China to burn 50% of global coal by 2035 - IEA

TORONTO （miningweekly.com） - Global coal demand could rise by 60% over the next 25 years to more than 7,5-billion tons yearly if governments don't change their policies, the International Energy Agency （IEA） said in its World Energy Outlook report released on Tuesday.

In a scenario where governments follow through with planned new energy policies, which the IEA dubs the New Policies scenario, China's coal production grows by an average 1,1%/y to reach 2,8-billion tons in 2035, equal to one-half of global coal output and 35% higher than in 2008.

"We have taken governments at their word, in assuming that they will actually implement the policies and measures, albeit in a cautious manner, to ensure that the goals they have set are met," IEA director Nobuo Tanaka said.

"By any measure, the story of coal in China is remarkable," the agency said in the 738-page report.

Under the New Policies scenario, global coal demand would fall to 1,9-billion ton in 2035 - or 25% lower compared with current demand.

In what it called the ‘450' scenario, which assumed more decisive implementation of policy plans and a further strengthening of policies after 2020, world coal demand of about 3,5-billion tons/y in 2035 would be one-quarter lower than 2008 - around the same as in the 1990s and 2000s.

The World Energy Outlook report projected higher demand for all fuels by 2030, barring oil, compared with its predictions last year.

The IEA said that coal consumption in the OECD would fall under all three scenarios by 2035 as countries shut down dirty coal power plants and increased renewable in their power mix.

OECD coal demand is estimated to have contracted by 20% in 2009, with more than 50% of this decline occurring in the US, as the recession left the country reeling with unemployment at about 10%.

All demand growth would come out of the developing world, which would raise its share in the global market to 82% by 2035, compared with the 66% today.

China alone accounted for 43% of global coal demand today, and would reach 50% by 2035 under the New Policies scenario.

"Among the regions where coal demand increases over the projection period in the New Policies scenario, China, India and Indonesia together are responsible for nearly 90% of the total growth," the IEA said.

It forecast India would become the number-two coal burner globally by 2030, with demand doubling from around 370 Mt today to 780 Mt by 2035 in the New Policies scenario.

Interestingly, the report predicted Indonesia would rise to become the fourth-biggest coal user by 2035. The country has the world's fourth biggest population, of which only 65% have access to electricity.

Indonesia currently comes in at number 13 when it comes to burning coal.

Coal makes up for an estimated 82% of the world's non-renewable energy resources and reserves are enough to meet demand for almost 150 years at current production levels, the IEA said, citing the German Federal Institute for Geosciences and Natural Resources

Countries with the biggest reserves include the US, China, India, Russia and Australia.

"The limit to continued growth in the use of coal does not lie in scarcity of resources, but depends rather on how coal's carbon intensity can be reconciled with the growing global momentum to stabilise greenhouse gas emissions at a sustainable level," the IEA said.

In the New Policies scenario, the agency projected global coal production to increase by about 740-million tons reaching 5,6-billion tons by 2035.