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CRU: Coal Demand Continues to Rise Despite China's Greener Drive

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CRU: Coal Demand Continues to Rise Despite China's Greener Drive

PR Newswire

LONDON, Aug. 3, 2018 /PRNewswire/ --

Coal demand continues to rise despite China's greener drive (PRNewsfoto/CRU)

Despite its ambitions for a greener environment, China's growing demand for power means that coal will remain an important source of fuel for many years to come.  

Coal's share in power is expected to gradually fall as the government's desire to shift to gas increases. This Insight explores how soaring gas import prices and insufficient infrastructure are limiting the extent to which gas can replace coal in the medium term.

Environmental policies stricter and more expansive

China is having to find the right balance between its traditional mantra of strong economic growth with its more recent quest for a growth that is more environmentally and financially stable. It appears China is willing to sacrifice domestic production and trade for cleaner air.

In early 2016, the National People's Congress of China ratified its 13th 5-year plan. It included more stringent environmental policies designed to reduce air pollution by promoting the use of natural gas. The largest step taken to meet these targets is the '2+26 cities policy'. This policy targets pollution in the winter months (October – March), by monitoring the biggest polluting industries in the 2 provinces and 26 cities most inundated with smog. The strict targets are met by shutting down heavy industry that cannot operate below a certain emission threshold in winter – when the demand for residential heating naturally rises. These policies also encourage industry to use cleaner fuels, as a way of ensuring they can stay open throughout the year.

How China's quest for blue skies is progressing

China's power demand has been rising rapidly. During the first five months of 2018, power demand grew by 8.5%, up from 6% in 2017. We attribute this rise to the growing demand for power from the residential sector, which increased by 13% y/y since the start of 2017. We also believe that improving environmental efficiencies has forced industry to become more power intensive to meet specific requirements. As such, we expect total power generation to continue to rise at a similar rate, with coal power generation also increasing from current levels however, its share in the power mix is expected to fall over time.

Read the full story: https://www.crugroup.com/knowledge-and-insights/insights/2018/coal-demand-continues-to-rise-despite-china-s-greener-drive/ 

Read more about CRU: http://bit.ly/About_CRU 

About CRU

CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.

CRU employs over 260 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004.

When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.

CRU – big enough to deliver a high-quality service, small enough to care about all of our customers.

CRU Logo (PRNewsfoto/CRU)

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