Coal Communications Kit - International Trade
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International Trade

Coal represented 30 percent of world energy consumption in 2014, making it the second largest of all energy sources. Population growth and increases in income per capita are the key drivers behind growing world demand for energy. By 2035, the world’s population is projected to reach 8.7 billion, meaning an additional 1.6 billion people will need energy (BP, 2015). Most countries are not energy self-sufficient, and therefore international trade will play an increasingly important role in world energy economics.

By 2040, the global coal trade will grow by 40 percent, due mainly to rising coal imports in China and India. This will increase the share of global coal trade relative to world coal demand from 18 percent in 2012, to 23 percent by 2040 (Umbach, 2010). A map depicting global coal imports and exports, as well as coal price, is pictured below:

Global Coal Movement

In the long-term, not only is global coal trade expected to be higher, but also total world energy demand is projected to be 37 percent higher than present day in 2035. Not surprisingly, India and China will account for half of that growth. Coal demand growth in China and India combined is larger than global growth, more than making up for declines in the rest of the world. Jointly, they will account for 66 percent of total coal demand in 2035.

The United States on the other hand, is projected to become energy self-sufficient by 2021, and by 2035, it could be exporting 9 percent of its total energy supply. Meanwhile, China is projected to overtake the EU as the world’s largest importing country/region by 2025 (BP, 2015). Although China is facing some internal energy struggles with new quality requirements and import duties on coal, their immense coal consumption cannot be replaced entirely by gas or renewables. Therefore, it is expected that China will continue to see coal as the major energy source for the foreseeable future. India will follow suit as import levels are expected to more than triple to 30 percent of global coal trade. India’s coal import dependence will rise sharply from 25 percent in 2012, to 40 percent by 2040 (Umbach, 2010).

Major Importers and Exporters of Coal

Global coal production in 2014 was little changed at 7.2 billion tons. Of that 7.2 billion tons, about 1.3 billion is traded all over the world, shipped great distances by sea to reach global markets (Euracoal, 2015). Over the last twenty years, Seaborne trade in steam coal has increased on average by about 7 percent each year, and Seaborne coking coal trade has increased by 1.6 percent a year, as can be seen in the chart below:

Global Seaborne Trade

 Almost 20 percent of total coal production is internationally traded. The top five coal importers (China, Japan, Korea, India, and Taiwan) are in Asia, while the top five exporters (Indonesia, Australia, Russia, the United States and Colombia) are more scattered around the globe. The new coal trade trend has led to massive investments in coal infrastructure to secure imports and exports (International Energy Agency, 2015). The table below depicts major importers and exporters of coal by country, in million tonnes:

International Trade Rate Slowing

International trade is slowing and steam coal prices are declining, this is due to three major causes (Euracoal, 2015):






















South Korea



United States












South Africa










  1. Decrease in price – A result of over capacity due to lower demand. This is a consequence of slowing GDP growth rates in Asia, especially in China, but also due to the weak global economic situations.
  2. Change in exchange rates - Mining companies in Russia, Colombia, Australia and South Africa have a currency advantage, which enables them to mitigate the lower revenues due to lower coal prices. The dollar (USD) has strengthened significantly against the euro (EUR) as well in the last 13 months (+21.8 percent), and also against the Russian ruble (RUB), creating further price advantages for Russian coal exporters to Europe.
  3. Freight rates have decreased – Freight rates have decreased by as much as 50 percent, slumping to $5-7 USD on the benchmark Richards Bay-Rotterdam route, adding to lower coal prices at ports such as ARA.

These developments will continue in the mid-term. Longer term, it is important that the focus on improved coal technologies continues in order to recognize increased consumption in the Asian market, while mitigating air quality concerns.


In order for everyone to benefit from coal as a sustainable, reliable, and affordable energy source, international trade is necessary to reach all markets. Traditionally coal was (and still can be) a somewhat local resource. However, this isn’t true for all countries. China in particular has a growing need for coal in order to sustain its economic development. This has led to acceleration in growth (both volume and share terms) of internationally traded coal. In fact, all developments in China impact coal markets. However, the fight against pollution is now a driving force of energy policy, and Asian countries are following suit. China will continue to be the biggest consumer and importer of coal in the mid- to long-term future, as it has become their source of reliable energy supporting their industrial and social prosperity. However, to ensure coal can still be the dependable energy source of the future in China, the coal industry needs to continue developing and improving clean coal technology, as this will allow them to continue lighting the way for developing countries while complying with environmental regulations.

International Trade: Facebook Post

International coal trade allows humans to share technologies and master new environments where little to no energy sources are present. Coal also improves living standards for both developed and developing countries by providing abundant, affordable, reliable, and increasingly clean electricity to power human lives.

International Trade: Elevator Speech

Most countries are not energy self-sufficient, meaning the international coal trade is playing an increasingly significant role in providing energy to developing countries. The share of coal in the world energy supply increased from 25 percent in 1973, to almost 30 percent in 2014. By 2040, global coal trade is expected to grow by 40 percent, due mainly to rising coal imports in China and India. Traditionally coal has been a local resource, but China's growing need for coal to sustain its rapid economic development has led to acceleration in growth of internationally traded coal. The top five coal importers (China, Japan, Korea, India, and Taiwan) are in Asia, while the top five exporters (Indonesia, Australia, Russia, the United States and Colombia) are scattered around the globe. Global exports totaled 1,300 megatons (MT) in 2013, more than seven times the 185 MT amount 40 years earlier. The growing coal trade trend has led to massive investments in coal infrastructure to secure imports and exports. China and other developing countries in Asia will be the biggest consumers and importers of coal in the mid- to long-term future. The coal industry has shown a willingness to adapt to regulations with technologies such as scrubbers and low NOx burners, and will continue to adapt to carry on providing reliable energy to nations that need it.

International Trade: Objections and Responses

Objection: Renewables and alternative energy resources will be available to replace coal generation going forward on a global scale.
Response: Coal is used in many applications where renewables and alternative energies do not (or cannot) play a significant role: power generation, steel production; cement manufacturing, alumina refineries, paper production, chemical and pharmaceutical industries, etc. In addition, many countries do not have renewable energy resources sufficient to cover their energy needs, and therefore need to import energy to help meet their requirements. In China, for example, economic growth needs more energy than their domestic energy options can supply. Diversification efforts and the so-called everything but coal policy, will lead to big developments of hydropower, wind, photovoltaic (PV), nuclear, and gas use (Citi: World Moving to "Everything but Coal", 2014). However, investments in new coal generation capacity and coal gasification plants will also be needed to support this growth. This is why both coal and international trade are important to keep world economies running (International Energy Agency, 2015).

Objection:Although coal continues to be an important part of the energy mix, it is not a clean energy that should be shipped around the world for unregulated use. Shipping coal requires further energy consumption and creates additional pollution.
Response: Maritime shipping is the world's most carbon-efficient form of transporting goods - far more efficient than road or air transport. Yet, the industry seeks to further improve the fuel efficiency and carbon footprint of its vessels. Today's container ships and vehicle carriers enable the movement of tremendous volumes of goods across the world. This movement of energy and goods has fueled global economic growth in a manner considered implausible only 50 or 60 years ago (World Shipping Council, 2015).