China has no need for U.S. coal?

Feb. 28, 2013 at 1:56 PM
share with facebook
share with twitter
Sign up for our Energy newsletter

BEIJING, Feb. 28 (UPI) -- A new Greenpeace report suggests that U.S. coal producers have missed a window of opportunity to export coal to China.

China accounts for 47 percent of global coal consumption, the Energy Information Administration said.

But the Greenpeace report, called "The Myth of China's Endless Coal Demand: A missing market for US Exports," cites factors likely to contribute to a drop in China's coal needs, including government policies aimed at reducing pollution, slowing economic growth and increased use of renewable energy.

The Chinese government's 12th five-year plan for the coal sector caps domestic coal production and consumption at 3.9 billion tons by 2015.

"Assuming Chinese coal demand continues to weaken and that it sticks to its policies to curb coal use and increase renewable investment, the Chinese market for US coal exports may dry up before major new US coal shipments ever reach its ports," the Greenpeace report says.

A study released this month by research firm IHS Cera predicts that coal demand in China will peak around 2025 at about 5.1 billion metric tons, up from 3.7 billion metric tons in 2011.

"Many of the same factors that are causing coal to be phased out of the U.S. market -- sluggish economic growth, a rapidly developing renewable energy sector, government policies and social opposition to coal -- are conspiring to make the Chinese market for U.S. coal exports economically unviable as well," Greenpeace East Asia Energy Analyst and report author Lifeng Fang, said in a statement.

Although China burns massive quantities of coal, the report says, it is 95 percent self-dependent for its current use of coal. Furthermore, any increases in domestic coal production or transportation infrastructure could quickly reduce China's current demand for imports.

Because of weak demand from coal consumption sectors, "China's coal is piling up, unused at record levels" at domestic power plants and ports, the report says. For example, the total domestic coal stock reached 373 million tons by the end of September 2012, a 37 percent increase compared to the year before.

Greenpeace also points to China's growing renewable energy revolution which it says "is on pace to undercut the aggressive Chinese coal demand projections upon which U.S. export hopefuls are counting."

Industry estimates indicate that in 2020, solar and wind power could produce 500 to 600 terawatt hours a year in China, equal to about 13-16 percent of the total electricity derived from coal in 2011.

"The only scenario in which it would need to increase its imports to a degree that makes US coal exports viable is if its coal demand continues to increase at the eye-popping growth rates experienced over the past decade," the report states.

Related UPI Stories
Trending Stories