UK Coal Haulier to Axe Nearly 900 Jobs

Britain's largest rail haulier has said it expects to cut its workforce by almost 900 chiefly because of the slump in coal transported to UK power plants.

“The rail freight industry is facing unprecedented challenges with the dramatic decline in core markets such as coal,” DB Cargo UK said. The wholly-owned subsidiary of German state rail firm Deutsche Bahn said October 18 its proposed redundancy plan is a response to "rapid and unprecedented changes in the markets it serves."

It proposes a potential reduction of its workforce by 893 roles across the business, a further downsizing of its locomotive and wagon fleet, and a reduction in the number of its operational sites. No final decisions have been taken at this stage, it stressed, as all proposals are subject to formal collective and individual consultations. Rail trade union RMT leader Mick Cash called the news "devastating" but blamed "cut-throat practices in the UK rail freight industry" and a lack of government support.

Photo credit: DB Cargo UK

Coal used in UK power generation in 2Q 2016 was a record-low of 4.6 TWh, down 71% year on year, as more and more coal-fired plants were definitively shut. Overall UK power generation was flat, but gas’s share of the 2Q power generation market was up 15 percentage points whereas coal's plummeted by almost the same amount.

Coal-fired generation in the UK has become much less profitable owing to low gas wholesale prices and the rising carbon floor (the UK's top-up carbon tax) currently £18/metric ton of carbon dioxide (t/CO2) from 2016-17 out to 2019-20.

Last week EDF Trading said it plans to divest its global coal and freight trading business to Japanese LNG joint venture Jera by the end of 2016.

Mark Smedley