​Everyone is falling out of love with coal except China

Coal has few friends around the world, but China isn’t giving up on the world’s most polluting power-plant fuel just yet.

European nations from the U.K. to the Netherlands and Germany are leading the effort to eradicate the fuel from their power mix. Global efforts to drive the most polluting fossil fuel out of the electricity mix last year saw the biggest drop in coal generation and carbon dioxide emissions since at least 1990, according to Ember, the London-based think tank formerly known as Sandbag.

Coal generation worldwide slumped by three per cent in 2019 on falling power demand, a surge in wind and solar generation and coal-to-gas switching. That resulted in a two per cent drop in carbon emissions from the power industry. But China’s thirst for burning the combustible sedimentary rock is preventing the world from hitting its climate targets, Ember said in a report.

The scale of efforts needed to phase out fossils fuels, install enough renewable energy, and electrify the world’s systems to slow global warming will need a concerted mix of ambitious climate policies and investment of hundreds of billions of dollars per year.

China saw an increase of two per cent, resulting in a share of more than half the world’s coal-fired generation for the first time. India was second largest with 11 per cent, although its output fell 3% last year. While much of the world is moving toward more renewables, with wind and solar generation increasing by 15 per cent, a compound annual growth rate at that level will be needed to meet targets set out in the Paris Agreement.

Without concerted policy maker efforts to boost wind and solar, we will fail to meet climate targets. China’s growth in coal, and to some extent gas, is alarming but the answers are all there,” said Dave Jones, an analyst at Ember.

U.K. coal plants are closing faster than policy makers expected as natural gas, a competing fuel, is trading near its lowest in a decade. Germany is also curbing use even though the deadline for its coal phase-out plan is in 2038. European Union power sector emissions have fallen by more than 40 per cent since 2007, Ember said.

U.S. coal generation halved over the same period. Last year’s 16 per cent drop was mainly caused by the slump in gas prices, although renewables output also increased.

Other key findings:

  • South Korea and Japan cut coal generation by five per cent and four percent, respectively, on stronger nuclear output
  • Increased electricity demand in Indonesia, Malaysia and the Philippines was almost all met by coal
  • Coal generation needs to fall by 11 per cent per year to keep global warming to 1.5 degrees Celsius
  • Vietnam’s coal generation grew 34 per cent, following a record drought.

© 2020 Bloomberg L.P.

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