OSLO Feb 25 Norway's $830 billion oil fund should not, as proposed in parliament, shun the coal sector as that would discourage investment in sophisticated technology needed to cut emissions, the head of the global coal lobby said.
"Banning investments in coal assets will do nothing in reducing demand for coal," Milton Catelin, Chief Executive of the World Coal Association told Norway's Parliament on Tuesday. "But it will reduce the investments in companies that are interested in reducing their environmental impact."
Norway's parliament is considering a motion to ban its oil fund, which owns more than 1 percent of all global shares, from investing in coal firms because of environmental concerns.
The motion is opposed by the minority government but the majority of the parties support some sort of ban, raising the chance that parliament would pass a motion.
"Our concern is about the quality of the investors," Catelin told a parliamentary committee hearing. "(If the fund were to sell out) it would be a sign that the shares should move to another tier of ownership.
"It will reduce investments in companies that are focused on reducing their environmental impact ... it will make them less likely to invest in clean technologies."
Coal is used to generate 41 percent of the globe's energy needs. High gas prices and cheap coal have encouraged the use of coal in recent years, resulting in surging demand. (Reporting by Gwladys Fouche; editing by Keiron Henderson)