China’s move to increase coal supplies won’t affect decarbonisation

(China Dialogue, 20 Jul 2022) By boosting domestic coal production, China is ensuring supplies in a tight global market. Experts say these measures are short term and not a risk to the low-carbon transition.

On 1 January, Indonesia banned exports to protect supplies for its power stations. The month-long measure by the world’s largest coal exporter injected volatility into the international coal market, but the war in Ukraine really set prices rocketing.

Data from the website Markets Insider shows that coal cost US$190.65 a tonne the day before Russia invaded Ukraine and more than doubled to $439 in the following weeks. It then fell to $395 on 13 July – still 107% higher than before the war.

The Western-led sanctions on Russia are a factor in the price increase, causing several countries to look elsewhere for supplies and worsening shortages on international markets.

What did this mean for China, the world’s biggest producer, consumer and importer of coal? And how will the energy security concerns arising from tight global coal supplies affect the country’s progress towards its “dual carbon targets” of peaking emissions before 2030 and reaching neutrality before 2060

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China Dialogue, 20 Jul 2022: China’s move to increase coal supplies won’t affect decarbonisation