Friday, June 10, 2016

BP:  Global Coal Use Fell by Largest Recorded Margin in 2015

Consumption by Region (Credit: Click to Enlarge
Global coal use fell by more than 70 million tonnes of oil equivalent (Mtoe) – a 1.8% decline – in 2015, the largest annual reduction in records going back half a century, according to BP.

The data, from BP’s statistical review of world energy 2016, shows a declining role for coal as oil, gas and renewables all gain ground.  Coal is one of the most polluting sources of energy and limiting its use will be key to achieving the aims of the Paris Agreement on climate change.

Indeed, global energy-related CO2 emissions stopped growing last year, BP says, and the record reduction in coal was a key factor.  Carbon Brief explores why coal use fell so much last year.

Record coal drop
The reduction in global coal use last year is unprecedented during the 50-year dataset of BP’s statistical review.  The 71Mtoe fall is the largest recorded in tonnes, and also in percentage terms.

This striking reduction has been reported by the Financial Times and the Telegraph.  Spencer Dale, BP chief economist, called it an “annus horribilis” for coal, the Times adds. But why did it happen?

Only a handful of other years have seen a year-on-year drop in global coal use.  Typically, these have followed recessions, such as those in the early 1990s, the 1997 Asian financial crisis and the 2008 global financial crisis.  In contrast, the global economy grew an estimated 3% during 2015.

It’s interesting to note that the record fall in coal use came despite falling prices.  Global coal prices have roughly halved since 2012, after four straight years of declines.  The global coal trade has also cooled, with volumes falling for that past two years.

China and US plummet
The global reduction in coal demand was driven by the US, where it fell by 58Mtoe (12.7%) and China, down 29Mtoe (1.5%).  These reductions were only partially offset by rising coal use in India, up 19Mtoe (4.8%).

The EU saw a relatively small 5Mtoe reduction in coal demand, while the rest of the world was flat.  Strong, 15% growth in Malaysia, Vietnam and Indonesia was offset by sharp falls elsewhere, particularly a 5% reduction in former Soviet states, struggling with the financial impact of cheap oil.

For the US, a continuing shift towards gas-fired power generation along with growth in renewables, electricity demand in long-term decline and the closure of older, more polluting coal plants is behind the reduction.

Read more at BP:  Global Coal Use Fell by Largest Recorded Margin in 2015

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