China has removed all remaining curbs on Australian coal imports, putting an end to trade restrictions that have been in place since 2020.
China has started buying Australian coal this month, signaling the end of an unofficial ban that ran for over two years, according to market sources and S&P Global Commodity Insights data.
China Buys More Australian Coal as Appetite for Quality Builds. Australian coal continues to make inroads among Chinese buyers, adding to pressure on domestic prices, with new shipments climbing to their highest level since Beijing halted imports in the fall of 2020.
China ends ban on Australian coal, WSJ reports | Reuters.
China is in no rush to buy thermal coal from Australia even after lifting the import ban, as the former still has enough options globally to meet its requirements, particularly for medium calorific value fuel, a senior analyst from the International Energy Agency told S&P Global Commodity Insights.
China will allow all domestic companies to import Australian coal, signaling an end to trade restrictions imposed in late 2020.
“If Australia today said we are not going to export any more coal, what you'd see is a lot of jobs lost, you would see a significant loss to our economy, significantly less taxation, revenue for education, health and other services, and that coal wouldn't lead to a reduction in global emissions, what you would see is a ...
Companies are planning to invest in wind, solar and hydro energy to replace coal, but market participants are unsure of how energy companies and consumers will absorb the cost of this transition and investment.
Ending thermal coal in Australia would be easy
Given a modest amount of political will, or just the end of obstructionism from the federal government, Australia could easily replace coal-fired electricity generation with a combination of solar and wind, backed by storage.
In recent weeks it has likely made economic sense for China to buy Australian 5,500 kcal/kg coal as it is competitively priced against domestic supplies.
China has been Australia's top consumer of iron ore for decades, accounting for 80 per cent of our exports of the mineral in 2021. Export revenue has delivered long-standing profits to Australian miners and boosted the country's tax revenue.
Loy Yang Mine
It is owned by AGL Energy and produced an estimated 20.83 million tonnes of coal in 2022. The mine will operate until 2048.
Australia has been traditionally the largest coking coal supplier to China. Before an unofficial ban on Australian coking coal, imports from the country accounted for 48.4% of China's total with a volume of 34.97 million mt in 2020, China customs data showed.
According to the researchers, in normal years about a quarter of both Australia's thermal and coking coal exports are destined for China.
Since 1985, the government has directed expenditures toward expanding the energy supply, which reduced efficiency expenditures from 10% to 6% of total investment. Alternatives are natural gas or solar, wind, biomass, and geothermal energy.
Minister for Resources and Water, Keith Pitt, says coal will remain a significant contributor to the Australian economy well beyond 2030 as global demand continues to grow.
Coal Reserves in Australia
Australia has proven reserves equivalent to 1,231.3 times its annual consumption. This means it has about 1,231 years of Coal left (at current consumption levels and excluding unproven reserves).
Although the government has agreed to reach net zero emissions by 2050, the Australian Energy Market Operator (AEMO) says coal-fired power plants are likely to shut much earlier than expected, which means the main electricity grid could become coal-free by 2040.
Australia is the fifth largest producer, the second largest exporter and has the third largest reserves of coal in the world.
The claim: Prime Minister Malcolm Turnbull says Australia exports "by and large" cleaner coal than other countries. The verdict: Experts say Australian export coal is of a higher quality on average compared with other countries, meaning less is needed to generate the same amount of energy.
Due to untimely domestic shortages, many Australian power generators were forced to secure oil and gas on spot markets, sending production costs skyrocketing. Domestic gas prices spiked to such high levels that AEMO intervened to cap prices at A$40 per gigajoule (GJ).
Coal is remarkably rare
You need enormous volumes of woody plant matter being deposited into a swamp, river or shallow marine environment. Australia's Glossopteris trees were uniquely adapted to grow prolifically in swamps and rivers, so they were the perfect coal ingredient.
In 2021, Indonesia and Russia became China's biggest coal suppliers.