Rio Tinto sees carbon capture as key to future coal use

SYDNEY, Sept 9 (Reuters) - Global miner Rio Tinto Plc (LSE: RIO.L - news) called on Tuesday for governments and industry to step up efforts to find ways to cut emissions from coal generation, because coal would remain the biggest source of power globally for decades to come.

Rio Tinto (Xetra: 855018 - news) 's energy chief executive Harry Kenyon-Slaney said expanding other fuel sources, like shale gas, nuclear and renewables would be important in fighting climate change, but coal use would continue to grow to meet the needs of developing countries, as it was the cheapest source of power.

"We have to acknowledge that the 'iron laws of arithmetic' ... dictate that coal will remain a mainstay of that energy supply. And we simply have to make that equation square with greatly reduced CO2 emissions," Kenyon-Slaney said in a speech in Sydney.

Australia is the world's largest coal exporter and is reliant on fossil fuel for transport and energy. About 80 per cent of electricity is produced by coal-fired power stations.

Earlier this year it scrapped a carbon tax and plans for what would have been the world's third largest emissions trading scheme (ETS) after Europe and Guangdong.

Rio Tinto vocally supported the repeal of the carbon tax and ETS, which was a key policy of conservative Prime Minister Tony Abbott's 2013 election campaign, arguing that it would have imposed unnecessary additional costs on the sector.

Kenyon-Slaney said cleaning up coal-fired power through carbon capture and storage, where CO2 is captured from power plants and stored back in the earth, may contribute more to cutting emissions than just expanding the use of cleaner fuels.

"Breakthroughs in low-emissions coal generation will be fundamental. They could break the back of this problem," he said.

"CCS is technically available," Kenyon-Slaney said, pointing to the use of the technology in oil drilling. "Applying it to power generation is primarily a commercial challenge. And they can be met through technology and cost reductions."

Carbon capture and storage remains at the experimental stage and is highly expensive. (Reporting by Melanie Burton; Writing by Sonali Paul; Editing by Michael Perry)