The future of coal
Over past centuries, coal has helped power economic development and lifted billions of people out of poverty. Coal’s role has accelerated since 2000, with global consumption increasing by almost two-thirds, driven by its rising use in China and India. The global coal trade doubled to 1.5 billion tonnes a year over the same period. With a rapidly expanding supply from Australia and Indonesia meeting this demand, as well that of other major importers including Japan and South Korea, the global coal landscape was effectively redrawn.
At the same time, coal was emerging as a leading contributor to climate change and air pollution. To keep within sight of the Paris Agreement target of restricting global warming to ‘well below 2C’, coal burning for power must decline rapidly, leaving the energy systems of advanced economies by 2030, and of developing economies by 2050. However, it is the urgent need to address air pollution and the increasing competitiveness of renewables that are hastening change in countries that depend on coal.
Hopes of an early and rapid decline were raised in 2013, when China’s coal consumption peaked earlier than expected. China is the largest single determinant of coal demand, accounting for almost half of all global coal consumption and one in every four tonnes of traded coal. Global coal demand fell in turn, declining from 2013 to 2016. But with a small increase in demand last year, there are now concerns that coal may cling on, plateauing rather than declining at the pace required.
The future of coal remains an urgent question. Global trends mask different regional stories – while climate and air quality policies, the emergence of shale gas and the collapsing cost of renewables have all added to coal’s decline among many member states of the Organization for Economic Cooperation and Development (OECD) and in China, rising demand in parts of Asia have largely offset these falls. While an international consensus on the need for a fast and orderly coal phase out is forming, exporters of coal and related technologies continue to hold hopes of a future market for coal in these countries. The risk is that despite the disruption that coal is facing in established markets, new coal supply and demand infrastructure continues to be developed, and that once in place, it will lock out cheaper and cleaner energy technologies. Kholodnaya Balka mine in Makiivka, Donetsk Region
I M AG E S
G E T T Y
12 | the world today | august & september 2018