Is this the last nail in the coal coffin?

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Coal headlines this summer have been uniformly catastrophic, with stories like « Renewables overtake coal in US power generation for the first time in 130 years« Du Guardian, »Coal decline continues with 13 plant closures announced in 2020“From Scientific American’s E&E Energy News platform, and”The American coal industry is in irreversible declineFrom Oil Price. While coal has long struggled in the United States, the coronavirus pandemic, of course, has only made matters worse. But while coal has long been in decline in the west, its demise has been much slower in Asia, where coal exporters have been successful in continuing to open up new markets and the twin giants of China and the United States. India continued to depend on coal for a considerable part of their respective national energy mixes. In June, when Oilprice wrote that “2020 will be a brutal year for coalThe report focused primarily on the US coal industry, but it turns out that even Asia sees a bleak future for its coal industry.

« Coal exporters should prepare for the disappointment“Asia Times reported this week, noting that” Asian thermal coal exporters are fighting an uphill battle even in new markets. Exporters who have traditionally relied on China and India for the bulk of their sales now face a future in which the two Asian industry giants push to develop their own coal industries and thus become less dependent. imports, while making plans to shift away from coal and turn to cleaner alternative energies.

Indonesia, the world’s largest exporter of thermal coal, has so far responded by trying to enter new markets, in particular targeting Bangladesh, Pakistan and Vietnam. Indonesia’s entry into these new Asian markets sets off a chain reaction that has an impact on the global coal market. “As a result, Australian and South African thermal coal exporters are not going to do everything they want to in seeking to increase their deliveries to markets such as Vietnam.”

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China and India are not the only major importers of coal that are on the way to drastically reducing their dependence on foreign coal. “South Korea is the third largest thermal coal export destination for Australia, Indonesia and South Africa. However, this month President Moon Jae-in announced that 30 coal-fired power plants will be closed by 2034 and that wind and solar capacity will triple by 2025.

Meanwhile, Japan now plans to shut down 100 coal-fired power units by 2030, as it prepares for its own push in offshore wind.

Meanwhile, it looks like Vietnam, Bangladesh and Pakistan, Indonesia’s new target markets, “will disappoint those who hope for greater growth in demand from these countries.” While Bangladesh has long been viewed as the most promising source of future coal imports “with one of the largest pipelines of coal-fired power generation projects in the world”, the growth in demand that had been considered inevitable now seems more uncertain “now that the Energy Department has sought the Prime Minister’s approval to cancel 13,000 megawatts of coal-fired electricity.” Bangladesh’s abandonment of coal can be attributed to ever more affordable new energy technologies and “increasing difficulties in obtaining finance for coal projects.”

Pakistan, another target market for Indonesia that was once considered a safe bet for the growing demand for coal, has also moved away from foreign coal and “is now giving priority to coal-fired power plants, the hydroelectricity and renewable energies. ” Vietnam has significantly increased its coal imports recently, but it is also moving towards a greener energy strategy focused on renewables for the future.

“According to the IEA, it is the increase in coal exports to Asian markets outside of Japan, China, South Korea and Taiwan that will slow the decline of thermal coal in its central scenario.

With recent actions taken by Vietnam, Bangladesh and Pakistan, this seems less likely, and the decline of thermal coal at sea threatens to look more like the accelerating decline of the sustainable development scenario.

Asia has stood out in its allegiance to coal while the rest of the world has largely moved away from the particularly dirty and high emission fossil fuel. Like some of the world’s last holdouts, the potential death of coal in Asia has major implications. It marks the end of an era for a big global industry, but it also marks a victory for clean energy programs and the fight against climate change.

By Haley Zaremba for OilUSD

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