Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Analysis-China's pledge to cut project finance is the 'new normal' for coal

CommoditiesSep 23, 2021 12:40
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: A leaf sits on top of a pile of coal in Youngstown, Ohio, U.S., September 30, 2020. REUTERS/Shannon Stapleton/File Photo

By Melanie Burton and Fransiska Nangoy

MELBOURNE/JAKARTA (Reuters) - Australia and Indonesia, the world's biggest coal exporters, face an accelerated decline in global demand for their coal shipments after China said it would stop building coal-fired power plants overseas, analysts, environmental groups and industry officials said.

Chinese President Xi Jinping announced the move at the United Nations General Assembly on Tuesday, prompting environmental campaigners to predict a direct impact on major coal exporters.

Beijing's pledge is the latest blow for Australian and Indonesian coal miners as more energy systems globally make the shift to renewables, however, the Australian industry continues to push for a role for coal in the global power mix.

"I think it's the new normal," said Pandu Sjahrir, chairman of Indonesia Coal Miners Association, when asked whether coal miners must accept that global demand may have peaked.

For more than a decade, Australia and Indonesia have been the dominant global coal exporters, accounting for more than half of all coal shipments.

Both countries also export more coal than they consume, with Australia shipping out more than 75% of its coal, while Indonesia exports roughly 60% of production, based on the BP (LON:BP) Statistical Review of World Energy 2021.

(Key coal consumers, exporters and importers -


Julien Vincent, executive director at environmental group Market Forces said: "Australia's coal industry has been gambling on increasing coal-fired power generation in developing countries to replace declining long-term demand in places like Japan, South Korea and Taiwan."

Analysis by Market Forces shows since the Paris Climate Agreement in 2015, the global coal power development pipeline has dropped by 76%.

China's statement will only accelerate this trend, Vincent said.

Estimates earlier this year from Australia's Department of Industry see coal exports continuing to climb for both countries - to 213 million tonnes for Australia and 442 million tonnes for Indonesia by 2023.

Looking further ahead, consultants Wood Mackenzie said China's pledge to stop financing new coal-fired plants abroad puts at risk 29 gigawatts of coal-fired plants the firm had expected to be built in Indonesia beyond 2025, which could result in higher coal exports from there.

Rystad Energy consultants forecast that global coal demand will peak in 2024 at close to 10,000 terrawatt hours (TWh). But the consultancy also said they would have to slightly revise their outlook for a fall to 6,000 TWh by 2040 due to China's move to stop financing coal plants abroad.

"As a result of this announcement, the decline from 2025 onwards will be slightly steeper than previously expected," Rystad vice president Xi Nan said.

(Global CO2 emissions vs coal use -


Yancoal Australia Ltd, Australia's largest pure-play coal producer and leading thermal coal exporter, said it expects continuing demand for coal across Asia for power generation and to make steel and concrete, and said its lenders and investors still see the company as a profitable business.

"Australia will continue to play a critical role as a primary source of premium grade metallurgical and thermal coal," a Yancoal spokesperson said.

Mining groups Whitehaven Coal and New Hope Corp declined to comment.

The Minerals Council of Australia (MCA) said governments and industry in Asia should step up efforts to cut emissions through measures like carbon capture and storage at existing plants.

"More of this is what's needed to both reduce emissions and continue to allow countries a full suite of energy options for their development," MCA Chief Executive Tania Constable said.

Analysis-China's pledge to cut project finance is the 'new normal' for coal

Related Articles

Oil Down Again Sharply Intraday; Will it Stay Down?
Oil Down Again Sharply Intraday; Will it Stay Down? By - Jan 24, 2022

By Barani Krishnan - The invincible oil market can fall, too, as Monday’s trade showed. The question is will it stay down or recover substantially by the close, as it...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email