Coal shipped overseas was responsible for a tenth of global annual energy-related CO2 emissions in 2020. Coal exported in 2020 had the potential to produce 3.1 billion tonnes of CO2 emissions, which is more than India’s annual emissions, a new analysis released by Ember said.
The largest exporters, Australia and Indonesia, would see their domestic emissions more than double if these ‘Scope 3’ emissions from seaborne coal were included.
“While profits flow to coal exporting countries, the environmental impact is shipped overseas,” said Ember’s analyst Nicolas Fulghum. “They conveniently ignore their ‘Scope 3’ emissions despite their significant contribution to the world’s CO2 emissions.”
Scope 3 emissions are emissions caused by products exported to other countries or organisations. In the case of Indonesia and Australia, Scope 3 emissions from coal exports would double its domestic carbon emissions if accounted as its share of global emissions. The largest exporters of seaborne coal are Indonesia, Australia, Russia, and the US. Indonesia and Australia alone are responsible for 59% of global seaborne coal trade at 370 mega tonnes each in 2020.
Only 2% of exports came from countries outside the top 10 exporters. “Despite its significant contribution to the world’s CO2 emissions, the coal export sector and coal exporters have largely avoided scrutiny and responsibility. Despite net zero announcements from coal consuming countries, growing scrutiny of coal generation and higher carbon prices, there have so far been few binding agreements to address the supply side of the global coal industry,” continued Ember’s analyst Fulghum.
As the pandemic put a dent in global coal demand, Colombia’s exports declined by 30% in 2020 over 2019. Exports from Colombia and others to Europe have been in decline even before the pandemic. This trend is set to continue as more European governments are preparing to phase-out coal.
Coal exporters have started to acknowledge that the European coal market is shrinking, but are betting instead that coal will continue to play a key role in the energy mix in the major import markets of China and India. However, the Ember analysis showed that coal generation in India may have already peaked if the government is to implement its own clean energy agenda. In addition, Chinese Premiere Xi Jinping also announced to reduce coal consumption by 2025.
Similarly, under the IEA’s new net zero modelling, global coal demand drops by a quarter from 1,700 million tonnes in 2020 to 1,300 million tonnes in 2030 and by 80% to 340 million tonnes in 2050. Among major importers, China, Japan and South Korea have already announced goals to reach net zero by 2060 (China) and 2050 (Japan, South Korea). This indicates an inevitable reduction in consumption of seaborne coal.
