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High Demand for Coal: How Are India and China's Clean Energy Commitments?


India dan China (REUTERS/Damir Sagolj/File Photo)
India and China (REUTERS/Damir Sagolj/File Photo)

India and China's Coal

India and China, two of the world's largest economies and energy consumers, are set to maintain a robust demand for coal despite their ambitious renewable energy targets. This trend, driven by economic growth, positions both nations as key players in the global coal market. Despite strides towards renewable energy, the International Energy Agency (IEA) projects a significant surge in coal consumption in both countries by 2025.

 

China's Growing Appetite for Coal

As the world's largest energy consumer, China's coal consumption is anticipated to rise by a third by 2025, according to the IEA. This marks a substantial increase from the levels recorded 2015 when coal consumption accounted for only a quarter of the country's energy consumption. Notably, China's coal production witnessed a 2.9% growth from January to November 2023 compared to the same period in 2022, underscoring the nation's reliance on this fossil fuel.

 

India's Economic Expansion and Rising Energy Demand

India, currently ranked third globally in energy consumption, is also poised to contribute to the sustained demand for coal. The rapid growth of India's economy is expected to drive an increased demand for coal, oil, and natural gas. Analysts predict that global coal demand will persist if India and China maintain their economic growth in the coming decade.

 

Global Coal Consumption Hits Record High

Recent data from the IEA reveals that global coal usage is projected to reach an all-time high in 2023, surpassing 8.5 billion tons for the first time. The demand, predominantly led by developing countries such as India, China, and Southeast Asia, underscores the continued significance of coal in the global energy landscape.

 

Contrasting Trends in the United States

In contrast to the upward trajectory in China and India, the United States is witnessing a decline in coal consumption. The Institute for Energy Economics and Financial Analysis reports a 62% decrease in daily coal consumption from 2.8 million to 1.1 million tons. This shift highlights varying global patterns in energy consumption and the growing divergence in reliance on coal.

 

Emission Challenges Persist

Despite China and India adopting aggressive renewable energy targets, carbon emissions are expected to rise due to their substantial coal consumption. The focus on reducing emissions hinges on these two nations, as they remain pivotal in the global coal landscape. Ron Thummel, Managing Director of Tortoise Capital, emphasizes the significance of addressing emissions in China and India to achieve global environmental goals.

 

Renewable Energy Targets Amidst Coal Dependency

India, for instance, has set an aspirational target to derive 50% of its electricity from renewable sources by 2030. However, the reality remains that 75% of India's electricity is currently generated from coal-fired power plants, showcasing the challenges in transitioning to a cleaner energy mix. Similarly, while leading in renewable energy expansion, China still relies on coal for 61% of its power generation.

 

Conclusion

Despite ambitious renewable energy goals, India and China's continued reliance on coal underscores the complexities of transitioning to cleaner energy sources. While both nations are making strides in renewable energy, the challenges of energy reliability and the sheer scale of their economies make coal an indispensable fallback. Balancing economic growth, energy demands, and environmental sustainability remains a delicate task for these global powerhouses.

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