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As China Addresses Its ‘Airpocalypse,’ Coal Exporters Fear Loss Of Another Market

By Climate Guest Contributor  

"As China Addresses Its ‘Airpocalypse,’ Coal Exporters Fear Loss Of Another Market"

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By Lifeng Fang, courtesy of Greenpeace East Asia

China’s air pollution crisis is more evident than ever. A new research report, conducted under the World Health Organization’s Global Burden of Disease project, shows that over 1.2 million premature deaths were caused by PM2.5 pollution (fine particles like soot, mostly resulting from fossil fuel combustion). That accounts for 15 percent of the total deaths in China during 2010 and 40 percent of global air pollution-related deaths. The data also showed that Chinese people’s average exposure to PM2.5 increased 50 percent from 1990 to 2010, compared to 10 percent globally.

Burning coal is a leading cause of air pollution in China, coal fired power plants release dangerous pollutants such as SO2, NOx and particulate matter that contributes to PM2.5 pollution. Of course, burning coal is also a major source of the carbon pollution that is changing our climate.

The crisis was especially severe in Beijing earlier this year, when air pollution levels soared, “hitting pollution levels 25 times that considered safe in the U.S.”

After this so called “airpocalypse,” Chinese government officials and the public are paying increased attention to air pollution and the impacts of coal fired power plants. Seven high level government officials (including several vice ministers) issued a joint proposal during the annual political conference in March 2013, calling for a cap on coal consumption in key regions to clean up air pollution. The Beijing government has also released a plan to reduce air pollution.

It’s clear that addressing China’s air pollution crisis will require reducing coal consumption. In response to the air pollution crisis, Deutsche Bank issued a report on measures needed to bring air quality to acceptable levels. Their conclusion was that to meet national air quality targets even by 2030, China’s coal consumption will need to peak and decline within this decade. That would have big impacts on the global coal market – as Bloomberg News reported, “Global shipments of thermal coal could be 18 percent lower than forecasted by 2015 should China, the biggest importer, toughen measures to curb air pollution to safe levels.”

In fact, this trend has begun, and a note from Goldman Sachs predicts that “2013 will represent a watershed event for the seaborne market” because China’s thermal coal imports will fall this year, the first time that has occurred since the financial crisis in 2007-2008.

The prospect of reduced Chinese coal demand is already impacting the business plans of coal producers. A proposed coal export terminal in Australia was recently put on hold with the project backers citing “weak Asian demand,” as well as community opposition. The Wall Street Journal reports that for Chinese coal producers, “Faced with slowing domestic demand and attempts to reduce pollution, diversifying into other countries and commodities is the way forward.” Immediately after the Deutsche Bank report, Peabody’s stock fell 4.6%, “the result of an analyst citing the potential for Chinese coal demand to wane as the country fights pollution” according to the Motley Fool.

The U.S. coal industry is betting on China’s appetite for coal to justify its proposed Pacific Northwest terminals. But, the reality is that public opposition to coal is growing and people are demanding cleaner air. At the same time the government is creating policies to cap coal production and consumption, posing big risks for any coal producer counting on a growing Chinese coal market.

For more, see: “The Myth of China’s Endless Coal Demand: A missing market for US Exports

Lifeng Fang is an Energy Analyst for Greenpeace East Asia, based in Beijing.

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22 Responses to As China Addresses Its ‘Airpocalypse,’ Coal Exporters Fear Loss Of Another Market

  1. Brooks Bridges says:

    Great news! Can tar sands be far behind?

    Fits in with this interview with Jeremy Grantham in The Guardian: Excerpt:

    “Because of that pollution, they(China) announced recently an incredible increase of 65% in their plans to install by 2015 – just three short years away – 36GW, which is equivalent to 20 vast, state-of-art coal plants, of solar. Throw in wind, too.”

    The whole interview is well worth reading.

    http://www.guardian.co.uk/environment/blog/2013/apr/15/jeremy-grantham-population-china-climate

  2. rollin says:

    Coal is perfectly safe if left in the ground.

  3. fj says:

    This is very encouraging.

    Social change will drive the transition.

  4. Yes, good news, for a change. And good news on several levels.

    First, for the many Chinese people who have been living in the first ring of Hell that many of their cities have become. When the air pollution is so thick that you can see it on a little 76 ppm digital photo on the internet — as if there were a major fire just up the street — things are clearly out of control.

    Good news. too, that the Chinese government is responding. It’s hard to say whether it’s out of any genuine concern for the welfare of its people, of just because of internal political pressure, but the results are apparently the same — clean up the coal act and get on with renewables.

    It also means less pollution for all of us, of course, including a lowering of greenhouse gas emissions. Finally, it’s a blow to the American and Australian coal industries from which, we hope, they do not recover.

    • David Goldstein says:

      and, of course, once the sulfates are reduced, the dampening effect of the aerosals will diminish and we will get a spike up in global temps. But this is inevitable- can’t keep pouring out sulfates forever – so might as well get it over with and see where we really stand on warming.

    • Sasparilla says:

      Excellent points Philip (and everyone else). Good news to see this.

    • Merrelyn Emery says:

      Many of us hope so too. The writing has been on the wall since the last 5 year plan despite the industry’s desperate screams to the contrary, ME

      • Mulga Mumblebrain says:

        And despite the dullard bipartisan consensus of our political caste that mining coal could go on ‘for generations’ as Gillard said.

        • Merrelyn Emery says:

          That was posturing to counteract Abbott’s scare campaign. She knows perfectly well what the score is. Combet got a promotion while Ferguson is gone and Grey is a very pale imitation, ME

          • Mulga Mumblebrain says:

            If, dear ME, Gillard ‘knows the score’ why isn’t she shouting it out at every opportunity? Why has she almost never couched the carbon tax in terms of preserving human civilization, thereby by default conceding the field to denialists like Abbott and the mucilaginous Joyce? Why did she slash Green programs to raise money for flood relief in Queensland? I mean, optimism is preferable to pessimism, I grant you, but a little dose of realism goes a long way, too.

          • Merrelyn Emery says:

            I have heard her speak of the consequences in no uncertain terms as has Greg Combet and Tania Plibersek. You don’t have to speculate about human ‘civilization’ to get the message across. I actually run on realism rather than optimism dear Mulga, and I can assure you that there is a gathering wave of opposition to the FF industries which will eventually turn into a tsunami, ME

          • fj says:

            Yes.

            By all appearances there seems to be significant positivity bias to way humanity moves on the arrows of time; even in our equations and our maths where by default the positive or plus sign is understood.

          • fj says:

            There’s a very bizarre contrived convenient practicality to positivity bias as if life continually evolved to its detriment it would very quickly succumb.

    • fj says:

      Humanity is not meant to live the nightmares of much of the world’s cities.

      It is meant to live in the garden.

  5. catman306 says:

    Any blow to Business As Usual will come from outside, in this case, China’s air pollution lessens demand and changes American and Australian business plans.

    And this may help our feverish climate just a bit.

  6. Gingerbaker says:

    Perhaps coal sales losses can be be balanced by a new synthetic process that can turn raw coal into buggy whips?

  7. MarkF says:

    Maria Gunnoe, quoted in Rolling Stone Magazine online:

    “Mountaintop removal mining is against everything America stands for,” says Gunnoe, who’s now a community organizer for the Ohio Valley Environmental Coalition. “They say it about jobs and the economy, but it is not. It is about exploitation and greed.”

    “Companies are going for the jugular now. They know they are running out of time and will be replaced – eventually – with renewable energy. It’s time to go get ‘em. We need to show the world we are serious about this.”

    Read more: http://www.rollingstone.com/politics/lists/the-fossil-fuel-resistance-meet-the-new-green-heroes-20130411/maria-gunnoe-the-mountaintop-warrior-19691231#ixzz2QkOloriK
    Follow us: @rollingstone on Twitter | RollingStone on Facebook

    Very good article, profiles of a number of people working effectively for change.

    • Mulga Mumblebrain says:

      Gunnoe speaks as if there is just one ‘America’, when there is a multitude. The ‘America’ represented by those who own the country, see mountain-top removal as quintessentially ‘American’ in its ambition, greed, indifference to ecological damage and the ruination brought to the ‘little people’ who get in the way. I’d prefer that Ms Gunnoe, who is no doubt a fine person on the side of the angels, had said ‘..everything good that America stands for’, because, unfortunately, ‘America’ stands for bad and indifferent things as well as good ones.

  8. Joan Savage says:

    Chinese businesses have been turning to China’s own coal reserves, often in desolate western provinces far from their industrial east, and much of it poor quality coal.

    If the Beijing policy actually sticks, it would slow down that dirty coal extraction, as well as put on hold the specialized railroad that was designed to haul coal to eastern China.

  9. fj says:

    China and the US together full speed ahead for Poor People First Against Climate Change would be an adventure of truly legendary proportions.

  10. Bill says:

    I looked around – what is being reported is that coal use is dropping mainly because of reduced industrial production. Not that the PRC doesn’t have ample need to reduce its coal use – besides pollution, coal also requires use of often scarce fresh water. (@Bridges – will check out interview).

  11. Bill says:

    Yeah, looked around – from Time mag online Science and Space – & a Guardian article both from late January this year states that China is reported to burn as much coal as the rest of the world combined. Only low growth can change this equation in the short term – reduced need for industrial capacity – which reduces available capital for infrastructure. Problem with capitalist structure.