Coal 2019 w Analysis and forecast to 2024 Coal 2019 Analysis and forecast to 2024 INTERNATIONAL ENERGY AGENCY The IEA examines IEA member IEA association the full spectrum countries: countries: of energy issues including oil, gas Australia Brazil and coal supply and Austria China demand, renewable Belgium India energy technologies, Canada Indonesia electricity markets, Czech Republic Morocco energy efficiency, Denmark Singapore access to energy, Estonia South Africa demand side Finland Thailand management and France much more. Through Germany its work, the IEA Greece advocates policies Hungary that will enhance Ireland the reliability, Italy affordability and Japan sustainability of Korea energy in its 30 Luxembourg member countries, Mexico 8 association Netherlands countries and New Zealand beyond. Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United States The European Commission also participates in the work of the IEA Please note that this publication is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/t&c/ Source: IEA. All rights reserved. International Energy Agency Website: www.iea.org Coal 2019 Foreword Foreword Despite the growth in low-carbon fuels in recent decades, the reality is that coal remains a major fuel in global energy markets while accounting for over 40% of global energy-related CO2 emissions. While more and more industrialised countries have announced plans to phase out the use of coal in the years to come, the world consumes 65% more coal today than in the year 2000. That is the hard reality we must address when balancing the urgency of reducing greenhouse gas emissions with rising energy needs in many parts of the world, mainly in emerging markets. Coal provides one-quarter of global primary energy demand. Today, it is the world’s largest source of electricity generation and a crucial part of steel making and cement production. As the global energy authority that covers all fuels and technologies, the International Energy Agency (IEA) is committed to regular and rigorous analysis of coal markets, to forecasting their future trends and to highlighting technologies that can help tackle coal’s emissions footprint. This report is intended as a reference point for those with a stake in coal’s future, as well as for those interested in the relationship between energy and climate change. The continued use and growth of coal worldwide is largely supported by a group of fast-growing Asian economies that account for half of the world’s population: the People’s Republic of China, India, Indonesia, Pakistan, Bangladesh, the Philippines and Viet Nam. Coal power plants in Asia are young – 12 years old on average – making it possible that they can operate for many decades to come. How we address this issue in Asia is critical for the long-term success of any global efforts to reduce emissions. A range of low-carbon technologies are needed to put the world on a sustainable energy path, including carbon capture, utilisation and storage (CCUS). The adoption of CCUS in many of Asia’s young power plants would be necessary to bring the world into line with a pathway for achieving international goals on climate, air quality and energy access. Furthermore, the decarbonisation of major heavy industries such as steel and cement would be extremely difficult without CCUS. Over the past several years, the IEA has opened its doors to major emerging economies and increased its global engagement, working closely with many countries to help them accelerate their clean energy transitions. Building on this successful momentum, our recent Ministerial Meeting has given the IEA a strong mandate to step up its role leading global clean energy transformations. We will continue helping governments around the world to provide the most appropriate solutions to their energy challenges, while ensuring that the changes happen in a fair, just and affordable way for all citizens. Dr. Fatih Birol Executive Director International Energy Agency PAGE | 3 Coal 2019 Acknowledgements Acknowledgements The Coal 2019 report was prepared by the Gas, Coal and Power Markets Division (GCP), headed by Peter Fraser. The report was led, managed and co-ordinated by Carlos Fernández Alvarez. Samir Jeddi, Max Schönfisch and Carlos Fernández Alvarez are the authors. Keisuke Sadamori, Director of Energy Markets and Security (EMS), provided expert guidance and advice. Stefan Lorenczik, supported by Carlos Fernández Alvarez, developed the new model of electricity dispatch. Special thanks go to Raimund Malischek, who authored Box 3.2 on carbon capture and storage, and to Sunah Kim, who supported the analyses on Korea throughout the process. Many IEA colleagues provided us with advice and input during the process: Yasmina Abdelilah, Neil Atkinson, Heymi Bahar, Alessandro Blasi, Toril Bosoni, Davide D’Ambrosio, Jean-Baptiste Dubreuil, Keith Everhart, Antonio Erias, Tim Gould, Olivier Lejeune, Laura Marí Martínez, Samantha McCulloch, Gergely Molnar, Cristina Morillas, Sean O’Brien, Pawel Olejarnik, László Varró and Brent Wanner. The IEA Communications and Digital Office (CDO) also provided editorial and production guidance. Thanks to Jad Mouawad, Head of CDO, and to Tanya Dyhin, Astrid Dumond, Katie Lazaro, and Therese Walsh, who made this publication possible. Kristine Douaud edited the report. Our gratitude goes to the non-profit research Institute for Energy Economics (EWI) in Cologne for sharing its breadth of coal expertise. CRU provided with invaluable data and information for this report. Special thanks go to the Coal Industry Advisory Board (CIAB) for their support. Many experts from outside the IEA provided inputs and/or reviewed the report: Mick Buffier Glencore Graham Chapman SUEK Rodrigo Echeverri Noble Resources International Nikki Fisher Anglo American Justin Flood Delta Electricity G. Renjith The Energy and Resources Institute (New Delhi) Howard Gatiss CMC Ayaka Jones US Department of Energy Roland Lübke German Coal Association Patricia Lumban Gaol PT Adaro Indonesia Liu Yunhui Tsinghua University Peter Morris Minerals Council of Australia Jane Nakano CSIS Brian Ricketts Euracoal PAGE | 4 Coal 2019 Acknowledgements Shintarou Sawa J-POWER Hans-Wilhelm Schiffer RWE J. Gordon Stephens Komatsu Akira Yabumoto J-POWER Fernando Luis Zancan Brazilian Coal Association The individuals and organisations that contributed to this study are not responsible for any opinions or judgements it contains. Any error or omission is the responsibility of the IEA. This document and any map included herein are without prejudice to the status of or sovereignity over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Comments and questions are welcome and should be addressed to: Carlos Fernández Alvarez ([email protected]) PAGE | 5 Coal 2019 Table of contents Table of contents Highlights ................................................................................................................................... 9 Executive summary..................................................................................................................... 10 1. Recent demand and supply trends ............................................................................................ 13 Demand ............................................................................................................................................. 13 Supply ............................................................................................................................................... 30 References ........................................................................................................................................ 44 2. Recent international coal trade trends ...................................................................................... 45 Market volumes ................................................................................................................................. 45 Regional analysis ............................................................................................................................... 50 Prices ................................................................................................................................................. 61 Coal supply costs .............................................................................................................................. 69 References ......................................................................................................................................... 77 3. Medium-term demand and supply forecast ............................................................................... 78 Methodology ..................................................................................................................................... 79 Assumptions ..................................................................................................................................... 80 Global coal demand forecast, 2019-24 ............................................................................................... 81 Global coal supply forecast, 2019-24 ................................................................................................ 108 References ......................................................................................................................................