India shelves coal mining target on weak demand

Delhi is backtracking on a goal to produce one billion tonnes of coal by 2020, as power consumption growth falters

Indian coal miner (Pic: Biswarup Ganguly  [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons)

Indian coal miner (Pic: Biswarup Ganguly [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons)

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India is quietly ditching an aggressive coal production target due to slower than expected demand growth, a national newspaper revealed on Thursday.

In 2015, Coal India was asked to double output to a billion tonnes by 2020, to fuel a rapid expansion of power generation.

One year later, the state-controlled miner is being reined in as surplus coal piles up, the Economic Times reports, citing a sector official.

Coal India and power stations have an estimated 21 days worth of fuel sitting in reserve. Big stockpiles become a fire hazard.

Power demand is increasing only 4-5% a year, not 7-8% as expected, an analyst from KPMG told the paper.

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The apparent slowdown in coal use is significant both for emissions trends and for international coal markets.

While individual carbon footprints remain low, with a population of 1.3 billion India is the fourth largest emitter in the world, after the US, China and EU.

As China’s coal consumption starts to decline, all eyes are turning to India as the biggest driver of demand – and the associated greenhouse gas emissions.

Its stay on production may be only temporary. Only a few days earlier, energy minister Piyush Goyal was touting a US$15 billion investment opportunity in Indian mines.

Still, the blip in demand, coupled with Coal India’s readiness to boost domestic output, casts doubt on the country’s need for imports.

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It comes as the Australian senate urges government not to subsidise Adani’s controversial Carmichael coal mine, which is destined to supply the Indian market.

Greens are fighting the proposed development tooth and nail, fearing its impact on the Great Barrier Reef, local wildlife and the climate.

They are pinning their hopes on the AU$15 billion mine proving economically unviable, after the Australian Federal Court rejected a legal challenge on Monday.

By Adani’s own estimate, the mine would have a lifetime carbon footprint of 4.7 billion tonnes carbon dioxide equivalent. That is comparable to France’s annual emissions.

Justice John Griffiths accepted the argument that those emissions were India’s responsibility, however, as the country burning the product – not Australia’s.

Adani plans to start construction in 2017.

Read more on: Fossil Fuels | India