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Indonesia and Australia account for more than half of global coal exports in 2020: EMBER report

Emissions from seaborne coal exports from global hubs found to be up to two times domestic emissions in major coal exporting countries

Coal shipped overseas was responsible for a tenth of global annual energy-related carbon dioxide (CO2) emissions in 2020, according to energy think tank Ember. It reveals that Indonesia and Australia account for more than half of global seaborne coal exports in 2020. 

The analysis was done as per the new interactive Coal Shipping Dashboard published by the energy think tank along with new data on seaborne coal exports in 2020 and the ‘Scope 3’ emissions generated when customers burn this coal. It focuses on seaborne coal trade and leaves out coal trade occurring on land routes.

Scope 3 is one of the categories of greenhouse gas emissions (GHG) which include all other indirect emissions that occur in a company’s value chain.

Indonesia and Australia dominate seaborne coal exports in 2020

According to the analysis, Indonesia and Australia account for more than half of global seaborne coal exports in 2020— around  59%.  Out of 1.25 billion tonnes of global seaborne coal exported in 2020, these two countries accounted for 370 million tonnes each, while a meagre 2% of exports came from countries outside of the top 10 exporters, the study notes.

If scope 3 emissions from seaborne coal are taken into consideration, domestic emissions from Australia and Indonesia will increase by more than twofold, it says. Indonesia’s scope 3 emissions from coal exports are 1.5 times larger than its domestic emissions while Australia’s scope 3 emissions outweigh domestic emissions by a factor of 2

The analysis reveals that the top 10 exporting ports are responsible for 52% of global coal exports. Moreover, eight out of the top 10 exporting ports are located in either Australia or Indonesia, it says. Newcastle in Australia is the largest exporter port followed by Hay Point which is also based in Australia.

Highly geographically concentrated seaborne coal trade

Since most coal exports come from only a few countries and more than half of the global exports are done through 10 ports, the seaborne coal trade is highly geographically concentrated. This puts an onus over major coal exporters on the environmental impact of the global supply chain.

While the emissions from coal-fired power plants or steel plants are included in the importing country’s emissions, the exporting countries count these as scope 3 emissions, which are not monitored as rigorously and are generally not part of NDCs countries submit to the UN.

“While profits flow to coal exporting countries, the environmental impact is shipped overseas,” said Ember’s analyst Nicolas Fulghum. “They conveniently ignore their ‘Scope 3’ emissions despite their significant contribution to the world’s CO2 emissions.” 

Last year seaborne coal emissions accounted for around 31.5 billion tonnes which is more than India’s domestic emissions in 2019 (2.6 billion tonnes), the analysis states.

Net-zero pledges carve a path away from coal

With more countries pledging to net-zero emissions, it is assumed that there will be a fall in coal demand. Some of the biggest importers- China, Japan and South Korea have announced their goals to reach net-zero by 2060 and 2050 (Japan and South Korea) respectively, thereby indicating that they have plans to reduce consumption of coal for power generation. 

Europe has already seen a decline in coal-generated electricity. From 705 terawatt-hours in 2015 to 365 terawatt-hours in 2020, coal generation in the EU almost halved in the last 5 years. As a result, there is also a decline in coal exports in Europe.

According to Ember, coal generation is expected to decrease further in Europe and Organisation for Economic Co-operation and Development (OECD) countries as a new ‘consensus’ of a net-zero power system in the 2030s emerges. 

The COVID-19 pandemic has also expedited the process with some biggest consumers of coal or power generation in Europe seeing a notable decrease in demand. 

While coal exporters have started acknowledging that the European coal market is shrinking, there are some speculations that coal will continue to play a significant role in the import market of India and China. However,  Ember’s analysis shows that India’s coal demand in the electricity sector may have peaked already in 2018 and it will continue to decline in 2019 and 2020. Similarly, in its new net-zero modelling, IEA has also predicted that global coal demand drops by a quarter from 1700 million tonnes in 2020 to 1300 million tonnes in 2030, and by 80% to 340 million tonnes in 2050.

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