China coal decline continues as economy flatlines


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Analysis from Greenpeace suggests use of world’s most polluting fossil fuel by top emitter could be in terminal decline

Most major Chinese cities suffer from severe air pollution caused in part by coal burning (Pic: 大杨/Flickr)

Most major Chinese cities suffer from severe air pollution caused in part by coal burning (Pic: 大杨/Flickr)

By Ed King

China’s coal consumption fell in the first four months of 2015, continuing a marked decline that saw use of the polluting fuel fall 2.9% last year.

Research by Greenpeace indicates coal use in China dropped by nearly 8% on the same period a year earlier

Carbon emissions in the world’s top greenhouse gas polluter are also predicted to have dropped by 5%, an amount equal to the total CO2 output from the UK over the same period.

Greenpeace’s Energydesk team say they based the findings on a variety of sources including China’s industrial output data for April and customs figures which show a 38% drop in coal imports.

One reason for sluggish coal use could be the state of China’s economy, which may experience its worst year in a quarter of a century, Reuters reports.

Accelerating trend

Chinese coal statistics have been questioned by some analysts, who suggest local governments and businesses are “under reporting” use as a result of tougher air pollution laws.

But Lauri Myllyvirta, the analyst who crunched the figures for Greenpeace, told RTCC that while Chinese government data suffered from inaccuracies and bias, he was confident coal use was in decline.

“This is a continuation and acceleration of what we saw in 2014… the fact it’s steepening so fast it’s something we did not anticipate,” he said.

“What we’re seeing now is cement, steel output falling and thermal power generation falling while hydro, wind and solar are growing fast.

“I have a high degree of confidence in those statistics because in the current economic situation no government has an incentive to publish falling numbers for industrial growth.”

If correct, the drop in coal use would be the largest year-on-year fall recorded in any country ever, he added.

New laws

Slack economic growth may be one reason for falling coal use, but so too are new regulations designed to address air pollution and make industry more competitive.

A report in the Wall Street Journal reveals the use of coal power plants fell to its lowest level for 38 years and is likely to plummet further due to electricity market reforms from central government.

Aimed at opening up power generation to more competition, these will see coal “thrown to the market lions” it says as wind, hydro and gas suppliers seek more grid access.

In March Jiang Kejun, a senior scientist at the government-funded Energy Research Institute in Beijing told RTCC the growth in energy intensive industries was likely at an end.

“The trend [in falling coal use] will continue, the growth or energy demand will be continually slow as most energy intensive products reach their manufacture peak,” he said.

Myllyvirta, who recently returned from China, said the “war” on smog and a shift to a services-driven economy could also explain the figures.

World Coal magazine reports 80% of Chinese mining forms are reporting losses due to market oversupply and a resulting slump in prices.

The lack of demand is also likely to impact Australia, Indonesia, South Africa and the US, major seaborne coal producers who will need to cut supply or find other markets.

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