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Global Pollution and Prevention News: A little less coal for China



From: Kieran Cooke, Ecologist, More from this Affiliate
Published December 24, 2013 09:02 AM

A little less coal for China

Coal mining companies in Australia have been enjoying the good life in recent years, making millions of dollars from feeding the seemingly insatiable energy appetites of Asia's tiger economies - particularly that of China. But a new report by the Smith School of Enterprise and the Environment (SSEE) at Oxford in the UK warns that Australia's coal mining party could be coming to an end.

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It says coal demand in China looks likely to fall in the years ahead due to concerns about climate change and other factors, leaving billions of dollars of investments in Australian coal mining projects in jeopardy.

It also gives powerful confirmation to the 'carbon bubble' theory advanced by Carbon Tracker and 350.org - that most of the fossil fuel 'assets' supporting energy company valuations will prove to be unburnable and have no value. 

Stranded Down Under

The report, Stranded Down Under, details the considerable growth of Australia's coal production in recent years. Coal has been one of the main reasons behind the continuing health of the country's economy - it now accounts for 16% of the total value of exports.

Producers want to increase output from the present level of around 440 million tons per year to 550 million tons by 2020, the main part of production going for export.

Altogether investments of AU$100bn (US$90bn) involving 89 projects are planned over the next 15 years according to Australia's federal Bureau of Resources and Energy Economics (BREE).

Water running short

The conservative Coalition government led by Tony Abbott, elected to office earlier this year, is rolling back taxes and environmental regulations in order to encourage mining investments.

The report says weakening global coal prices, plus a likely decline in coal demand in China, by far Australia’s biggest export market, makes the outlook for these projects very uncertain.

"Demand below expectations - and lower coal prices as a result - would increase the risk that coal mines, reserves and coal-related infrastructure could become mothballed or abandoned."

At present China accounts for half the world's coal consumption: it imports more than 30% of its annual needs from Australia.

The report says concerns about the environment and the chronic air pollution experienced by many cities in China will lessen the role of coal in the country's energy mix. Coal needs a lot of water - whether for 'washing' or for driving steam turbines.

Read more at ENN affiliate, the Ecologist.

Coal and China images via Shutterstock combined and morphed by Robin Blackstone.

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