IEA: China might have passed ‘peak coal’ in 2013
China possibly saw its coal consumption peak in 2013, according to the International Energy Agency (IEA).
The seismic shifts underway in China have global implications for both coal use and emissions.
Global coal use fell by 0.9% in 2014, the first fall this century, says the IEA’s Medium Term Coal Market Report 2015. It says demand is “likely” to fall again in 2015, echoing reports that global emissions will fall this year as coal use declines.
As a result, the IEA’s 2020 demand coal forecast is now 10% lower than its previous outlook. Even so, it sees rising demand between now and 2020, reversing the current two-year decline.
Paris perspective
Before getting into the details of the IEA’s coal market report, it’s worth noting that it was written before the Paris climate deal was agreed.
Anticipating that an agreement might be reached, however, the report lays out a series of trends likely to weigh increasingly on coal demand over the coming years.
These include the falling cost of renewables, the spread of CO2 pricing and coal taxes, the divestment movement and development banks and export credit agencies restricting coal finance.
Fatih Birol, the IEA’s chief executive, writes in a foreword to the report that the business case for coal use is diminishing. He writes: “The window of opportunity for high-carbon sources is closing.”
A feature article for the New York Times this week looks at the mass layoffs facing China’s coal mining industry. One miner tells the paper: “There is no future in coal.”
While some reports suggest the Paris deal depressed coal stocks, views differ on its significance for fossil fuel interests. Nonetheless, it would be hard to argue coal’s prospects have improved.
With that in mind, let’s turn to the forecasts in the IEA’s medium-term coal market outlook.
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