Japanese fossil fuel cuts no mortal wound for sector

Australia's thermal coal exports are likely to continue to grow out to 2030, despite concerns over a Japanese plan to slash the use of fossil fuels, according to Commodity Insights director Mark Gresswell. And while some parties were quick the jump on the news as another nail in the coffin for coal, Mr Gresswell said the data showed a different picture. "People have been predicting the end of coal for the last 15 years and the (seaborne trade) market volumes have grown every year except two," he said. "Our forecasts remain bullish in terms of volumes...and we're seeing thermal coal prices at a record high now, at $US150 a tonne, so to me that's not a sign of decline." Under the draft Strategic Energy Plan released last week Japan forecast that non-fossil fuel power supply sources would account for roughly 60 per cent of the country's energy mix in fiscal 2030-31. The LNG share in the energy mix would be around 20 per cent, coal 19 per cent and oil 2 per cent under that outlook compared with 37 per cent for LNG, 32 per cent coal and 7 per cent oil in FY 2019-20. In a report prepared for the Minerals Council of Australia late last year, Commodity Insights found that Asian thermal coal imports were expected to grow by more than 270 million tonnes to 1.1 billion tonnes per annum by 2030. If the Japanese strategy - still in draft form - was implemented, the forecast demand for Australian thermal coal may be less than previously factored, but it was still expected to remain on a growth trajectory, Mr Gresswell said. "The work we've done shows that while some of the developed countries are reducing their requirements for coal, the developing world - particularly in Asia, so India, China and South-East Asia - will have a much greater requirement for thermal coal," he said. "We forecast growth for 2030 and beyond for global demand." Queensland Resources Council chief executive Ian Macfarlane said that, given the high quality of Queensland thermal coal, any shortfall in demand from existing customers was likely to be snapped by in global markets. At a statewide level for 2019-20, Queensland exported 38,255,736 tonnes of coal to Japan, or just under 18 per cent of all coal exports, with the majority of those being metallurgical coal rather than thermal coal. And while Australia in general is a major LNG exporter to Japan, that country is not significant customer of Queensland's Gladstone-based LNG plants. Gladstone Ports Corporation data shows the east coast projects shipped 1.16 Mt to China in June, 0.29 Mt to Korea (0.23 Mt), 0.07 Mt to Japan (0.06 Mt) and 0.06 Mt to Singapore (0.14 Mt). East coast projects also shipped 0.19 Mt to Malaysia and 0.07 Mt to India in June.

Japanese fossil fuel cuts no mortal wound for sector

Industry Queensland

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