Global coal demand slows, peak demand not yet in sight – by Henry Lazenby ( – December 16, 2013)

TORONTO ( – Tougher Chinese policies aimed at reducing the country’s dependency on coal would help restrain global coal demand growth over the next five years, the International Energy Agency (IEA) found in its yearly ‘Medium-Term Coal Market Report’ released in Paris on Monday.

Despite the slightly slower pace of growth, coal would meet more of the increase in global primary energy than oil or gas – continuing a trend that has been in place for more than a decade.

“Like it or not, coal is here to stay for a long time to come. Coal is abundant and geopolitically secure, and coal-fired plants are easily integrated into existing power systems. With advantages like these, it is easy to see why coal demand continues to grow.

“But it is equally important to emphasise that coal in its current form is simply unsustainable,” IEA executive director Maria van der Hoeven said at the launch of the report.

The IEA found that coal was the fastest growing fossil fuel in absolute and relative terms in 2012. About 29% of global primary energy consumption were derived from coal and coal strengthened its position as the second-largest primary energy source, behind oil.

Global coal consumption grew by 2.3%, from 7.53-billion tonnes in 2011, to an estimated 7.7-billion tonnes in 2012. Despite coal demand increasing by 170-million tonnes, demand growth was the third lowest on record over the last decade.

The report found that China was the growth engine of global coal demand. In 2012, China posted the second-lowest demand growth (4.7%) since 2001. Nevertheless, coal consumption increased by 165-million tonnes, to an estimated 3.68-billion.

Measured in energy units, China alone accounted for more than 50% of global coal demand in 2012. Total 2012 Chinese coal consumption was roughly equal to total coal demand of the US since 2009, Japan since 1993 and Germany since 1990. Put differently, China consumed over four times more thermal coal and almost ten times more metallurgical coal (met coal), than the world’s two largest consumers, the US (thermal coal) and Russia (met coal).

In 2012, coal demand in the US decreased by 98-million tonnes – the second-strongest decline ever in the country. Due to the mild winter, low gas prices and plant retirements, coal-fired generation decreased by 235 TWh in 2012, while coal demand plummeted to an estimated 822-million tonnes.

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