Global Coal Consumption at Record High - Coal Prices High - China Leads the Way - The International Energy Agency is a United Nations Treaty under Belgian Law
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1. Global Coal Consumption at Record High
2. Coal Prices High
3. China Leads the Way
4. The International Energy Agency is a United Nations Treaty
GLOBAL COAL CONSUMPTION AT RECORD HIGH
The IEA (International Energy Agency) released its latest report on Coal last week. It is imaginatively titled Coal – 2024. The report is 127 pages long. BOOM has read it for you and presents the most pertinent facts.
The key observation is this. Despite much propaganda to the contrary, COAL IS NOT IN DECLINE and is essential to the global energy mix. In 2024, global consumption was at record highs. Prices are also at high levels historically.
And what happened to Global Warming? Who knows?
Recent data from the National Oceanic and Atmospheric Administration (NOAA) has revealed that the Arctic sea ice extent is 26% larger than it was in 2012, contradicting dire climate predictions from previous years, according to climate sceptic Tony Hellyer. In 2007, a BBC News article (worth reading) titled “Arctic summers ice-free ‘by 2013,’” claimed that northern polar waters could become ice-free within six years based on computer modelling studies. Mmmmm ….
BBC Quote 2007: “Using supercomputers to crunch through possible future outcomes has become a standard part of climate science in recent years.”
Gee whiz, super computers.
Professor Peter Wadhams, best known for his work on sea ice, was quoted in the 2007 article as saying — “In the end, it will just melt away quite suddenly”. He is emeritus professor of Ocean Physics, and Head of the Polar Ocean Physics Group in the Department of Applied Mathematics and Theoretical Physics, University of Cambridge. BOOM says …. MMMmmmm ….
However, the latest NOAA Technical Report dated December 2024 states “Sea ice extent in September 2024 was the 6th lowest in the satellite record (1979 to present); the last 18 September extents (2007-24) are the 18 lowest in the record.”
And “Snow accumulation during the 2023/24 winter was above the 1991-2020 average across both the Eurasian and North American Arctic. Early snow onset and delayed spring melt resulted in a longer than average snow season over much of the Eurasian Arctic.”
THE COAL REPORT 2024
The IEA Coal report analyses the latest trends in coal production and demand and updates medium-term forecasts. It shows that global coal use has rebounded strongly after plummeting at the height of the Covid Panic-Demic. Total coal consumption is expected to reach 8.77 Billion Tonnes in 2024. This is a record high. Global consumption of coal has doubled in the past three decades which would be a surprise to most ill-informed Western politicians and the mainstream media who are all convinced to the opposite view.
The electricity sector in China is particularly important to global coal markets. According to data from the Global Carbon Project, an international research consortium tracking carbon emissions, China is the world’s largest coal and carbon consumer. According to the data in 2021, China accounts for approximately 53.8% of global coal consumption. Also, it is essential to note that these figures equate to China burning more coal than the rest of the world combined.
China consumes more coal than the rest of the world put together.
Demand for coal is increasing in emerging economies where electricity demand is rising sharply along with economic and population growth, such as in India, Indonesia and Viet Nam. In emerging economies, growth is mainly driven by coal demand from the power sector, although industrial use is also going up.
In absolute terms, the most significant increases in demand in 2024 have been in India (up 6%) and China (up 1.1%), together with others like Indonesia and Viet Nam.
Conversely, the largest declines have taken place in the European Union (down 12%) and the United States (down 5%).
GLOBAL COAL CONSUMPTION RISING SINCE 2002
HIGH COAL PRICES
Coal prices today are 50% higher than the average seen between 2017 and 2019.
Australia’s Global Coal Prices — over 20 years
Coal production reached an all-time high in 2024. Asia remains the centre of the international coal trade, with all of the largest importing countries in the region, including China, India, Japan, Korea and Viet Nam, while the largest exporters include Indonesia and Australia.
Amid the energy crisis of 2022, thermal coal prices surged to unprecedented levels, driven by tight supply-demand fundamentals, soaring natural gas prices and geopolitical risks. High-CV thermal coal benchmarks exceeded the US$ 400/t mark multiple times, far surpassing previous records. Notably, for over six months thermal coal prices outstripped those of coking coal, an unusual development. However, as coal markets began to stabilise in 2023, following trends in other energy commodities, coking coal prices once again surpassed thermal coal, with the average annual premium returning to historical norms.
The appreciation of the US dollar has had an impact on coal trade. International coal trade is mainly priced in US dollars, making exchange rates a crucial factor in the competitiveness of coal traded.
When a currency depreciates against the US dollar, it generally increases the cost of coal for buyers, making purchases more expensive. This fuels Global CPI inflation in energy importing nations. In effect, America exports inflation through US Dollar dominance and strength.
US DOLLAR RISING AND RISING – US Dollar Index over 5 years
Can you see the US Dollar Collapse so often referred to by countless financial “gurus” and economic ”experts” on the Net? No — neither can BOOM. US Dollar strength is the problem.
CHINA LEADS THE WAY – MADE IN CHINA FROM COAL
Coal demand in China remains strong. China, the world’s largest coal consumer, used 4,883 Mt of coal in 2023, marking a 6% y-o-y increase and accounting for 56% of global coal consumption. The majority (85%) of this consumption was thermal coal, amounting to 4,146 Mt, primarily used for power generation. The remaining 737 Mt was metallurgical coal.
Think about it – China produces solar panels, windmill components and electric cars for markets in Western Europe, the UK, the USA and other “advanced” economies. All of those products are principally made using coal as the energy source. In China, more than half of the primary energy comes from coal.
Perhaps we should use the term “Made in China from Coal” to describe the “Renewables” energy sector and electric car sales in the advanced economies?
In regard to the entire global car market, China made over 30 Million cars in 2023, which is 32.2 % of the total global production. Germany made 4 Million.
In China, 74 % of thermal coal demand is used in power plants to create electricity. The Chinese electricity sector is the main driver of China’s coal demand and consequently global coal demand.
CHINA’S NEW COAL FIRED POWER PLANTS — 220 OF THEM
During 2022-2023 China approved around 220 GW of new coal-fired power/electricity capacity. Acting on this, it began construction of 70 GW in 2023 and an additional 41 GW in the first half of 2024.
Worldwide there are about 2,500 coal-fired power stations, on average capable of generating a Gigawatt each. They generate about a third of the world's electricity.
So — as the Americans say “do the Math” — China is planning to build an extra 220 Coal-Fired Power stations while the West is shutting theirs down in the pursuit of Climate Virtue and economic destruction.
China also converts coal into other commodities, typically through coal gasification and liquefaction.
In this way, coal imported by China produces Fertiliser to boost food production, Synthetic Natural Gas, Polyester, Olefins, Diesel Fuel and Gasoline.
COAL CONVERSION IN CHINA
COAL CONSUMPTION IN THE USA FALLING
In the United States overall coal consumption is expected to have decreased from 386 Mt in 2023 to 368 Mt in 2024, a decline of 5%, slower than the 17% fall seen in 2023.
COAL CONSUMPTION IN EUROPE AND UK FALLING
Coal consumption is falling in Europe. In 2023, the Republic of Turkey/Türkiye surpassed Germany and Poland to become the largest consumer of coal in Europe. Its total coal consumption in 2024 is expected to rise by 2.8% from the 2023 level to 129 Mt. Turkey will soon commission its first Nuclear Power Plant, Akkuyu. It is expected to generate around 10% of the country's electricity when completed. The plant is being built by Rosatom, a Russian company.
In May 2010, Russia and Turkey signed an agreement that a subsidiary of Rosatom would build, own, and operate the Akkuyu power plant comprising four 1,200 MWe VVER1200 units. It is expected to be the first build–own–operate nuclear power plant in the world.
UK CLOSES ITS LAST COAL FIRED POWER PLANT
Meanwhile, in September 2024, the United Kingdom’s last coal-fired power plant, Ratcliffe-on-Soar, ceased operations, marking the end of 142 years of coal fired power production in the country. The world’s first coal-fired utility power plant began generating electricity in the UK in 1882.
COAL CONSUMPTION IN SOUTH EAST ASIA - UP 8%
Strong demand for coal in Southeast Asia is being driven by Indonesia and Viet Nam. Coal consumption in ASEAN countries reached 457 Mt in 2023, marking a 10% increase from the previous year. Of this consumption, 76% was attributable to electricity generation. Indonesia accounted for nearly half (48%) of ASEAN countries’ coal use, followed by Viet Nam (21%), the Philippines (9%) and Malaysia (8%).
For 2024, ASEAN coal consumption is expected to rise to 491 Mt (up 8%). As in previous years, increased demand in Indonesia is the main reason for this uplift. The region continues to have robust economic growth prospects, accompanied by numerous coal-fired power plants currently under construction. Demand for coal in ASEAN countries is expected to grow by 5% annually and reach 567 Mt by 2027. Indonesia accounts for two-thirds of this growth.
Coal Consumption Fuelled by electric cars and batteries
Growing coal consumption in Indonesia is mainly fuelled by power generation, but also by nickel production. In 2023 Indonesia produced 1.9 Mt of nickel, over half of global output. With rising demand for electric vehicles and batteries for other uses, investment in Indonesia’s nickel production capacity is increasing.
Indonesia is also expanding aluminium production in order to export aluminium rather than bauxite. A new industrial park in North Kalimantan is due to result in the country’s aluminium production growing to 2.5 Mtpa, increasing electricity demand by around 30 TWh. The country, with the world’s fourth-largest population, is set to become the fourth-largest coal consumer as well.
COAL CONSUMPTION IN AFRICA RISING
South Africa’s coal sector is at a crossroads. In 2024, coal consumption in Africa is expected to increase by 6 Mt to a total of 191 Mt, driven mainly by the improved performance of coal-fired assets operated by Eskom, the state-owned power utility of South Africa. The country accounted for 86% of Africa’s coal consumption in 2023 and is expected to have increased its coal consumption to 165 Mt in 2024. Economic activity in South Africa has seen a slight improvement, and a reduction in load shedding is expected to increase coal demand.
Despite a projected increase of over 50% in nuclear generation and a doubling of renewable generation, strong electricity demand growth is expected to create room for an additional 14 TWh of coal-fired generation in South Africa in the next three years. The country continues to run three coal-fired power plants of 4.5 GW capacity that were previously set for closure. The lifetime of the three plants will be extended until 2030. Consequently, South Africa’s coal consumption for power generation is expected to rise to 124 Mt by 2027.
In March 2024, a steel plant operated by China’s Tsingshan Group began commercial operations in Zimbabwe. The initial output is 0.6 Mt of steel per year. The long-term goal is to reach a production capacity of 5 Mt, positioning Zimbabwe as the continent’s leading steel producer. This will increase annual coking coal demand by 0.4 Mt with a further potential of up to 4 Mt.
In Zambia two new coal-fired units have received approval after the power cuts following the droughts suffered in the country during 2024.
COAL CONSUMPTION IN INDIA - 10% GROWTH P.A.
After surpassing the 1 Billion tonne mark in 2023, India’s coal production growth is set to continue. In 2023, Indian coal production increased by 10%.
COAL PRODUCTION IN AUSTRALIA EXPANDING
Australian coal production is largely export oriented, as only a fifth of its coal output is consumed domestically. The domestic market has been declining for over a decade so export expectations have driven investment. In 2023, Australian coal production increased by 6% to 459 Mt. New mines came into operation during 2024, including the Dartbrook mine, the Olive Downs Complex and the open pit Vickery mine.
Metallurgical coal exports, of which Australia is the largest exporter by far, are expected to shrink. In addition, Mongolia stepped up to become the second-largest exporter of met coal in 2024, reducing China’s appetite for Australian exports.
Australia continues to dominate the project list for new or expanding coal mining projects aimed at exports. Australia has a total of 47 projects at both the less advanced and more-advanced stages, with most targeting the production of met coal or a mix of met and thermal coal. Australia's share of new or expanding projects in the global pipeline stands at 62%.
COAL PRODUCTION IN THE UNITED STATES - FALLING
Coal production in the US fell by 2.8% in 2023, although the decline in domestic demand was much stronger. In 2024, coal production is expected to fall by 12%.
COAL PRODUCTION USA — FALLING, FALLING
COAL PRODUCTION IN EUROPE — PLUMMETING
EU coal production plummeted in 2023 and the decline is expected to continue through to 2027.
In the European Union more than 80% of overall coal production is lignite. Lignite is mostly consumed in power plants close to the mines. Therefore, in 2023 lignite production has declined in line with lignite-fired power generation. Germany, the country with the largest power sector and highest potential for fuel switching, saw the strongest decline across EU countries (down 29 Mt). In relative terms, coal production decreased the most in Bulgaria, by 41% or 15 Mt. In Poland both lignite and steam coal declined (down 16 Mt combined), due to lower demand and the high cost of steam coal compared with the price of imported coal. Czechia was observed to decline as well (down 5 Mt). The result was total coal output of 278 Mt in the European Union in 2023.
INTERNATIONAL COAL TRADE -- DOMINATED BY ASIA
International coal trade is set for another all-time high in 2024. International trade in coal rose by 10% in 2023, reaching a total of 1,510 Mt. Growth was recorded in the trade of both thermal coal (up 100 Mt) and met coal (up 42 Mt). Trade accounted for about 17% of global coal demand and more than three-quarters of traded coal was thermal coal. Seaborne trade accounted for more than 90% of all traded coal in 2023, although land-based trade saw an increase during the year. The Asia Pacific region once again increased its share of global coal imports, accounting for 84% of the total coal trade during 2023.
China saw the highest imports of coal in 2023 at around 481 Mt, followed by India (248 Mt) and Japan (167 Mt). Combined, these three countries received almost 60% of global coal imports in 2023. The largest exporters were Indonesia (521 Mt), serving mostly thermal coal, Australia (353 Mt) and Russia (211 Mt), with a combined share of almost three-quarters of global coal exports in 2023. Both Chinese imports and Indonesian exports reached levels never achieved by any country before. Notably, Russian exports saw a significant shift to the east during 2023, following the EU ban on Russian coal imports in 2022. While two-thirds of Russian exports were directed to Asian markets in 2022, this share surged to about 84% during 2023.
In 2024, the global trade in coal is expected to reach a new all-time high of 1,545 Mt.
COAL TRADE FLOWS – THERMAL COAL
COAL TRADE FLOWS – METALLURGICAL COAL
TOTAL COAL IMPORTS
This chart summarises the situation globally. In the last year, the Asia-Pacific Region has increased its coal imports by 5.6 %. China has increased its imports by 9.6 %.
Europe’s coal imports have dropped by 18.3 % -- a staggering collapse. This is indicative of a European economy in recession.
International Energy Agency (IEA) Disclaimer -- This work reflects the views of the IEA Secretariat but does not necessarily reflect those of the IEA’s individual member countries or of any particular funder or collaborator. The work does not constitute professional advice on any specific issue or situation. The IEA makes no representation or warranty, express or implied, in respect of the work’s contents (including its completeness or accuracy) and shall not be responsible for any use of, or reliance on, the work.
Source: https://www.iea.org/reports/coal-2024
THE IEA IS A UNITED NATIONS TREATY UNDER BELGIAN LAW
In late 1974, a United Nations Treaty called the Agreement on an International Energy Program (IEP) was signed by a number of Nation States. The Treaty established the International Energy Agency (IEA) and was clearly global in its stated goals. Its Executive Director is Fatih Birol, born in Ankara, Turkey in 1958. Readers should note that he is also chairman of the World Economic Forum’s (Davos) Energy Advisory Board. The World Economic Forum is a private, unelected, Non-governmental organisation established by Klaus Schwab which meets at Davos Switzerland annually by private invitation only.
BOOM wonders why the IEA allows its Executive Director to be an adviser to a private Think Tank?
Before joining the IEA, Dr Birol worked at the Organization of the Petroleum Exporting Countries (OPEC) in Vienna. He completed a BSc degree in power engineering from the Technical University of Istanbul and also an MSc and PhD in energy economics from the Technical University of Vienna.
The Agreement on an International Energy Program was “registered by Belgium on 12th May 1977”. Presumably, it is therefore a contractual agreement under Belgian Law.
“Each Signatory State shall, not later than 1st May, 1975, notify the Government of the Kingdom of Belgium that, having complied with its constitutional procedures, it consents to be bound by this Agreement.”
The original document contains the following introduction:-
The Governments of the Republic of Austria, the Kingdom of Belgium, Canada, the Kingdom of Denmark, the Federal Republic of Germany, Ireland, the Italian Republic, Japan, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, Spain, the Kingdom of Sweden, the Swiss Confederation, the Republic of Turkey, the United Kingdom of Great Britain and Northern Ireland, and the United States of America,
Desiring to promote secure oil supplies on reasonable and equitable terms. Determined to take common effective measures to meet oil supply emergencies by developing an emergency self-sufficiency in oil supplies, restraining demand and allocating available oil among their countries on an equitable basis, Desiring to promote co-operative relations with oil producing countries and with other oil consuming countries, including those of the developing world, through a purposeful dialogue, as well as through other forms of co-operation, to further the opportunities for a better understanding between consumer and producer countries, Mindful of the interests of other oil consuming countries, including those of the developing world, Desiring to play a more active role in relation to the oil industry by establishing a comprehensive international information system and a permanent framework for consultation with oil companies, Determined to reduce their dependence on imported oil by undertaking long term co-operative efforts on conservation of energy, on accelerated development of alternative sources of energy, on research and development in the energy field and on uranium enrichment, Convinced that these objectives can only be reached through continued co operative efforts within effective organs, Expressing the intention that such organs be created within the framework of the Organisation for Economic Co-operation and Development, Recognising that other Member countries of the Organisation for Economic Co operation and Development may desire to join in their efforts, Considering the special responsibility of governments for energy supply, Conclude that it is necessary to establish an International Energy Program to be implemented through an International Energy Agency, and to that end, Have agreed as follows:
Article 1. 1. The Participating Countries shall implement the International Energy Program as provided for in this Agreement through the International Energy Agency, described in Chapter IX, hereinafter referred to as the "Agency".
2. The term "Participating Countries" means States to which this Agreement applies provisionally and States for which the Agreement has entered into and re mains in force. 3. The term "group" means the Participating Countries as a group.
Key requirements under the IEP treaty are that member countries:
1. hold oil stocks equivalent to at least 90 days of their prior year’s daily net oil imports and
2. in the event of a major oil disruption, contribute to IEA collective actions by way of a stock release, demand restraint, fuel switching, increased production or fuel sharing.
Nations can leave the IEA if they Notify the King of Belgium under Article 69.2
Any Participating Country may terminate the application of this Agreement for its part upon twelve months' written notice to the Government of the Kingdom of Belgium.
GENEROUS ANNUAL BUDGET
To achieve these goals, the IEA has a Budget of over $ 60 Million Annually. That is a very generous sum indeed.
ORIGINAL SIGNATOORIES AND MEMBERS
The original signatories on the Agreement were Austria, Belgium, Canada, Denmark, Germany, Ireland, Italy, Japan, Luxembourg, The Netherlands, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States of America. Nations that have joined later include Australia, Portugal and Greece.
The only Member nations that export energy are Canada and the United States. The vast majority of energy exporting nations do NOT belong to the IEA.
Member Countries
Australia Austria Belgium Canada Czechia Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Japan Korea Latvia Lithuania Luxembourg Mexico New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland The Netherlands Türkiye United Kingdom United States
Accession countries
Colombia Costa Rica Chile
Association countries
Argentina Brazil China Egypt India Indonesia Kenya Morocco Senegal Singapore South Africa Thailand Ukraine
Source: https://treaties.un.org/doc/Publication/UNTS/Volume%201040/volume-1040-I-15664-English.pdf
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