Indian steam coal imports: the great equation

Since 2012, Indian steam coal imports have more than doubled, making India the world’s second-largest coal importer after China. With the decline of Chinese import demand since 2014, India has been considered by many to be the last bastion of significant coal import growth. However, India’s government has announced its intention to cease steam coal imports by the end of 2017. Given the general consensus that India’s coal demand will remain robust, these two diverging positions are thus based on differing perceptions of future coal production in India. This report seeks to establish India’s role in the global steam coal trade through a comprehensive assessment of the ‘coal equation’: supply and demand in relation to India’s coal policy. The report analyzes the major drivers of future coal demand and particularly focuses on the power sector, given its overwhelming share of India’s coal demand. It also looks at the reforms currently underway in the mining sector and their potential to make the sector more efficient, thus facilitating the dramatic growth in production that would be required to make India self-sufficient. The analysis is supplemented by quantitative assessments of steam coal supply and demand to FY2020. The results of these assessments indicate that the government is likely to reach its self-sufficiency goal, but this will be towards the end of the decade, rather than at the end of 2017 as desired. In order to cease steam coal imports, India’s government will specifically need to address constraints relating to the low quality of Indian coal, in addition to resolving transportation and land acquisition issues

US Coal Exports – The Long Road to Asian Markets

Coal demand in the US power sector has decreased significantly since 2008 as competition from shale gas has developed and new environmental regulations has made coal less attractive. To offset the loss on the domestic market, US coal mining companies have turned to the export market. Since 2010, they have actively developed their coal exports and achieved record levels in 2011 and 2012. However, exports have decreased since 2013 as coal prices have fallen and competition between exporters has become fierce. As most US ports are located on the East and the Gulf Coasts, Europe has traditionally be the main outlet for US coal exports. But US steam coal exports collapsed in 2014 because of a loss of competitiveness of US coal in Europe. Due to the current and future importance of Asia in the international coal markets, US exporters have turned their attention to the Asian market and have been able to capture new market shares in Asia. However, US steam coal exports to Asia are constrained by the lack of export capacity on the West Coast despite several proposals to build new export terminals. Recent market development and strong environmental opposition have impeded the development of coal terminals in the Pacific Northwest so far. The report reviews the existing and proposed US coal port infrastructure, with a special focus on the Northwest Coast and steam coal exports. It analyses market, regulatory and environmental challenges US exporters have to face when developing new export routes and it assesses future coal exports according to different scenarios.</p

Indonesia's electricity demand and the coal sector: export or meet domestic demand?

Driven by rapidly increasing electricity demand, Southeast Asia coal demand has surged since 2010. The availability of coal in the region, and its lower cost than competing fuels, has made coal the preferred option to fuel rising power demand. The region added 25 GW of coal-based capacity in the past five years, accounting for 42 per cent of total additional generation capacity. Even the gas-producing countries in the region have introduced more coal in their electricity mix as gas shortages pushed them to diversify their mix. However, this shift compromises the national commitments taken by Southeast Asian governments to reduce their greenhouse gas emissions. In the wake of the Paris Agreement, national governments across the region have started to reassess their power development plans, introducing more renewable energy sources, promoting energy efficiency measures, and reducing the contribution of coal in the electricity mix. This reassessment, however, does not constitute a shift away from coal. Despite the scale back, coal still dominates the targeted additional capacity, followed by natural gas, hydropower, and other renewables: there are 29 GW of coal-based capacity under construction in the region, most of them to be completed by 2020. In addition, there is a huge number of permitted and announced coal-fired power plants in the pipeline, which means that the shift towards coal may continue well after 2020. The growth in Southeast Asian coal demand is therefore mixed: until 2020, it is expected to be steep as more coal-fired power plants are commissioned, but after that date, the rate of growth is expected to slow down significantly. The wide range of outlooks for future coal demand has a significant impact on regional coal trade

China’s Coal Market – Can Beijing Tame ‘King Coal’?

Since 2009, China has turned from a net coal exporter to a net importer, and by a large margin. In 2013, the country accounted for almost a quarter of global steam coal imports. This shift has had a tremendous impact on global trade and prices. China has become a price setter for steam coal after overtaking Japan in 2009 as the world’s biggest importer. Increasing imports have exacerbated oversupply on the domestic market and led to a dramatic fall in coal prices and revenues of coal miners. The government is determine to improve the health of the coal industry, while at the same time combatting air pollution from coal mining, transport and combustion. The new policy measures adopted since September 2013, such as the Airborne Pollution Prevention and Control Action Plan, the mandated reduction in coal production and imports, the ban on low-grade coal imports and sales, have a significant impact on the level of coal supply and demand. Short, medium- and long-term market and policy developments, however, have different impacts on international steam coal trade. This paper analyzes key policy and market developments in the Chinese coal market and their possible impact on global coal trade. It reviews recent policy changes that aim at curbing China’s coal demand and reducing the environmental footprint of coal. The report puts a special emphasis on Chinese coal imports and competition between domestic and imported coal. It assesses the impact of the measures adopted recently by the government on global trade at short, medium and long-term.</p

Indonesia's electricity demand and the coal sector: export or meet domestic demand?

Driven by rapidly increasing electricity demand, Southeast Asia coal demand has surged since 2010. The availability of coal in the region, and its lower cost than competing fuels, has made coal the preferred option to fuel rising power demand. The region added 25 GW of coal-based capacity in the past five years, accounting for 42 per cent of total additional generation capacity. Even the gas-producing countries in the region have introduced more coal in their electricity mix as gas shortages pushed them to diversify their mix. However, this shift compromises the national commitments taken by Southeast Asian governments to reduce their greenhouse gas emissions. In the wake of the Paris Agreement, national governments across the region have started to reassess their power development plans, introducing more renewable energy sources, promoting energy efficiency measures, and reducing the contribution of coal in the electricity mix. This reassessment, however, does not constitute a shift away from coal. Despite the scale back, coal still dominates the targeted additional capacity, followed by natural gas, hydropower, and other renewables: there are 29 GW of coal-based capacity under construction in the region, most of them to be completed by 2020. In addition, there is a huge number of permitted and announced coal-fired power plants in the pipeline, which means that the shift towards coal may continue well after 2020. The growth in Southeast Asian coal demand is therefore mixed: until 2020, it is expected to be steep as more coal-fired power plants are commissioned, but after that date, the rate of growth is expected to slow down significantly. The wide range of outlooks for future coal demand has a significant impact on regional coal trade

The role of coal in Southeast Asia's power sector

Driven by rapidly increasing electricity demand, Southeast Asia coal demand has surged since 2010. The availability of coal in the region, and its lower cost than competing fuels, has made coal the preferred option to fuel rising power demand. The region added 25 GW of coal-based capacity in the past five years, accounting for 42 per cent of total additional generation capacity. Even the gas-producing countries in the region have introduced more coal in their electricity mix as gas shortages pushed them to diversify their mix. However, this shift compromises the national commitments taken by Southeast Asian governments to reduce their greenhouse gas emissions. In the wake of the Paris Agreement, national governments across the region have started to reassess their power development plans, introducing more renewable energy sources, promoting energy efficiency measures, and reducing the contribution of coal in the electricity mix. This reassessment, however, does not constitute a shift away from coal. Despite the scale back, coal still dominates the targeted additional capacity, followed by natural gas, hydropower, and other renewables: there are 29 GW of coal-based capacity under construction in the region, most of them to be completed by 2020. In addition, there is a huge number of permitted and announced coal-fired power plants in the pipeline, which means that the shift towards coal may continue well after 2020. The growth in Southeast Asian coal demand is therefore mixed: until 2020, it is expected to be steep as more coal-fired power plants are commissioned, but after that date, the rate of growth is expected to slow down significantly. The wide range of outlooks for future coal demand has a significant impact on regional coal trade