Coal Prices Hit a Decade High, Despite Environmental Efforts
June 28, 2021
Coal has risen to the highest price in a decade, despite pledges from governments around the world to reduce carbon emissions. The Wall Street Journal attributes the soaring prices to the rebounding global economy, exacerbated by a shortfall in natural gas, a mine closure in Colombia, flooding in key mining areas in Australia and Indonesia, and supply chain disruptions caused by a Chinese ban on Australian coal. All of which have caused prices for thermal coal, the kind used by power plants, to more than double in the last year.
Prices for coal delivered to northwestern Europe have hit the highest level since 2011, climbing 64% this year alone. Coal price benchmarks have outpaced the gains seen in other commodity markets like oil and copper.
The WSJ notes that the surge in prices is a reminder that efforts to move away from coal-burning plants in hopes of lowering carbon emissions. They go on to cite analysts who expressed surprise that the demand for coal is growing even as Europe’s carbon offset markets are setting all-time highs.
Despite the surge in prices, the WSJ notes that coal producers’ long-term prospects remain gloomy. According to International Energy Agency projections, worldwide demand for coal peaked in 2014 and is unlikely to return to pre-pandemic levels.