China’s coal consumption may have peaked in 2013, and with it, so have the coal industry’s fortunes.
A new report from the International Energy Agency (IEA) finds that preliminary data suggests that China’s coal consumption in 2015 is lower than 2013 levels. Slower economic growth, lower energy-intensity of growth, and a campaign to reduce air pollution have severely dented the prospects for coal in China, the report finds.
China consumes half of the world’s coal, so what happens in China tends to dictate what happens to coal markets around the world. China tripled its coal consumption since 2000, and it burns about five times as much coal as the United States and India, or about two and a half times as much as those two countries combined.
But the IEA says we could be at a watershed moment, in which China’s coal consumption could be starting to decline. And China’s potential “peaking” of coal consumption led to the first decline in global coal burning in 2014 since the 1990s.
For many years, China’s coal consumption grew at almost identical rates to its GDP. But in 2014, China’s electricity consumption grew at only 3.8 percent while GDP expanded by 7.4 percent, showing the initial phases of a decoupling of energy consumption from growth. China’s steel demand is also way down, reducing demand for coking coal.
Meanwhile, the IEA says that while the near-term effects are uncertain, global environmental policies to address climate change will slash coal demand even further over the long-term.
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