Coal to fuel revival . . .
Countries across the Asia Pacific are banking on a renewed demand for coal to boost economic growth and employment as their economies recover from COVID-19 lockdowns. In China, coal imports rose by 22 per cent year-over-year in April as traders began stocking up. China said it would allow more power plants to be built and committed billions of dollars to accelerate the construction of coal-powered plants and electricity transmission lines. India also committed billions for coal transport infrastructure and coal mining as part of its stimulus measures. In Queensland, Australia, the giant Glencore Plc coal mining project has been fast-tracked. Analysts also expect Japan and South Korea to finance their recoveries by investing in the struggling coal industry.
Others pushing for a green recovery . . .
As the global transition away from coal suffers a setback, other stakeholders are pledging to press ahead with a green recovery. They consider coal an unsustainable option as more and more governments and energy companies turn away from the fossil fuel in the face of public pressure. That’s the case for Mizuho Financial Group and Sumitomo Mitsui Financial Group Inc., two major Japanese banks that announced they would end coal financing. Also in Japan, Tepco announced plans to invest C$24.5 billion in hydro and wind projects, and Japan’s Prime Minister and Environment Minister both pointed to the importance of clean power for the country’s economic recovery. In South Korea, President Moon Jae-in promised a Green New Deal to revive the economy, including plans to end public financing of coal-based electricity.
Coal likely to prevail in developing Asia . . .
Despite calls by the EU, IMF, and the UN to use the COVID-19 economic recovery to boost the transition to clean power, it is unlikely that the use of coal, one of the cheapest forms of energy, will subside in Asia despite drops in demand in 2020. Furthermore, developing economies’ less demanding climate goals are likely to fail to constrain governments’ investments in fossil fuels. Experts forecast that global coal consumption will rise until 2030, with the global share of consumption in Asia rising from 77 per cent to 81 per cent. Indeed, more than C$690 billion is currently invested in new coal power capacity projects in Asia.
- Bloomberg Green: The pandemic has everyone ditching coal quicker — except Asia
- Corporate Knights: Green recovery fever spreads around the globe
- The Japan Times: Post-pandemic stimulus may slow end of coal in Southeast Asia and Japan