Executive summary

• Coal combustion is the largest source of CO2 emissions and a leading contributor to climate change.
• Climate models estimate that electricity generation from coal should be stopped around 2040.
• Despite that, new coal power plants are still being built and coal maintains a major share in the global energy mix.
• In the EU, coal should be phased out by 2030 to meet climate goals. However, some countries do not have coal phaseout plans (Poland, Chechia, Spain, Turkey and many Balkan states) or the approved plans are not compatible with Paris Agreement declarations (Germany).
• Globally, coal power plants are grouped in clusters – China & India, South-East Asia, Central Europe, USA, in line with regions with the largest coal production.
• Coal production and consumption peaked in 2014 and is predicted to decline.
• The profitability of power generation from coal is decreasing due to falling costs of solar and wind energy (and rising CO2 prices in the EU).
• Employment in coal mining is already declining, but it needs to be coupled with just transition plans.

You can download the underlying Excel sheet as well as the Powerpoint versions below. Please cite the author and the data sources (CC BY-SA 4.0. license).

Coal plays a leading role in climate change

Coal, among all fossil fuels, contributes the most to global CO2 emissions:

Coal is used in several industries, mainly in power generation (64% in 2018 – IEA WEO 2019). Electricity and heat are the sectors with largest CO2 emissions, coal is responsible for 73% of CO2 emissions from electricity and heat generation.

The Intergovernmental Panel on Climate Change suggests coal phaseout pathways to limit global warming to below-catastrophic values (1.5 °C) in their report Global Warming of 1.5 ºC. You can view the scenarios using the IAMC 1.5°C Scenario Explorer and Data hosted by IIASA.

• Electricity generation from coal should be reduced to almost zero by 2040 globally.
• The energy sector should reach net zero emissions by 2042 in all 1.5 °C compatible scenarios.
• In OECD countries, a 90% reduction in electricity generation from coal is needed by 2030.

The current coal plant development pipeline is not compatible with the decarbonization pathways…

Globally, coal should be phased out around 2040. Despite that, hundreds of new coal power plants are planned and in construction – 499 GW, just in China 206 GW.

The main coal clusters are in: China & India, South-East Asia, USA, Central Europe

The coal fleet capacity is still rising:

• The total capacity of the World’s coal power fleet has been rising since 2000 (however, in H1 2020 the global capacity declined for the first time)
• The increase is driven by Asia.
• China is adding on average 42.4 GW yearly, India 7 GW, rest of Asia 10 GW.
• In Europe and USA coal capacity is decreasing.

The share of coal in the global energy mix is high and rising:

• Electricity: 39% in 2015
• Heat: 42% in 2015

This stands in contrast to IPCC 1.5 °C compatible scenarios (e.g. IEA B2DS via Climate Analytics), in which power generation from coal is phased out in 2040 and cut by 40% between 2015 and 2025.

Coal production and consumption

China, USA and India are responsible for 82% of global coal consumption and 70% of production.

Australia, Indonesia and Colombia are among largest exporters with minimal internal consumption. Asian countries among largest net importers.

Coal production follows consumption, but the reserves keep increasing after 2008; production peaked in 2014.

Economics might accelerate the coal phaseout

• Falling renewable energy prices are putting pressure on coal profitability.
• Coal prices (ARA – Amsterdam-Rotterdam-Antwerp and Richard’s Bay – RB price indices) have been going down since 2018.
• Strong increase in CO2 prices in the EU is causing coal plants to generate losses. However, due to COVID-19, CO2 prices fell significantly in 2020.

The Carbon Tracker Initiative estimates long term operating costs for coal power plants will go up and surpass the declining PV and Wind costs in China by 2022 and in Europe even faster.

The energy transition needs to consider social aspects

Employment in coal mining is already declining:

• In the UK and Germany nearly stopped.
• Poland and USA still have a significant coal mining workforce – 60-80 thousand.
• In China employment in mining is declining from 5,3m in 2014 to 3,3m in 2018.

The EU is leading the just energy transition effort and repurposing European coal regions, this practice should be picked up in other regions.

Coverage:

• The Coal Hub

Featured image made by Freepik from flaticon.com