FRANKFURT- Seaborne coal trade around the world grew 0.7 percent last year, helped by higher output in China and Indonesia and more export activity by Indonesia, Australia, Russia and Canada, Germany’s VDKI coal importers lobby said on Friday.
Imports and exports, counted together, rose to 1.218 billion tons from 1.210 billion tons in 2018, VDKI Managing Director Franz-Josef Wodopia said in an speech made available to Reuters, citing VDKI estimates.
Within the 2019 total, trade in coking coal used for steelmaking dropped by 1 percent to 287 million tons as steel production declined, the Verein der Kohlenimporteure estimated.
But trade in steam coal, used in power stations, rose by 1.2 percent to 932 million tons.
World demand growth was mainly led by India, where the start-up of new power plants pushed imports over by 5.3 percent to 235 million tons, delivered largely from Australia, Indonesia and China, VDKI said.
In large parts of the Asia-Pacific market, there is no alternative to coal, said VDKI, although noting South Korea received 7 percent lower imports after regulating to curb emissions of particulate matter.
By contrast, the Atlantic market was structurally weak due to a greater focus on renewable energy in developed countries making stronger efforts to try to combat climate change.
In addition, a natural gas glut made gas a relatively cheap alternative to coal in western Europe, with the benefit of cutting roughly in half the CO2 emissions compared with power generation plants run on coal.
The year 2019 was particularly bad for imports into Germany, VDKI said separately.
World coal demand is expected to remain stable until 2024, the International Energy Agency said last month.
Analysts, citing south-east Asian demand growth, expect a price recovery this year.
Longer term, the 2015 Paris Climate Agreement demands a virtual end to coal power by 2050, which country representatives must pursue after failing to decide on explicit steps at a December summit in Madrid.
Meanwhile, Germany imported 40.2 million tons of hard coal last year, 14.7 percent less than in 2018 due to competition from renewables and gas, and as the steel industry curbed usage, importers said on Friday.
The total was comprised of an estimated 7.4 percent lower intake of coking coal for steelmakers, who purchased 11.5 million tons and a 15.5 percent fall in purchases of coke, a related product, of 1.9 million tons, lobby group VDKI said at its annual meeting.
Thirdly and most significantly, purchases by coal-to-power generators, the biggest user group, fell 17.4 percent to 26.8 million.
“Coal is being pushed out not only by renewable energy, there is an additional price competition with natural gas while carbon emissions permit prices are rising,” said the group’s managing director, Franz-Josef Wodopia.
Emissions allowances are a mandatory input for power generators.
Their prices have increased strongly amid political moves to tighten supply, in order to raise prices and incentivize the avoidance of more CO2 pollution.
Coal consumption was also hit because of the ongoing expansion of wind and solar power plants in the green energy transition, which are driven by the weather and whose output volumes are given priority on transmission grids.
VDKI did not give an import forecast for 2020.
Policymakers on Thursday finalized details of a long-term exit plan from burning domestically mined brown coal up to 2038 due to be passed by the cabinet by the end of this month.
VDKI criticised planned stipulations relating to phasing out sizeable hard coal capacity by 2026 and more still by 2030 and finally 2038. Known since last year, the plans may or may not be passed along with those for lignite. — Reuters
