Coal Demand Set for Biggest Annual Drop Since World War II
Coal Demand Set for Biggest Annual Drop Since World War II
(Bloomberg) --
Global coal demand is heading for its biggest annual drop since World War II as economic activity plunges due to coronavirus lockdowns.
Burning coal to make electricity in several European countries has become unprofitable and socially untenable -- crowded out by cheap natural gas and the proliferation of renewable energy as well as powerful environmental movements. The pandemic has only hastened its demise.
Global coal demand will fall by 8%, the International Energy Agency said in a report gauging the impact of the virus across the energy business. The amount of the fuel burned for power will fall 10%.
The world’s biggest coal consumer, China, will see demand fall by 5% despite a gradual revival of its industries since lockdowns were eased.
In Europe, where policies to quit coal altogether are taking effect, demand is set to slump by 20%, while the U.S. will see a 25% fall, the IEA said.
In the past two weeks, Austria and Sweden announced that they have shut their last coal-fired power plants. They’ve now joined Albania, Belgium, Estonia, Latvia, Lithuania and Norway as countries without coal in their electricity mix.
The U.K. hasn’t used coal for 20 days, a modern record, as it looks to leave the fuel behind by 2025. Germany aims to quit coal by 2038, although market forces unleashed by the coronavirus could speed up that process.
“This is a historic shock to the entire energy world,” Fatih Birol, the IEA’s executive director, said. “Amid today’s unparalleled health and economic crises, the plunge in demand for nearly all major fuels is staggering, especially for coal, oil and gas.”
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