The International Energy Agency (IEA) has declared that coal has made a ‘comeback’ in its latest World Energy Outlook (WEO) update.
Released today, the WEO 2018 shows continued strong growth in Asian demand for coal through to 2040.
Under the IEA’s New Policies Scenario, which includes countries’ nationally determined contributions under the Paris Agreement, the WEO estimates the growth in demand for coal in the Asia Pacific will increase by 492 mtce (million tonnes of coal equivalent) by 2040.
This includes substantial growth in India and southeast Asia, which counteracts projected falls in China and Japan.
Minister for Resources and Northern Australia Matt Canavan welcomed the IEA report and its positive outlook for the nation’s coal sector.
“Our proximity to these markets means our coal industry is well placed to meet this growing demand,” Minister Canavan said.
“These figures show a bright future for Australia’s coal industry. They’re also a short, sharp shock for those who have set out to destroy confidence in our world-class coal industry. Coal is here and it’s here to stay.”
Minister Canavan said the IEA had forecast Australia’s net exports of coal would grow by around 20 per cent, to around 430 mtce, by 2040. Approximately half of those exports will be metallurgical coal.
“Australia is the only exporting coal producer projected to significantly ramp up coal production over the period to 2040, supported by its strong resource base and proximity to Asian markets,” he said.
Other positive results from this year’s WEO include a growing international metallurgical coal market (used in steelmaking), especially in Asia, with Australia well positioned to meet demand.
Australia’s production is also forecast to exceed that of the USA by the late 2020’s, with more than 40 per cent of coal produced in Australia expected to be sourced from new mines in 2040.
The new report also flags the increased demand for coal will see the development of new coal basins in Australia like the Galilee Basin. As the report states, its forecasts are ‘consistent with some mining development in the Galilee Basin, albeit subject to all the caveats regarding import demand discussed above’.
“All of this will require new mines, ports and other transport infrastructure to be developed, including in the Galilee Basin.
This is great news for the Australian economy, and for the tens of thousands of Australian coal workers and their families,” Minister Canavan said.