asset,” he writes. And “the short-term profit from Siemens’ proposed work for Adani should surely be weighed against the enormous reputational risk Siemens would face by participating. The damage to Siemens’ brand and the consequential potential loss of respect for Siemens across the rapidly-expanding renewable energy sector, where many of its leaders take strong stands on halting climate change, will no doubt have commercial consequences in the medium and even short term. Hence, even commercially, Siemens associating itself with the Adani mine makes little sense.”
Henderson adds there’s still time for Siemens to reverse a bad decision. “Millions of people around the world and the leaders of green firms globally would applaud the company if they did so,” a result that “would place the company with the entrepreneurs of the future, not the Luddites.”