The future of coal investment, trade, and stranded assets
File(s)
Accepted version
Author(s)
Auger, Thomas
Truby, Johannes
Balcombe, Paul
Staffell, Iain
Type
Journal Article
Abstract
Coal is at a crossroads, with divestment and phase-out in the West countered by the surging growth throughout Asia. Global energy scenarios suggest that coal consumption could halve over the next decade, but the business and geopolitical implications of this profound shift remain underexplored. We investigate coal markets to 2040 using a perfect competition techno-economic model. In a well-below-2°C scenario, Europe, North America, and Australia suffer from over-capacity, with one-third of today’s mines becoming stranded assets. New mines are needed to offset retirements, but a new commodity cycle in the 2030s can be avoided. Coal prices decline as only the most competitive mines survive, and trade volumes fall to give more insular national markets. Regions stand to gain or lose tens of billions of dollars per year from reducing import bills or export revenues. Understanding and preparing for these changes could ease the transition away from coal following 150 years of dominance.
Date Issued
2021-06-16
Date Acceptance
2021-05-12
Citation
Joule, 2021, 5 (6), pp.1462-1484
ISSN
2542-4351
Publisher
Elsevier
Start Page
1462
End Page
1484
Journal / Book Title
Joule
Volume
5
Issue
6
Copyright Statement
© 2021 Elsevier Ltd. All rights reserved. This manuscript is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence http://creativecommons.org/licenses/by-nc-nd/4.0/
Sponsor
Engineering & Physical Science Research Council (EPSRC)
Identifier
http://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcApp=PARTNER_APP&SrcAuth=LinksAMR&KeyUT=WOS:000663028600014&DestLinkType=FullRecord&DestApp=ALL_WOS&UsrCustomerID=1ba7043ffcc86c417c072aa74d649202
Grant Number
EP/R045518/1
Subjects
Science & Technology
Physical Sciences
Technology
Chemistry, Physical
Energy & Fuels
Materials Science, Multidisciplinary
Chemistry
Materials Science
SPATIALLY SEPARATED MARKETS
PHASE-OUT
EQUILIBRIUM
CLIMATE
EMISSIONS
RESOURCE
IMPACTS
Publication Status
Published
Date Publish Online
2021-06-08