A growing list of countries committing to carbon neutrality could significantly impact on the coal industry in the next 20 years, a new report found.
Virtually all coal mine workers will have no choice but to reskill, if every coal importer across the world commits to net zero emissions by the year 2050. That is the dire prediction of the 2021 Intergenerational Report (IGR) on sensitivity of the New South Wales economic and fiscal outlook to global coal demand and the broader energy transition.
The report claims Japan, South Korea and China – the top three markets for thermal coal – have already committed to go carbon neutral by either 2050 or 2060. When factoring in the falling cost of renewable generation and storage, there will be much lower demand for coal production workers in the coming decades.
“Future coal production is now expected to be considerably weaker than was forecast for the 2016 IGR,” report authors Nick Wood, Maddy Beauman and Philip Adams said.
The trio also expects a jump in demand for electric vehicles will further impact on the coal production workforce.
“This [lower global coal demand and higher electric vehicles uptake] scenario extends the assumptions underlying the lower global coal demand scenario by incorporating faster uptake of electric vehicles,” they said.
‘Limited window of opportunity’
The Imperial College of London Centre for Environmental Policy believes coal producers should spend the next two decades retraining their workforce.
“Businesses have a limited window of opportunity to get out in front of the sweeping changes that face the coal industry. We must build the human and financial resilience so that workers do not lose out, and make the transition to a coal-free world easier,” lead researcher Iain Staffell said in a public statement.
Opportunities will remain
However, Wood, Beauman and Adams admit there will always be some demand for coal production.
“This does not necessarily mean that no coal will be used in the future – new coal generators continue to be built and net zero policies allow for offsets,” they said.
They also conceded fully transitioning away from coal production would bring significant losses to the economy as a whole.
“Declining global demand for coal will reduce NSW’s economic growth over the projection period, and will have impacts both on employment and the fiscal outlook,” they said.
“There are also significant economic and fiscal risks in the broader transition in energy generation, specifically a slow and disorderly transition in domestic energy generation would be sufficient to more than offset any benefits from higher global coal demand.”
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