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Tougher Chinese policies turn screw on global coal demand

Coal will continue to grow, but will be dampened by tough environmental regulations in China, says International Energy Agency

Source: Flickr/FMJ Shooter

Source: Flickr/FMJ Shooter

By Sophie Yeo

New environmental laws in China are slowing the growth of the coal industry worldwide, though use of the fuel is unlikely to peak any time soon, according to the International Energy Agency.

China is responsible for 60% of global demand, but growing anger at heavy pollution linked to coal burning is forcing the government to consider investing in cleaner forms of energy.

The IEA says this is likely to see international demand for coal dip slightly, but over the next five years China is still expected to consume and produce as much coal as the rest of the world combined.

It dominated the surge in coal demand in 2012, generating 165 megatonnes of the 170Mt growth that was added to the global supply. This year significant hydro-power output and slowing economic output saw demand for coal in the power sector diminish.

The IEA’s annual Medium-Term Coal Market report projects that coal will continue to grow at an average rate of 2.3% up to 2018. This is 0.3% slower than last year’s predictions, largely due to efforts by the Chinese government to encourage energy efficiency and diversify its energy mix.

While a combination of low gas prices, environmental regulation and uncertainty over future carbon policy meaning coal consumption in the US will remain far below its peak in 2005-07, IEA director Maria van der Hoeven, said that, as gas prices recover, coal will start to grow there again.

“2013 saw the renewed acceleration of energy demand and investment in China. As a result, our projections show coal demand to pick up in both countries,” she added at the launch of the report in Paris today.

“Like it or not, coal is here to stay for a long time to come.”

Chinese dominance

The new Chinese government faces the twin problems of an expanding urban middle class with growing energy demands and public anger over the thick layer of air pollution that hangs over its major cities.

While environmental concerns are hastening the phase out of the most polluting power plants and accelerating the adoption of cleaner technologies, it remains unclear whether the country will be able to sustain its curtailed coal demand alongside high levels of financial growth.

“Given China’s absolute dominance over coal markets, our projections are strongly subject to Chinese uncertainties,” it says in the report.

Despite efforts from the Chinese, van der Hoeven said that radical action to tackle the CO2 emissions from coal-fired power plants remains “disappointingly absent”, with current plans still putting the world on track to hit 4C of warming. This is twice the 2C limit set by governments on acceptable global warming, and would lead to catastrophic impacts across the globe.

“When it comes to a sustainable energy profile, we are simply off-track – and coal in its current form is the prime culprit,” she said.

“Yet with coal set to remain an integral part of our energy mix for decades to come, the challenge is to make it cleaner.”

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  • MarkDonners

    Coal is destroying the world. Coal is not an integral part of anything except for criminals to profit from the world’s destruction&genocide. Smashing and bankrupting dirty industries like coal and anyone associated with that is the only solution. And while China and its immoral Asian buddies are at it, they should stop poaching of the world’s wildlife, cutting down what’s left of the forests, and wallowing in their only culture, greed. The unspeakable cruelty they display towards pets and animals is a glaring sign pointing to modern Asia’s criminality and immorality.

    • Gabriela

      Such a useful comment…typical of someone enjoying heating in winter, air-conditioning in summer, sufficient meals and a high speed internet connection. Unless you live in the woods, you are, to some extent, part of this “destruction and genocide” process. You write in a perfect English, so I’ll assume you come from an English speaking country. The US? just stop speaking NOW, and start looking at the problems involved by shale gas development (which besides, provided the electricity you used to write your post). Australia ? Look at huge coal mines destroying the soil, and terrible agricultural techniques that every year spread desertification. Kenya? open mines with low security and environmental standards, no monitoring of industries pollution and so on…And if you live in a rich country, you still consume more energy, and so pollute more than a Chinese, because your living standards are just higher. Now, instead of saying that we must banish this coal that is still essential to millions of people’s lives, I suggest you to find out about clean coal technologies already in use where government standards impose them (washing techniques, dust-removing facilities, desulfurization and denitration facilities), and which could ensure electricity and heat for everyone while limiting the environmental impact. The problem is not coal, the problem is low environmental standards and lack of enforcement procedures, in developed countries and in developing ones. No one wants to pay for mines and power-generation facilities upgrading. It’s posher to use solar panels. Besides, solar panels manufacturing is also crazily polluting, as well as their recycling. Finally, I also suggest you look at Victor Hugo’s sentence “the crimes of those who lead are not the fault of those who are led” (referring to the sacking of the Chinese Old Summer Palace by French and British authorities in 1860, the whole letter is worth reading), especially in countries where governments are not elected and partially/totally authoritarian. This is for the Asian “greed culture (…) criminality and immorality”.