Coal headlines this summer have been uniformly doom-and-gloom, with stories like "Renewables surpass coal in US energy generation for first time in 130 years" from the Guardian, "Coal's Decline Continues with 13 Plant Closures Announced in 2020" from Scientific American's E&E Energy News platform, and "The U.S. Coal Industry Is Declining Irreversibly" from Oil Price. While coal has long been struggling in the U.S., the coronavirus pandemic, of course, only made things worse. But while coal has been on the decline for a long time now in the west, its demise has been much slower in Asia, where coal exporters have managed to keep opening up new markets and the twin giants of China and India have continued to depend on coal for a considerable amount of their respective domestic energy mixes. Back in June when Oilprice wrote that "2020 Will Be A Brutal Year For Coal," the report was mostly focused on the United States coal industry, but it turns out that even Asia is looking at a bleak future for its coal sector.
"Coal exporters should brace for disappointment," Asia Times reported this week, remarking that "Asian thermal coal exporters are fighting an uphill battle even in new markets." Exporters that have historically relied on China and India for the bulk of their sales are now having to face a future in which the twin giants of Asian industry push to develop their own coal industries, and thereby become less reliant on imports, while also making plans to turn away from coal and toward cleaner alternative energies.
Indonesia, the world's single-biggest thermal coal exporter, has so far responded by trying to push into new markets, specifically targeting Bangladesh, Pakistan and Vietnam. Indonesia's move into these new Asian markets sets off a chain reaction that impacts the global coal market. "As a result, Australian and South African thermal-coal exporters aren't going to have it all their own way in seeking increased deliveries to markets such as Vietnam."
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China and India are not the only major coal importers that are on track to greatly reduce their reliance on foreign coal. "South Korea has been 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 wind and solar capacity tripled by 2025.
Meanwhile Japan is now planning the closure of 100 coal-fired power units by 2030 as it gears up for its own push into offshore wind."
Meanwhile, it looks like Vietnam, Bangladesh and Pakistan, the new target markets for Indonesia, "are going to disappoint those hoping for more demand growth from these countries." While Bangladesh has long been considered as the most promising source of future coal imports "with one of the largest coal-power project pipelines in the world," the demand growth that had been considered an inevitability is now looking more uncertain "now that the nation's Power Ministry has sought approval from the prime minister to cancel 13,000 megawatts of coal power." Bangladesh's pivot away from coal can be credited to ever more affordable new energy technologies and "increasing difficulties securing finance for coal projects."
Pakistan, another target market for Indonesia which was once seen as a safe bet for growing coal demand, has also been making a shift away from foreign coal and " is now prioritizing power plants fueled by domestic coal, hydro and renewable energy." Vietnam has significantly increased their coal imports recently, but it too is pivoting towards a greener energy strategy with a renewables focus for the future.
"According to the IEA, it is increasing coal exports to Asian markets outside of Japan, China, South Korea and Taiwan that will slow thermal coal's decline under its central scenario.
With the recent moves by Vietnam, Bangladesh and Pakistan, that is looking less likely, and the decline of seaborne thermal coal threatens to look more like the accelerated decline in the Sustainable Development Scenario."
Asia has stood out in its allegiance to coal as the rest of the world has largely moved away from the especially dirty and emissions-heavy fossil fuel. As some of the last global holdouts, the potential death of coal in Asia has major implications. It marks the end of an era for a major global industry, but it also marks a victory for clean energy agendas and the fight against climate change.
By Haley Zaremba for Oilprice.com
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Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the… More
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Great news for Pittsburgh, Pennsylvania no doubt.