The pandemic abruptly slowed the global march of coal. But demand for the world’s dirtiest fuel is forecast to soar this year, gravely undermining the chances of staving off the worst effects of global warming.
Burning coal is the largest source of carbon dioxide
emissions, and, after a pandemic-year retreat, demand for coal is set to rise
by 4.5 percent this year, mainly to meet soaring electricity demand, according
to data published Tuesday by the International Energy Agency, just two days
before a White House-hosted virtual summit aimed at rallying global climate
action.
“This is a dire warning that the economic recovery from the
Covid crisis is currently anything but sustainable for our climate,” Fatih
Birol, the head of the agency, said in a statement.
Coal is at the crux of critical political decisions that
government leaders need to make this year if they are to transition to a green economy. Scientists say greenhouse
gas emissions need to be halved by 2030 in order for the world to have a
fighting chance at limiting dangerous levels of warming.
In short, this a historic juncture for coal.
For 150 years, more and more of its sooty deposits have been
extracted from under the ground, first to power the economies of Europe and
North America, then Asia and Africa. Today, coal is still the largest source of
electricity, though its share is steadily shrinking as other sources of power
come online, from nuclear to wind.
Global spending on coal projects dropped to its lowest level
in a decade in 2019. And, over the last 20 years, more coal-fired power plants
have been retired or shelved than commissioned. The big holdouts are China,
India and parts of Southeast Asia, but, even there, coal’s once-swift growth is
nowhere as swift as it was just a few years ago, according to a recent
analysis.
In some countries where new coal-fired power plants were
only recently being built by the gigawatts, plans for new ones have been
shelved, as in South Africa, or reconsidered, as in Bangladesh, or facing
funding troubles, as in Vietnam. In some countries, like India, existing coal
plants are running way below capacity and losing money. In others, like the
United States, they are being decommissioned faster than ever.
Nonetheless, demand is still strong. “Coal is not dead,”
said Melissa C. Lott, research director for the Center for Global Energy
Research at Columbia University. “We have made a lot of progress, but we have
not made that curve.”
Coal is the lightning rod of climate diplomacy this year, as
countries scramble to rebuild their economies after the coronavirus pandemic
while at the same time, stave off the risks of a warming planet. The Biden
administration has leaned on its allies Japan and Korea to stop financing coal
use abroad. And it has repeatedly called out China for its soaring coal use.
China is by far the largest consumer of coal, and is still building coal-fired
power plants at home and abroad.
“The principle of common but differentiated responsibilities
must be upheld,” Mr. Xi said at his own global summit in the city of Boao.
‘Growing opposition against coal’
Since the start of the industrial era, coal has been the
main fuel to light up homes, power factories and, in some places, to cook and
heat rooms, too. For over a century, Europe and the United States consumed most
of the world’s coal. Today, China and India account for two-thirds of coal
consumption.
Other energy sources have joined the mix as electricity
demand has soared: nuclear, wind, and, most recently, hydrogen. Coal made room
for new entrants but refused to retreat.
Today, several forces are rising against coal. People are
clamoring against deadly levels of air pollution, caused by its combustion.
Wind and solar energy, once far costlier than coal, are becoming competitive,
while some countries are facing a glut of coal-fired plants already built.
So, even in countries where coal use is growing, the pace of
growth is slowing.
In South Africa, after years of lawsuits, plans to build a
coal-fired power station in Limpopo Province were canceled last November.
In at least three countries, Chinese-funded projects are in
trouble or dead. In Kenya, a proposed coal plant has languished for years
because of litigation. In Egypt, a planned coal plant is indefinitely
postponed. In Bangladesh, Chinese-backed projects are among 15 planned coal
plants that the government in Dhaka is reviewing, with an eye to canceling them
altogether.
Pakistan, saddled by debts, announced a vague moratorium on
new coal projects. Vietnam, which is still expanding its coal fleet, scaled
back plans for new plants. The Philippines, under pressure from citizens’
groups, hit the pause button on new projects.
“Broadly speaking, there’s growing opposition against coal
and a lot more scrutiny right now,” said Daine Loh, a Southeast Asia power
sector energy specialist at Fitch Solutions, an industry analysis firm. “It’s a
trend — moving away from coal. It’s very gradual.”
Money is part of the problem. Development banks are shying
away from coal. Japan and Korea, two major financiers of coal, have tightened
restrictions on new coal projects. Japan is still building coal plants at home,
rare among industrialized countries, though Prime Minister Yoshihide Suga said
in October that his country would aspire to draw down its emissions to net-zero
by 2050.
There are some big exceptions. Indonesia and Australia
continue to mine their abundant coal deposits. Perhaps most oddly, Britain,
which is hosting the next international climate talks, is opening a new coal
mine.
And then there are the world’s biggest coal consumers, China
and India.
China’s economy rebounded in 2020. Government stimulus
measures encouraged the production of steel, cement and other industrial
products that eat up energy. Coal demand rose. The capacity of China’s fleet of
coal-fired power plants grew by a whopping 38 gigawatts in 2020, making up the
vast majority of new coal projects worldwide and offsetting nearly the same
amount of coal capacity that was retired worldwide. (One gigawatt is enough to
power a medium-sized city.)
Coal’s future in China is at the center of a robust debate
in the country, with prominent policy advisers pressing for a near-moratorium
on new coal plants and state-owned companies insisting that China needs to burn
more coal for years to come.
India’s coal fleet is growing as well, bankrolled by
state-owned lenders. There is not much of a signal from the government that it
wants to reduce its reliance on coal, even as it seeks to expand solar energy.
The government in New Delhi is allowing some of its oldest, most polluting coal
plants to remain open, and it is seeking private investors to mine coal. If
India’s economy recovers this year, its coal demand is set to rise by 9
percent, according to the I.E.A.
But even India’s coal fleet isn’t growing as fast as it was
just a few years ago. On paper, India plans to add some 60 gigawatts of coal
power capacity by 2026, but given how many existing plants are operating at
barely half capacity, it’s unclear how many new ones will ultimately be built.
A handful of state politicians have publicly opposed new coal-fired power
plants in their states.
How much more coal India needs to burn, said Ritu Mathur, an
economist at The Energy & Resources Institute in New Delhi, depends on how
fast its electricity demand grows — and it could grow very fast if India pushes
electric vehicles. “To say we can do away with coal, or that renewables can
meet all our demand,” Dr. Mathur said, “is not the story.”
‘The big question is around gas’
What has most quickly come to replace coal in many countries
is that other fossil fuel: gas.
From Bangladesh to Ghana to El Salvador, billions of
dollars, some from public coffers, are being poured into the development of
pipelines, terminals and storage tanks, as the number of countries importing
liquefied natural gas has doubled in less than four years. Gas now supplies
nearly one-fourth of all energy worldwide.
Its proponents argue that gas, which is less polluting than
coal, should be promoted in energy-hungry countries that cannot afford a rapid
scale-up of renewable energy. Its critics say multibillion dollar investments
in gas projects risk becoming stranded assets, like coal-fired power plants
already are in some countries; they add that methane emissions from the
combustion of gas are incompatible with the Paris Agreement goal of slowing
down climate change.
The United States, buoyed by the fracking boom, is among the
world’s top gas exporters, alongside Qatar, Australia and Russia.
American companies are building a gas import terminal and
power station in Vietnam. Gas demand is growing sharply in Bangladesh, as the
government looks to shift away from coal to meet its galloping energy needs.
Ghana this year became the first country in sub-Saharan Africa to import
liquefied natural gas. And the U.S. Agency for International Development has
been promoting gas as a way to electrify homes and businesses across Africa.
And there’s the rub for the Biden administration: While it
has set out to be a global climate leader, it has not yet explained its policy
on advancing gas exports — particularly on the use of public funds to build gas
infrastructure abroad.
“There’s fairly strong consensus around coal. The big
question is around gas,” said Manish Bapna, acting president of the World
Resources Institute. “The broader climate community is starting to think about
what a gas transition looks like.”
