CANBERRA: Australia could see steep declines in coal exports over the next two decades that would wipe billions of dollars off export income and slash government revenues as a result of global policies to limit climate change. The impact on export income could be even greater if the price of thermal coal, which is used to generate electricity, falls as steeply as some forecasts suggest. The shift would also cause heavy job losses in areas such as the Hunter Valley.
Policy moves to limit to 2 per cent the rise in temperatures could result in a 40 per cent slide in the trade of steaming coal, which is mostly used to generate electricity, according to a study by industry expert Wood Mackenzie. Thanks to the higher quality of its coal, the impact on Australia’s miners would be more muted, with an estimated 35 per cent cut to its exports of thermal coal, which is mostly mined in NSW and Queensland, but with a much greater impact on countries such as Indonesia, which produces lower quality coal.
After the ratification of the COP21 Paris climate change agreement at the Group of 20 meeting last weekend, Wood Mackenzie forecast that steaming coal exports worldwide would decline to 527 million tonnes by 2035, down from an estimated 900 million tonnes shipped in 2016. “Asia, Europe and the Americas will import 433, 80 and 15 million tonnes, respectively, in 2035 from 673, 170 and 39 million tonnes respectively, estimated for 2016,” said Prakash Sharma, the research director of global coal markets at the consultancy.
