Asia’s coal conundrum

Australia’s major export, coal is being blamed for the country’s catastrophic bushfires. As Nicholas Nugent reports, these may force the government, and those of Asian nations to which Australia exports coal, to reconsider future energy plans

It used to be said that ‘coal is king’. It drove industrial revolutions in Europe and North America and remained until recently the most important source of electricity generation on both continents. But that is changing. Coal consumption in the United States has halved in the past ten years, while Britain last year boasted of a two-week period when no coal was used to generate electricity. France aims to stop using coal to make electricity by 2021, while Britain’s target is 2025.

The trend away from coal has come about because of plentiful supplies in the US of fracked shale gas, whose carbon emissions are lower than coal’s, and in Europe a dramatic fall in prices of alternative energy sources, including wind turbines and solar panels. In the developed world, coal is now the number one enemy of climate activists, who believe the quickest route to achieving the target of net zero carbon emissions is to ban its use.

Yet coal still drives Asia and is likely to do so for several decades. China, for example, burns more coal than all the rest of the world. It cannot produce enough to meet its needs and imports the balance from Indonesia and Australia.

India, another major economy driven by coal, burns more than the whole of Europe. If current trends continue, India will leapfrog the United States to take second place behind China in the global blacklist of carbon-emitting countries. Add in Australia and major Asian coal-consuming countries such as Japan, South Korea, Taiwan, Vietnam and Indonesia and it is easy to understand why Asia has such a bad name among climate activists.

Coal-fired power stations remain the main source of electricity in Asia

According to the BP Statistical Review of World Energy 2019, three-quarters of all consumed coal is burned in these countries, while half of all traded coal originates from Australia and Indonesia. Coal-fired power stations remain the main source of electricity in Asia and – according to the Swiss bank UBS – are likely to remain so well into the 2030s. On present projections, the last such power station may not close until the late 2070s. Yet all Asian countries have signed up to the 2016 Paris Agreement target to keep global warming ‘well below 2 degrees’.

Not everyone agrees that coal is the chief climate change ‘villain’. Some countries argue that petrol and diesel are the main causes of global warming and prefer to support moves towards electric vehicles (EV). Yet the electricity they run on needs to be generated. Some countries have yet to produce enough electricity for industrial and domestic purposes and are hardly able to factor in vehicular use of electrical energy.

Another debate concerns whether to blame the coal-producing countries like Australia and Indonesia, or to focus attention on the major consumers, such as China and India. These latter continue to build coal-fired power stations because their needs are so great and cannot be fully met by using other hydrocarbons, water, wind and solar power or from nuclear energy – and because they have so much coal.

Yet they are moving away from coal, albeit slowly. China has some of the largest wind farms in the world, equipped with one third of all the world’s wind turbines, according to the International Energy Agency, and is advanced in EV technology. India, which has recently increased to 90 per cent the number of homes connected to the electricity grid, aims to double the capacity of renewable sources to 175 gigawatts by 2022 by building wind farms and ‘solar parks’. An airport in Kerala is fuelled entirely by the sun, using photo-voltaic panels, and the country is beginning to use the same technology to power its railways.

To complicate the blame game, an Indian company, Adani, plans to develop the massive new Galilee Basin coal mine in Queensland, Australia, whose output will be able to fuel Indian power stations for decades. However, it is far from certain that the project will secure financing. According to energy expert Siân Bradley of London’s Chatham House think-tank, ‘most development banks will finance coal only in exceptional circumstances’. The Asian Development Bank, for example, insists on ‘high efficiency, low emissions or clean coal technologies’.

In Bangkok last November, at a forum attended by all Asia’s main coal-burning countries, UN Secretary General António Guterres castigated Asian countries for what he called their ‘addiction to coal’, and repeated the same message at December’s COP25 Climate Change conference in Madrid. His words may have been driven home by recent intense pollution in India, the bushfires in Australia and severe flooding in the Indonesian capital Jakarta, which is vulnerable to rising sea levels as the earth warms.

Some countries argue that petrol and diesel are the main causes of global warming

According to the International Energy Agency, coal still provides 38.5 per cent of the global energy mix so it seems the world will continue to need coal for the foreseeable future. Five Asian countries, China, India, Bangladesh, Indonesia and the Philippines, are building new coal-fired generators, though their plans have been curtailed since the UN Secretary General first called for a moratorium on the use of coal to generate electricity. With more than 40 per cent of global coal reserves in Australia, China, India and Indonesia – according to the BP review – those countries will be hardest hit by the argument that all remaining coal should be left in the ground. As Europe and America reduce dependence on power from coal, so the proportion of coal burnt in Asia goes up. It is now at about 80 per cent.

China has some of the world's largest wind farms
China has some of the world’s largest wind farms

India may argue that it needs coal to alleviate poverty, while China uses coal to continue its industrialisation. Both countries point out that carbon emissions per capita are far below those of advanced European nations. Also, sandwiched between China at the top of carbon emission countries and India in third place is the United States, where Donald Trump, reversing the ‘clean air’ policies of his predecessor, has pledged to revitalise the coal industry. Economics is a factor, though. US shale gas is now much cheaper than mined coal, limiting the prospects of a coal revival. In China nearly three million people work in coal mining, compared with 50,000 in the US. Too rapid migration away from coal would likely cause social problems.

Economics more than lobbying will determine the outcome in East and South Asia, as it has elsewhere. Renewables are getting cheaper while coal mining remains an expensive business, especially the cost of opening up new mines. Yet with climate change affecting those most blamed for its impact in the form of pollution, bushfires and rising sea levels, self-interest is bound to speed up Asia’s migration away from coal.

Nicholas Nugent, who used to report for the BBC, keeps a close eye on developments throughout Asia

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