Climate Change is driven by Coal - IAE

Published by MAC on 2011-06-07
Source: Bloomberg, PlanetArk

China Coal Imports To Double In 2015, India Close Behind

By Rebekah Kebede and Michael Taylor

PlanetArk

31 May 2011

Top coal consumer China should see import demand more than double in the next four years and India will be close behind as both hoover up supplies on international markets to feed rapidly growing power industries, industry executives said on Monday.

China's thermal coal imports could rise to 200 million tonnes in 2015 from around 90 million tonnes in 2011, Neil Dhar, executive vice president of trading house Noble Group, told the Coaltrans Asia conference.

At 90 million tonnes, China's 2011 imports would be steady from 2010, he said. That would indicate shipments would rise for the rest of the year, as China's imports in the first four months of 2011 were down a quarter on 2010.

The flow into China, which emerged as the world's second-largest coal importer after Japan last year, fluctuates according to domestic coal prices and whether or not those are high enough to encourage more electricity output from coal-fired power producers.

China boosted power prices on Monday in an attempt to ease its worst power shortages since 2004. That may encourage more coal imports to boost power supply.

India's thermal imports could rise to more than 100 million tonnes by 2015, from around 67 million tonnes in 2011, Dhar said. Imports would jump by almost 10 million tonnes this year, he added.

Despite a bullish long-term outlook, Asian coal prices have been depressed in recent months, largely due to the aftermath of the Japanese quake and tsunami in March that knocked out some coal-fired plants.

The index for Australian coal on the globalCOAL index closed at $119.47 a tonne on Friday, down from more than $140 in January when prices were driven up by flooding and wet weather in Australia's eastern Queensland state.

Who Buys More From Indonesia?

India will overtake Japan as the biggest buyer of Indonesian coal in 2011, staying ahead of China in the competition for supply from the world's top thermal coal supplier. Most of India's coal imports come from Indonesia.

India's domestic shortfall in coal supplies to meet power demand will spur the country to import up to 60 million tonnes from Indonesia this year, five million tonnes more than last year and surpassing Japan as top importer, said Bob Kamandanu, chairman of the Indonesian Coal Mining Association.

Imports from Indonesia to India, Asia's third-largest economy, would race to 90 million tonnes by 2013, Kamandanu told Reuters.

"Japan has traditionally been the leader at importing Indonesian coal, but now India is surpassing it," Kamandanu said on the sidelines of the conference. "In terms of tonnage, India is moving toward 50-60 million tonnes... very strong.

Demand from India's growing number of independent power producers would push the country's imports, Kamandanu said.

Japan, which suffered a massive earthquake and tsunami in March, would import 57 million to 58 million tonnes of Indonesian coal this year, down from previous peaks of around 65 million tonnes and unchanged from 2010.

The disaster in Japan shut down some coal-fired power plants along the northeastern coast, crimping demand. Japan's thermal coal imports in April fell 13.4 percent on the year to 6.591 million tonnes.

Cranking Up Output

Indonesia's coal mining companies are already cranking up production to meet the fast pace of demand growth, and the country and Kamandanu forecast the country would produce 340 million tonnes this year up from 320 million tonnes in 2010.

"All the big guys are increasing their numbers," he said.

Bayan Resources Tbk, the country's eighth-largest coal miner, is projected to more than double its output to as much as 25 million tonnes by 2013 versus last year, said chief financial officer Alastair McLeod. The company's main focus was on striking long-term supply deal to India, he added.

Bayan expects to produce 14.5 million to 15.5 million tonnes in 2011, up from 11.9 million tonnes in 2010, he told Reuters in an interview.

"We started two new mines in 2008 and two new mines in 2009, therefore they have a ramp-up profile over four or five years before they get up to their capacity," McLeod said. "We'll be continually ramping up -- our target by 2013 is to get to 20-25 million tonnes."

Another major Indonesian coal producer, Bhakti Energi, is also eyeing the stiffening competition between China and India for Indonesian supplies.

"India has no alternative for its energy resources. India will become a very good importer for Indonesia," said Bhakti's president director Jeffrey Mulyono.

"China is different. China is growing well in demand but they still have alternatives for fulfilling (coal) combinations with their own development."

Mulyono expects Indonesian coal output to rise at least 10 percent annually over five years, and sees the easternmost province of Papua tapping into its huge coal reserves longer-term.

(Editing by Simon Webb)

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IEA Sees Record CO2 Emissions In 2010

By Muriel Boselli

PlanetArk

31 May 2011

Global emissions of carbon dioxide hit their highest level ever in 2010, with the growth driven mainly by booming coal-reliant emerging economies, the International Energy Agency's chief economist said on Monday.

Fatih Birol warned that carbon dioxide emissions were coming close to a target set by the 190-nation Cancun climate talks last year to limit global warming to less than 2 degrees Celsius above pre-industrial times.

CO2 emissions rose by 5.9 percent to 30.6 billion tonnes in 2010, Birol said, citing IEA estimates,

"It's a very strong rebound in CO2 emissions, driven mainly by the non-OECD countries," Birol told Reuters in an interview, adding three quarters of the growth came from emerging economies such as China or India.

"It's the highest ever growth in history," he said.

Christiania Figueres, head of the United Nation's Climate Change Secretariat, called the figures a "stark warning to governments to make rapid climate progress," starting with a meeting of government negotiators in Bonn from June 6-17.

Governments "need to push the world further down the right track to avoid dangerous climate change," she said in a statement. "I won't hear that this is impossible."

The Paris-based IEA, which advises its members on energy policy, has also carried out an analysis on the world's power plants showing 80 percent of the electricity generation related emissions for 2020 are already locked in.

"The room for maneuver is only of 20 percent," he added.

Birol blamed the lack of a climate change agreement and policy makers indecision on which cleaner burning technologies to support for the increase in CO2 emissions.

The Cancun climate change talks that took place at the end of 2010 failed to reach a binding deal extending the Kyoto Protocol for cutting CO2 emissions beyond 2012.

Scientists say rising levels of CO2, the main greenhouse gas from burning fossil fuels and deforestation, is warming the planet.

"Every year we don't have a (climate change) agreement, every year we don't give a clear signal to pave the way for renewable energies and other clean energy technologies, the room for maneuver to get to the 2020 target shrinks," he said.

There was also concern that after the Fukushima nuclear disaster in March, many countries, such as Germany, were opting out of nuclear energy, which emits virtually no CO2, Birol said.

"The less nuclear growth means higher CO2 emissions compared to what people thought a couple of months ago," he said.

The growth in CO2 emission was mainly led by coal, natural gas and oil, Briol added.

The IEA urged oil producing countries to boost supply to cut fuel costs to protect economic recovery earlier this month and appeared to suggest its members could release emergency stockpiles if OPEC did not act at its next meeting on June 8.

(Editing by Leslie Gevirtz)