Frequently Asked Questions - Coal

Isn’t it true that major countries are moving away from coal as an energy source?

Coal will remain an important part of the global energy mix for the foreseeable future.

While coal demand is falling in Europe and North America, it is still growing in Asia, where over half the world’s population lives. This is because coal delivers secure, affordable and reliable energy and is a critical input for steel-making and cement. 

Coal is a nation-building material that is indispensable for the provision of essential infrastructure. That means coal extraction and use are set to continue to expand over the next two decades or more.

Global energy demand and the growth of coal-fired electricity in the Asia-Pacific remains critical to securing affordable and reliable baseload power across the region.

BP’s Statistical Review of World Energy shows coal generation is now the highest it has ever been – increasing 6.24 percent over the past two years, representing 38 per cent of all electricity generation.

200,000 MW of new coal-fired generation capacity is now under construction globally, and in 2030, coal is expected to fuel 10,253 terrawatt hours of electricity (31 per cent of global generation) – nearly twice as much as hydro, four times more than wind and eight times more than solar.

About 70 per cent of steel is made with coal globally. In Europe this figure is 56 per cent but in China it is 85 per cent. The drivers for coal use remain unchanged: it helps lift people  out of poverty and  ensures robust reliable energy sources for power, industry and chemicals/future fuels production (such as hydrogen), which will advance industrialisation and urbanisation.

How can you have a low emissions future while still using coal?

Coal has an important role in a secure and sustainable energy future, which  will ultimately need to be a low carbon future.

The technology exists to achieve this, including:

High efficiency, low emissions (HELE) power generation technologies produce more energy from a given amount of coal or gas input than conventional power generation while reducing CO2 emissions by up to 40 per cent

Carbon capture and storage (CCS) can be integrated into HELE power, gas processing, steel, cement and other industrial plants to reduce CO2 emissions by up to 90 per cent.  Modelling by the International Energy Agency and International Panel on Climate Change shows that without CCS, meeting climate goals will be significantly more expensive.

Accordingly, investment in both HELE and CCS technologies is vital in meeting emissions reduction goals cost-effectively.

Some 286 gigawatts of HELE coal-fired power plants are planned or under construction around the world. 

Once completed, these plants could cut 2 gigatonnes of CO2 emissions every year – an amount equal to India’s annual CO2 emissions.

Globally, there are 22 large-scale CCS projects in operation or under construction, with a total CO2 capture capacity of around 40 million tonnes a year. But many more CCS projects are needed.

The projects include Canada’s Boundary Dam project, the world’s first commercial coal-fired power plant with CCS. Boundary Dam has applied CCS to an ageing brown coal plant to achieve an annual emissions reduction of 1 million tonnes of CO2. That’s the equivalent of taking 250,000 cars off the road every year.

In Australia, CO2 has been successfully captured at Queensland’s Callide coal-fired power plant and over 65,000 tonnes of CO2 have been successfully sequestered in a depleted gas field in Victoria’s Otway Basin

What would a transition away from thermal coal production do to Australia’s exports?

Last year coal became Australia’s number one export earner, with higher prices and export volumes supporting a record high $66 billion in export revenue. These exports provide highly paid, highly skilled jobs and prosperity for regional  communities.

And export revenue forecasts confirmed that export revenue from coal, iron ore and gold will continue to be strong, boosting Australia’s national income and generating jobs.

Australia’s resources sector generates 55 per cent of the nation’s export revenue and directly employs 250,000 Australians in highly paid jobs, particularly in regional communities.

A recent report by Deloitte Access Economics commissioned by MCA showed the mining industry including thermal coal generated $12 billion in royalties for state governments in 2017-18 and paid $18.6 billion in company tax.

What role does the Minerals Council see coal having in Australia's future?

Coal will be an important part of a diverse future energy mix in Australia which should also include renewables with storage, gas and nuclear energy.

Coal currently delivers 70 per cent of our power needs, providing affordable, reliable electricity to Australian homes and businesses.

It is also our biggest export, creating jobs and sustaining regional communities while helping to reduce emissions in high-growth Asian economies and elsewhere because of its high energy output.

The Australian coal industry will focus on reducing emissions still further into the future as our energy mix changes while demand for power increases, including carbon capture, utilisation and storage and new generation technologies.

Isn’t it true that renewables can replace coal as our biggest source of energy?

While the trend towards greater technological diversity will continue, it is important to recognise the central role of baseload power sources – including coal and uranium – in meeting the growing global demand for energy.

Replacing fossil fuels with solar would require 100 times the current total installed capacity, cover 95,900 km2 of land and take 470 years to install at current rates.

Replacing fossil fuels with wind power would require 35 times the present installed capacity, at a rate of 630 new 3 megawatt wind turbines per day to achieve replacement by 2030.

Replacing fossil fuels with hydro would require 13 times current capacity at a rate of 310 dams a year.

Restructuring economies to succeed in a carbon constrained world and achieve the Paris Agreement objectives at least cost will require the full range of low emissions technologies.

This means we need investment in renewables, nuclear and fossil fuel technologies (including coal and gas with CCS or carbon capture, utilisation and storage [CCUS] in power and industrial production) in order to achieve the necessary deep cuts in emissions.

As the International Energy Agency explains in three recent reports:

‘even if wind and solar PV deployment could be accelerated, other low-carbon technologies like nuclear power and CCUS also need to be expanded at massive scale to decarbonise the power sector’ (Securing Investments in Low-Carbon Power Generation Sources, June 2019)

CCS must also play a critical role in hard-to-abate industry sectors because industry is the basis for prospering societies and central to economic development (Transforming Industry through CCUS, May 2019)

CCS technologies will play an important role in meeting energy and climate goals but require significant investment to get back on track with what is needed (Technology Innovation to Accelerate Energy Transitions, June 2019)