Energy security concerns lead to more coal production
In 2022, the supply chain disruptions caused by Ukraine’s invasion increased coal production around the world by 8.2%. Over 70% of the coal mining happened in Asia, with China and India leading the production.
Coal is a natural resource for energy production and is primarily used in electricity generation. Especially after the market disruptions caused by Covid pandemic and the war in Ukraine, energy security has become a top priority on the political agenda. As a result, the majority of the countries have turned to coal while compromising on its environmental impacts.
Top 10 coal-producing countries
Coal is commercially produced in over 50 countries. In 2023, approximately 82% of coal-fired electricity generation took place in Asia, marking an increase from a 75% observed in 2019. As other regions continue to decrease their coal consumption, Asia's proportion of coal usage and imports is expected to rise further.
China is currently the world's leading coal producer, with India, Indonesia, and the U.S. following (Figure 1). The leading two countries have faced challenges in electricity supply due to coal prices, even before recent global disruptions. Consequently, since October 2021, both governments have ramped up efforts to boost coal production.
Between 2019 and 2021, the global coal production decreased slightly by 0.69% (Figure 2). China still maintained its position as the largest coal producer, with production reaching 3,925 million tonnes in 2021. India, the second-largest coal-producing nation recorded a production of 793 million tonnes in the same year.
Then came the invasion of Ukraine. In 2022, China produced over 4,560 million tonnes of coal, accounting for more than half of the global output.
China is the primary player in coal production
By the end of 2020, China had installed 1080 GW of coal-based electrical capacity. That made up over half of the world's total. However, coal only generated 57% of the country's electricity.
So, in the first half of 2021, the government approved 5.2 GW of new coal power projects to cover the demand. Between 2016 and 2023, the country’s coal production increased by more than 36% (Figure 3).
In 2023, NDRC of China has set a target of producing 300 million tonnes of dispatchable coal annually by 2030.
However, the country has an ambitious plan to reduce the production gradually after peaking in the 2030s. For this, there are significant ongoing investments in nuclear power and renewable energy.
Meanwhile, lignite production in Europe is expected to decline to match regional demand by 2026, although it remains significant. Poland, which has pledged to close its coal mines by 2049, will see a gradual but inevitable reduction in hard coal production. In the U.S., production has decreased, but the drop has been less pronounced due to higher exports and stockpiling.
Related: G20 Summit 2023: what are the new climate promises?
Thermal Coal Imports 2023
The rising global demand for energy means countries are easily turning towards coal. And this has made the Paris Agreement objective challenging to achieve. In 2023, global electricity generation from coal reached an all-time high, with thermal coal exports exceeding 1 billion tonnes for the first time. This surge occurred despite extensive efforts to reduce reliance on fossil fuels in every COP.
Related: COP28: fossil fuels challenge wins while loss and damage encounter setback
Figure 4 shows the share of thermal coal imports in 2023. China imported about 32% whereas India and Japan followed with 17% and 11%, respectively. South Korea and Taiwan also stood out as significant importers, with 8% and 5%, respectively.
Indonesia emerged as the leading thermal coal exporter in 2023, setting a record by shipping out more than 505 million tonnes, up by about 12% from 2022 levels. Australia as the second-largest exporter sent out more than 198 million tonnes, an increase of 7% from the previous year.
Growing emissions from coal production
In May 2021, the International Energy Agency (IEA) published a roadmap with a conclusion that no new coal mines or oil and gas fields should be inaugurated if the world aims to limit global warming to 1.5°C. The existing projects, including those actively producing fossil fuels, already contain sufficient oil, gas, and coal to meet the energy demand in line with the 1.5°C warming limit.
A year later, Oil Change International and a team of researchers published a peer-reviewed study expanding on the IEA's analysis. The team revealed that existing projects not only contain enough fossil fuels to meet demand aligned with 1.5°C goals but exceed this requirement significantly.
In 2023, a group of scientists revised the updated IPCC estimates of the remaining carbon budget based on more recent scientific findings. They concluded that developed fossil fuel reserves would produce 915 Gt CO2 pollution from 2023 onwards if fully extracted (Figure 5).
The carbon budget for a 50% chance of limiting warming to 1.5°C is just 380 Gt CO2. And, about 15% of developed reserves must remain unextracted to acquire an 83% chance of staying below 2°C of warming.
The recent research suggests that even in a hypothetical scenario where coal mining halts immediately, the exploitation of developed oil and gas reserves alone could push global temperatures beyond 1.5°C.
Clearly, coal holds the reputation of being an economical energy source, serving as the primary commodity in electricity generation. However, this affordability comes at an environmental expense, as it is the leading contributor to energy-related CO2 emissions.
Related: Germany reaches a record high in the installation of renewable energy
In addition to halting new oil, gas, and coal development, governments must also ensure that existing extraction sites are prematurely closed and decommissioned, and investments in negative emissions technologies are carried out.
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