HOGSBACK

Asia still a coal hotspot

AUSTRALIA used to suffer from the “tyranny of distance”. Now it enjoys the “benefits of proximity” to our near Asian neighbours to the north who believe in the value of our high-quality thermal coal.

 Coal is actually a healthy option for India and many Asian countries.

Coal is actually a healthy option for India and many Asian countries.

India's demand for thermal coal is also expected to grow by more than 4% on average over the next five years to 2026, according to the federal government's latest Resources and Energy Quarterly Report.

According to the International Energy Agency, 237 million people in India have no access to electricity.

India's residential electricity consumption - for those who have power - lags well behind the world's average and is, according to the IEA, ten-times lower than that of OECD countries.

For example, average residential consumption in Bihar is about 50 kilowatt-hours per capita per year, which equates to an average household use of a fan, a mobile telephone and two compact fluorescent light bulbs for less than five hours a day.

On top of that, 67% of India's population rely on wood or animal dung fires to cook.

The NSW Department of Planning, Industry and Environment says in its NSW Clean Air Strategy 2021-30 draft report that wood burning for heat or cooking is a major health hazard in the Hunter Valley.

It is also a major contributor to the terrible smog enveloping major Indian cities that leads to premature death and breathing difficulties.

Coal is actually a healthy option for India and many Asian countries.

Queensland Resources Council CEO Ian Macfarlane said between 2020 and 2026, South Asia and South East Asian demand for thermal coal was forecast to grow 52%, and this figure did not include India.

"So there is still a very strong market for Queensland's thermal coal during the world's transition to a low-carbon future," he said.

Whitehaven Coal's board summed the situation in Asia very nicely when it advised shareholders to vote against a resolution by activist group Market Forces that it should wind up its production assets and operations in a manner consistent with the goals of the Paris Agreement.

"The suggestion that the Paris Agreement requires Whitehaven to wind up its production assets and operations is a misrepresentation," it said.

"The Paris Agreement does not dictate how emissions reductions should be achieved. For example, in Japan, Whitehaven's key export market, high quality coal remains part of the government's Nationally Determined Contribution to achieve its emissions reduction ambitions.

"Under the International Energy Agency's World Energy Outlook scenarios there will continue to be global demand for coal beyond 2040."

Whitehaven and the Australian coal industry are leveraged to the continuing forecast demand that exists in Asian export markets, where rapid electrification and the relative youth of the installed power generation fleet mean coal will generate value for years to come.

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