Asian Nations Increase Coal Consumption as the U.S. Turns Away

Authored by Vijay Jayaraj via RealClear Wire

Asian countries, including Vietnam, are increasing their reliance on coal. This comes as no surprise considering the growing industrial sector in these nations and their need for energy. Despite previous commitments made at international climate conferences to reduce carbon dioxide emissions from fossil fuels, these countries are choosing to prioritize their energy needs.

Vietnam's Industrial Growth and Energy Needs

Vietnam's projected GDP growth rate for 2024 is 5.8%, making it the sixth highest in Asia. The industrial sector, particularly manufacturing, contributes significantly to this GDP growth. S&P Global has observed considerable improvement in Vietnam's manufacturing sector in the fourth quarter of 2023 and expects this positive trend to continue in 2024.

Electricity, a large portion of which is produced by coal, is crucial for manufacturing operations in Vietnam. In 2023, coal accounted for more than 40% of all electricity produced in the country, with hydro reserves contributing around 30% and natural gas about 10%. However, 2024 is expected to see a decrease in hydroelectric generation due to less rainfall and complications in electricity production with natural gas due to higher gas prices. As a result, Vietnam is looking to coal to meet its energy needs.

Coal Resurgence Across Asia

Similar patterns are being observed across Asia, with a resurgence in coal use due to rapid economic growth. China, the world's largest coal consumer, saw an increase in consumption in 2024. Reports earlier this year showed the construction of dozens of new coal plants in China. In 2023, China accounted for 95% of the construction of the world's new coal power plants. India, another major player in the Asian energy market, also saw an increase in coal imports and production. Indonesia and Japan are also significant consumers of coal.

Interestingly, while these Asian countries are increasing their reliance on coal, the U.S. is moving away from it. Despite this, U.S. miners can still meet the growing Asian demand for coal. This is due to the growth of U.S. metallurgical coal exports fueled by Asian demand over the past few years. New mines such as Arch Resource's Leer South and the AMCI, POSCO, and Itochu-led Allegheny Met's Longview mine will play a role in meeting this demand from Asia.

U.S. Rejects Coal as Asian Nations Embrace It

It is quite astonishing to see the U.S. industry advancing emission-reduction targets and restrictions on the export capacity of natural gas by the Biden administration, while various Asian nations are expanding their fossil fuel capacity. This could potentially lead to a decline in the quality of life for millions of Americans for zero environmental benefits, while Asians see improvements in their quality of life.

Vijay Jayaraj is a Research Associate at the CO2 Coalition, Arlington, Virginia. He holds a master’s degree in environmental sciences from the University of East Anglia, U.K.

Article by Tyler Durden, Sat, 05/11/2024 - 02:45

What's Your Take?

This article presents an interesting perspective on the global energy landscape and the differing approaches of the U.S. and Asian nations. What are your thoughts on this matter? Do you think the U.S. should reconsider its stance on coal, or should Asian nations prioritize emission reductions over energy needs? Share this article with your friends and start a conversation. Don't forget to sign up for the Daily Briefing, which is delivered to your inbox every day at 6pm.