China leads as global coal demand set to reach 9bn tonnes by 2019

The world’s appetite for coal-fired power will continue to grow over the next five years, according to the International Energy Agency’s (IEA) Medium-Term Coal Market Report, released today. The report found that global demand is set to reach 9 billion tonnes by 2019, with China accounting for three-fifths of demand growth.

During this period, the IEA projects that the world’s coal demand will grow at 2.6 per cent, or more than 100 million tonnes (Mt), per year. Low prices due to oversupply, as well as efficiencies and economies of scale put in place by coal producers, will contribute to continuing growth.

China consumed more than 50 per cent of global coal demand in 2013, the report found, importing 341 Mt, the largest amount of coal ever imported in a single year. Indeed, growth in China’s coal use (196 Mt) was larger than global growth (188 Mt).

Unsurprisingly, the IEA said China will “determine the fate of the global coal market”. While the nation has instituted policy measures to reduce its coal use, diversify its energy supply and mitigate carbon emissions, the report found that despite these efforts China’s coal consumption will not peak in the next decade, and it “will be the coal giant for many years in the future” unless its economic growth is much lower than currently forecast.

India, ASEAN countries and other Asian nations will join China as the main engines of growth in coal use, the IEA said. Annual coal consumption in India, which is forecast to become the world’s second largest coal consumer, will grow by 177 Mt, with a 5 per cent average annual growth rate. Meanwhile, the recent spike in European coal use “was only a dream”, the report said ” a temporary spike due largely to low coal and CO2 prices, high gas prices, and the shutdown of Germany’s nuclear plants.

OECD member nations’ coal use is predicted to decline through 2019, with growth in Turkey, Korea and Japan failing to offset declines in Europe and the US. The US’s retirement of coal-fired power plants and competition from shale gas are projected to lead to a 1.7 per cent decline per year to 2019. Australia is set for the largest export growth, while Indonesia, driven by growing domestic demand and policy changes, slows its shipments abroad. à‚ 

The IEA took a strong stance on the world’s coal use, with executive director Maria van der Hoeven saying at the report’s launch: “Although the contribution that coal makes to energy security and access to energy is undeniable, I must emphasize once again that coal use in its current form is simply unsustainable.

“For this to change,” she added, “we need to radically accelerate deployment of carbon capture and sequestration.”

Van der Hoeven also called for more investment in high-efficiency coal-fired power plants, especially in emerging economies. “New plants are being built, in an arc running from South Africa to Southeast Asia,” she said, “but too many of these are based on decades-old technology. Regrettably, they will be burning coal inefficiently for many years to come.”

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