Every country’s focus of attention has always been its economic progress. The world in the past six decades, has achieved tremendous progress with global GDP per capita having nearly tripled since 1960.
This progress has come, however, with rapid growth of global population and at a huge environmental cost. The extent of which could be measured by CO2 emissions having quadrupled during the same period.
All the nations of the world, fearing escalating risks of climate change and green house effect urgently turned its attention to it. To ensure a stable climate, on the commitment of the Paris Agreement, UNEP identified sectors having potential to reduce the global warming. One of these was to shift to renewable energy and curb burning of fossil fuels.
Burning of fossil fuels in homes, Industries, automobiles etc results in increased levels of CO2 and CH4 in atmosphere. The greenhouse gases mainly trap the heat reflected by the earth leading to increase in Earth's temperature or global warming.
Right when the nations were debating different measures to combat this, the world was gripped by the energy shortage. Sparked by Russia Ukraine crisis and the ensuing sanctions on Russia and supply chain disruptions.
Curbs on carbon emissions swiftly took a backseat as markets and governments scrambled to stock up on traditional energy supply amid bottlenecks thus caused. Europe’s energy shortage led a resurgence back to coal power.
With the global economy recovering sharply from the Covid pandemic, coal consumption rebounded by about 6% in 2021. It is expected to return to record levels of almost 10 years ago as the global energy supply crunch continues.
Global coal demand is being strengthened up this year by rising natural gas prices, which have intensified gas-to-coal switching in many countries and because of the slowing investments in new coal-powered energy facilities, further tightening the supply.
Demand for coal in India has been strong since the start of 2022 and is expected to rise by 7% for the full year as the country’s economy grows and the use of electricity expands. In China, coal demand is estimated to have declined by 3% in the first half of 2022 as renewed Covid lockdowns in some cities slowed economic growth, but it is anticipated that the second half of the year is likely to bring coal consumption for the full year back to the same levels as last year. China and India combined consume almost double the amount of coal than the rest of the world altogether, with China itself accounting for more than half the world’s demand.
The higher price environment of coal prices may well accelerate the move towards alternatives, but the coal price big time may be far from over. The thermal coal outlook may continue to be positive on the back of a “willingness to pay a premium to secure energy supply”.
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