Adani blasted over ‘toxic’ $4bn plan to use Australian coal to make plastic in India

The owners of the controversial Carmichael mine in Queensland want to build a US$4bn plant in India that would use Australian coal to make plastic.

Adani Enterprises, which owns the Carmichael coalmine, said in submissions to Indian authorities the plant will use 3.1m tonnes of coal a year at the plant to make PVC.

Critics said the “toxic” project was an attempt to find a second life for thermal coal at a time when the world was moving away from fossil fuels.

Related: Townsville’s ‘road to Paris’ moment: the slow greening of an Adani stronghold

The company is seeking environmental clearances to build the massive “coal-to-PVC” plant that will take up almost 3 sq km in Mundra, Gujarat..

Adani, which has rebranded in Australia to Bravus Mining and Resources, has begun construction on its Carmichael thermal coalmine in Queensland’s Galilee basin. The divisive mine has been one of the most controversial resources projects in Australian history.

In the submission, Adani Enterprises says the “coal to PVC project” will cost US$4bn (AU$5.2bn) and would use 3.1 Mt of coal imported “mainly from Australia, Russia and other countries”.

The plant would use a highly complex process to produce two million tonnes of polyvinyl chloride (PVC) a year.

Supporters of Adani’s Queensland coalmine have argued the exported coal would be used to produce electricity in power plants and would help lift people out of energy poverty in developing countries such as India and Bangladesh.

Until now, there has never been a suggestion that exported coal from the Galilee basin would be used for anything other than power generation.

Guardian asked Bravus about the proposal and if the coal for the project would be sourced from the Carmichael mine.

In a statement, Bravus said: “India will be a foundation customer for the Carmichael project and is the fourth-largest global user of electricity as well as the source of the biggest growth in global energy demand.

“We have already secured the market for the 10 million tonne per annum of coal produced at the Carmichael mine.

“The coal will be sold at index pricing and we will not be engaging in transfer pricing practices, which means that all of our taxes and royalties will be paid here in Australia.”

In a follow-up statement sent on Friday afternoon, three days after its initial response to the Guardian’s questions and 29 hours after this story was first published, Bravus said: “Carmichael coal, like any other traditional thermal coal, is not suitable for use in plastics. It is suitable for use in energy and electricity generation and has always been intended for that use.

“The planning document for the proposed PVC business refers to sourcing suitable thermal, coking, or petcoke from Australia, Russia and other countries. The PVC facility will require a blend of coals of different specifications which are outside the Carmichael mine production plan.”

Pablo Brait, a campaigner at Market Forces that is pushing investors to pull money out of the Carmichael project, said: “The argument that Carmichael was going to help poor people was never valid in the first place.

“Renewable energy is cheaper and if you want to ensure affordability of electricity then you are better using renewables rather than imported coal.

“This is Adani creating new uses for thermal coal instead of transitioning out of thermal coal. That’s important for investors in the Adani group to know.

“This is a company that is not winding down its thermal coal use, but trying to find new ways to use a resource and avoid Carmichael turning into a stranded asset.”

In its submission, Adani enterprises said the coal will go through several stages of processing, creating calcium carbide and then acetylene, which is further processed to eventually produce PVC.

Adani said India’s demand for PVC is outgrowing supply and is dependant on imports.

Simon Nicholas, an energy finance analyst at the pro-renewables Institute for Energy Economics and Financial Analysis, said there were some projects proposed in China and Pakistan that were looking to find alternative uses for coal, in particular coal-to-diesel and coal-to-fertilisers.

But he said these used cheaper domestic coal, not imported coal, and were government subsidised.

“It’s very expensive to use domestic coal. This does seem to look like a project that’s being proposed to prop up their Carmichael mine.”

Environmental campaign group SumOfUs has launched a petition to pressure Adani’s financial backers to withdraw from the group over the coal-to-plastics project.

The group claimed the coal-to-plastics process was emissions intensive, and described the plans as toxic.