Even though Canadian thermal coal must be shipped halfway around the world, it remains marketable to Asian countries for several reasons
In mid-June, the federal Liberals announced what sounded like a one-two punch for Canada’s thermal coal sector.
Calling it the fuel of a “previous century,” Prime Minister Justin Trudeau’s government joined with other G7 countries and agreed Canada would no longer finance new thermal coal plants and mines abroad. Meanwhile, at home, his cabinet announced it would apply strict scrutiny to any proposed new thermal coal mines or expansion projects.
But phasing out Canada’s thermal coal sector won’t happen overnight. In fact, if anything thermal coal exports have grown over the past couple years, and may grow further as new markets open up in Asia.
As a result, even as western countries phase out coal production, new plants in Asia mean that peak demand may result in a plateau rather than a gradual decline — and Canada has been sending millions of tonnes overseas for years and in 2019, a new mine in Alberta added millions more.
“We’ll get to peak coal demand in the next few years, if we haven’t hit it already,” said Philip Wagner, principal analyst for the North American coal sector at the research firm IHS Markit. “But demand’s not going to drop off super fast.”