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17th December 2022 (7 Topics)

Global coal consumption to reach all-time high this year: IEA

Context

As per the report by the International Energy Agency (IEA), Global coal consumption is rising and it urges for stronger efforts to move for a low-carbon economy.

International Energy Agency (IEA):

  • The International Energy Agency is an autonomous Intergovernmental Organisation.
  • The IEA was established in 1974 by developed countries - under the auspices of the Organization for Economic Co-operation and Development (OECD) - in response to the oil embargo.
  • IEA is made up of 30 member countries and eight associate nations. Four countries are seeking accession to full membership - Chile, Colombia, Israel and Lithuania.
  • India became an Associate member of IEA in March 2017 but it was in engagement with IEA long before its association with the organization.

Key highlights of the report:

  • Global coal use is set to rise by 1.2% this year, exceeding 8 billion tonnes in a single year for the first time and a previous record set in 2013.
  • The coal consumption will remain flat at that level until 2025 as falls in mature markets are offset by continued strong demand in emerging Asian economies.
  • For most economies, coal will continue to be the global energy system’s largest single source of carbon dioxide emissions by far.
  • The largest increase in coal demand is expected to be in India at 7%, followed by the European Union at 6% and China at 0.4%.

The three largest coal producers are China, India and Indonesia.

Reasons for the increase in Coal consumption:

  • Due to disruption in supply chains: High gas prices following Russia’s invasion of Ukraine and consequent disruptions to supply have led some countries to turn to relatively cheaper coal.
  • Increase in energy demands: Heat waves and droughts in some regions have also driven up electricity demand and reduced hydropower, while nuclear generation has also been very weak, especially in Europe, where France had to shut down nuclear reactors for maintenance.
  • The high price of other alternatives: Europe’s coal demand has risen due to more switching from gas to coal due to high gas prices and as Russian gas has reduced to a trickle.

Concerns highlighted:

  • Even though there is an increase in coal consumption and production, but there is no growth in the investments following the sector. This will make the investor and mining industries vulnerable in India.

Coal production in India:

  • Agency involved: Coal India Limited (CIL) the state-owned coal mining corporate came into being in November 1975.
  • With a modest production of 79 Million Tonnes (MTs) at the year of its inception CIL, today is the single largest coal producer in the world and one of the largest corporate employers.
  • Indian Institute of Coal Management (IICM) as a state-of-the-art Management Training ‘Centre of Excellence’, the largest Corporate Training Institute in India operates under CIL and conducts multi-disciplinary programmes.
  • CIL is a Maharatna company that is a privileged status conferred by the Government of India to select state-owned enterprises in order to empower them to expand their operations and emerge as global giants.

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