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The world’s addiction to coal, a fuel many thought would soon be on the way out, is now stronger than ever.
Demand has been on the rise since last year amid a natural gas shortage and as electricity use surged after pandemic restrictions were rolled back. But Russia’s invasion of Ukraine turbocharged the coal market, setting off a domino effect that’s leaving power producers scrambling for supply and pushing prices to record levels.
The boom in the world’s dirtiest fossil fuel has huge implications for the global economy.
The higher prices will continue to feed into rising inflation. But even with the recent surge, analysts say that coal is still one of the relatively cheapest fuels. That’s making it more critical for power supplies at a time when coal burning also remains the biggest single obstacle in the battle against climate change. Meanwhile, miners are struggling to dig up any additional tons as utilities around the world keep demanding more, setting the stage for the next phase of the global energy crisis.
“When you’re trying to balance decarbonization and energy security, everyone knows which one wins: Keeping the lights on,” said Steve Hulton, senior vice president for coal markets at market-research company Rystad Energy in Sydney. “That’s what keeps people in power, and stops people from rioting in the streets.”
In 2021, the world generated more electricity from coal than ever before, with an increase of 9% from the previous year, according to the International Energy Agency. For 2022, total coal consumption — for generating power, making steel and other industrial uses — is expected to rise by almost 2% to a record of just above 8 billion metric tons and remain there through at least 2024.
“All evidence indicates a widening gap between political ambitions and targets on one side and the realities of the current energy system on the other,” the IEA said, estimating that carbon-dioxide emissions from coal in 2024 will be at least 3 billion tons higher than in a scenario reaching net-zero by 2050.
Read more: The future of energy may require sacrifice
Coal’s story is inextricably linked with natural gas, often promoted as the cleaner-burning alternative.
Europe’s Energy Crisis and the Coal Comeback
As the world began to emerge from the pandemic in mid-2021, power demand surged as stores and factories reopened. But Europe, which had been leading the global charge away from coal, faced an unprecedented crunch for electricity and a shortage of natural gas. At the same time,…
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