By analyst
By Andrew Topf
Just when you thought coal was out, the fossil fuel appears to be back on the burner.
In a sharp reversal of 2016, the world’s biggest coal producers – China, the U.S and India – are mining more coal, despite efforts by the 2015 Paris climate accord to rein in carbon dioxide and other emissions believed to cause global warming. President Donald Trump recently announced he is pulling the U.S. out of the agreement.
The Associated Press reports that coal production through May is up by at least 121 million tonnes for the top 3 coal producers – a 6% increase from the same period last year. The most dramatic rise is in the United States, where coal mining rose 19% in the first five months of the year.
The reasons for this year’s turnaround include policy shifts in China, changes in U.S. energy markets and India’s continued push to provide electricity to more of its poor, industry experts said. President Donald Trump’s role as coal’s booster-in-chief in the U.S. has played at most a minor role, they said.
The up-turn in coal use contrasts with a report released two weeks ago from BP Plc, which said that in 2016, U.S. demand for coal plummeted 33.4 million tons of oil equivalent to 358.4 million – a level not seen since the 1970s. China, the world’s largest energy consumer, burned the least coal in six years. Consumption of coal fell in every continent except Africa last year.
Other recent coal news continues to support the thesis that the fossil fuel is in decline. Three days ago the Chinese government announced that it will not allow coal imports at small ports from July 1, in a move likely to tighten supply of the fuel during summer and support a further rally in prices. Coking coal futures in China soared almost 8 percent last Thursday.
And on June 21, Coal India, the world’s largest producer, said it is closing 37 mines before March next year as it said they are no longer economically viable due to increasing competition from renewable energy sources.
China has committed to capping its greenhouse gases by 2030 and last year shut down hundreds of coal mines, while also forcing others to reduce hours. The measures were aimed at reducing coal supply and boosting prices, though the Chinese government has since relaxed that policy and production is rebounding, states AP.
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Source:: Infomine
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