India, South- East Asian markets likely to maintain demand

THE world has already reached “peak coal’’ but its death will be slow, according to global commodity analysts Wood Mackenzie.

Peak coal was achieved in 2013 and declines had been steady since until this year when increased demand for coal in South- East Asia has seen a global one- year increase in coal use.

In its report WoodMac said India remains committed to coal- fired power and its demand for electricity is growing which will underpin a plateauing of coal demand rather than a sudden decline.

It said the use of coal in energy production would grow slightly from 2020 driven by Asian electrification and industrialisation in India and South- East Asia and that growth will exceed the slow- down in Europe and Asia. But while there will be an increase in coal for energy, growth in non- coal energy will check its emissions.

That news is likely to encourage Adani and its plans to build the first stage of a $ 21 billion coal project in central Queensland which will export to India.

Media reports also quoted Chinese analysts saying the demand for high- quality coal from Australia was surging to deal with emissions and improve energy efficiency.

But WoodMac said Europe and the US were steadily weaning themselves off coal.

“We estimate the global population will grow by 1.2 billion by the 2030s, most of them in energy under- served, often coal- dependent regions,’’ WoodMac’s report said. It said China would reduce its consumption, but India would use more and the growth in coal consumption would come from South- East Asia, particularly Vietnam.

Whatever happens will have an impact on Queensland’s economy. The state’s coal exports are dominated by coking coal, which is used in the production of steel, for which there is no suitable replacement, but 60 million tonnes of thermal coal was mined in 2016- 17 in the state.