Happy New Year to all our World Coal readers and supporters, and best wishes for 2022.
Another year has dawned, bringing with it the usual mix of excitement, anticipation, and optimism. I for one am particularly excited for a return to meeting with my colleagues face-to-face on a more regular basis, as well as getting back to in-person mining conferences and events. All being well, first up will be MINEXCHANGE 2022 SME Annual Conference & Expo (27 February – 2 March), so make sure to visit our stand (1525) and say hello.
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2022 will almost certainly be another turbulent year for the coal industry; however, it cannot be denied that there is some cause for optimism as we begin the year.
As I discussed in my previous Editor’s Comment, the language of the COP26 agreement has proved pivotal to keeping the door open for the coal industry to continue contributing to the global energy mix.1 Moreover, at least in the short term, the world has in fact increased its dependence on coal to help meet its growing energy needs, which led to record production in several regions at the end of 2021.
This was mostly clearly observed in China, where the government actively encouraged miners to ramp up production, in order to safeguard the country’s energy supplies through the recent winter gas crisis.2 According to The Guardian, this “coal binge” amounted to 384.67 million t of coal being mined in December 2021 alone, far outpacing the previous record of 370.84 million t (set in November 2021).2 Perhaps unsurprisingly, this strong surge in output to close out the year subsequently led to the setting of a new Chinese annual record for coal production.2
Underlining that this trend is no mere regional phenomenon, the International Energy Agency (IEA) reported in mid-December, having just released its new Coal 2021 report, that, after falling in 2019 and 2020, global power generation from coal was expected to jump by 9% in 2021 to an all-time high of 10 350 TWh.3 Furthermore, in the same announcement, the IEA outlined that, depending on weather patterns and economic growth, overall coal demand could reach new all-time highs as soon as 2022 and remain at that level for the following two years.3
These reports certainly give reason for optimism around the coal industry and continue to provide evidence that the ‘death of coal’ is not yet upon us, however the fact remains that the future of coal is uncertain.
We do not have to look far to see that not all regions of the industry are experiencing like for like circumstances. For example, Adam Woods, Luke Fritz, and Elyse Steiner, Wood Mackenzie: Coal Research Team, outline in their regional report (pp. 10 – 14) how while the US coal industry is making a “surprising recovery” after the initial shock of the COVID-19 pandemic, it is an industry very much under pressure. In their words: “mounting climate concerns, environmental regulations, and environmental, social, and governance pressures weigh on a market already in structural decline”. Make sure to read the report in full for more details.
To conclude, while there is cause for optimism – coal having proved its enduring value as an essential part of the global energy mix to end 2021 – it is worth us all proceeding into 2022 with caution. ‘Climate concerns’ is a phrase that is not going to go away, and there are sure to be many other obstacles lining the road ahead.
- OWEN, W., ‘Editor’s Comment’, World Coal, Issue 4, Vol. 30, No. 4, (December 2021).
- AMBROSE, J., ‘China’s coal production hit record levels in 2021’, The Guardian, (17 January 2022) https://www.theguardian.com/environment/2022/jan/17/chinas-coal-production-hit-record-levels-in-2021
- ‘Coal power’s sharp rebound is taking it to a new record in 2021, threatening net zero goals’, International Energy Agency (IEA), (17 December 2021), https://www.iea.org/news/coal-power-s-sharp-rebound-is-taking-it-to-a-new-record-in-2021-threatening-net-zero-goals