The coal industry is passing through tough times.
Demand for coal from big industrial consumers is gradually diminishing. More and more generating companies are shifting away from coal to other more environmentally clean sources of energy.
And what is more, many big industrial countries have announced that they are abandoning coal completely in the medium term.
Against this background, world coal prices are declining, as are investments in developing coal deposits.
“Demand for coal – and supply and price – are expected to drop in the long run worldwide. But a short-term rebound (after the pandemic) could be expected in the coal market,” said Zhangxing Chen, a professor at the University of Calgary and Director of the Global Initiative in Research on Unconventional Oil and Gas.
Chen said there were three main reasons leading to the coal market downturn.
“Environmental concerns to reduce the CO2 emissions from coal-fired plants, declining coal usage in the power sector due to renewables expansion and a cheap natural gas price,” he said.
He also cited: “China’s reduced future coal demand and consumption and policies that phase out coal to achieve carbon neutralities. By 2030, global coal demand is projected to decrease by about 400 million tonnes of coal equivalent compared to 2019. Coal demand in 2030 will be nearly 45% lower than in 2019.”
Shifting eastward
Countries in the Asia-Pacific region remainthe focal point of growth in coal consumption. The climate agenda is less important here than boosting production efficiency. In Asia’s energy balance, coal will continue to play a considerable role as a chief and available source requiring no further processing.
“There is no doubt that global trends have influenced the development of energy in recent years. Intensified competition, increased capacity for renewable energy sources, hydrogen energy and serious steps towards climate restrictions in terms of using fossil fuels,” said Zinfer Ismagilov, an academician of the Russian Academy of Sciences and head of the Federal Coal and Coal Chemistry research centre of the Academy’s Siberian branch.
“And world coal markets are shifting to the East. Right now, Asia-Pacific countries account for nearly 80 % of trade in coal. Demand for coal in this region has risen by a factor of 3.7 times since 1990 to 5.5 billion tonnes. Consumption in Europe declined 38 % to 830 million tonnes.”
But even a shift of world markets eastward cannot guarantee 100 % the salvation of the sector. Industrialised Asian countries will gradually follow the United States and Europe in a transition to cleaner energy technology, which presupposes a slow but inexorable shift away from coal.
“China may achieve its coal usage peak around 2025 and India would be the only country with increasing coal demand in the next decade,” Chen said.
New technologies – new future
A renaissance of the coal sector is possible through the introduction of new technologies for processing, cleaning and use.
Professor Chen said there were five potential areas of growth:
- Technologies like hydraulic fracturing to improve the CBM (coalbed methane) production
- the CO2 capture, utilisation and sequestration (CCUS) technologies that can reduce CO2emissions from coal combustion and could lead coal back to the dominating position in the energy industry;
- the coal-to-liquid and coal-to-gas fuel conversion technologies that can also have potential to improve fuel efficiency and reduce CO2 emissions.
- policy, regulations and financial instruments that can improve the market structure;
- the upstream mining direction is shifted from thermal coal to metallurgical (coking) coal.
“The CO2 capture, utilisation and sequestration (CCUS) technologies are urgently needed for the coal industry and are able to make coal much more competitive in the energy market,” Chen said.
“In addition, the Internet of Things (IOT), big data analytics, artificial intelligence (AI) and automation technologies can reduce operational costs and improve the safety concerns and production efficiency in coal operations.”
Capturing that CO2
“The most promising trend in development in the near future will be improving and mastering new ways of using coal in the processes of gasification, production of synthetic gas and production of chemicals – in Asia-Pacific countries and in other regions,” Ismagilov said.
“Of particular interest are forecasts of wide-scale use of coal to produce hydrogen for the fast-developing hydrogen energy industry.”
Developing technology to produce hydrogen from coal will require the creation of a system of capturing and storing CO2. Coal-fired stations currently account for 37 % of global CO2 emissions and 72 % of all greenhouse gases in the power generating sector.
“The technology to capture CO2 from a post-combustion pathway is mature and commercially viable in most cases. A successful introduction of CO2 capture technologies can reduce up to 10 gigatonnes of CO2 (directly from coal power plants) emissions annually (about one-third of the total CO2 emissions) according to the 2018 stats,” Chen said.
“The direct air capture technology can also be used everywhere, but its cost is really high and capture efficiency is relatively low. The captured CO2 can be stored in geological formations (e.g., depleted oil and gas reservoirs), used for enhanced oil and gas recovery…and converted to other products through chemical processes (like jet fuel).”
Academician Ismagilov sees seven modern technologies that can be used to reduce CO2 emissions when burning coal:
- Subcritical steam parameters
- Supercritical steam parameters (SSP)
- Ultra supercritical steam parameters (USSP)
- USSP technologies
- Integrated Gasification Combined Cycle (IGCC)
- Integrated Combined Gasification for fuel elements
- Integrated gasification combined cycle (IGCC) plant with carbon capture, processing and storage of CO2
“According to the data, the first six technologies allow for a reduction of initial CO2 emissions of 1,000 g to 600 g per kWh,” Ismagilov said. ”Only with the technology of capture, processing and storage of CO2 was a reduction to 100 g/kWh made possible.”
Moreover, the CO2 can be used in industry – and that can partly reduce costs on capture and storage.
“After capture and concentration, the CO2 can be used as an initial reagent in the production of many chemical products. At this time, the annual volume of its industrial use totals only 0.5 % of the overall volume of annual anthropogenic emissions of 24 gigatonnes of CO2,” Ismagilov said.
“The general procedure followed for the chemical disposal of CO2 is its catalytic conversion into products with a high added value. At this time, processes have been put into place for multi-tonne production of urea, salicylic acid, ethylene carbonate and methanol.”
“Using CO2 to produce formic acid and dimethyl ether can be a way of storing chemical energy. They can act as hydrogen carrier molecules in the storage of renewable energy. Dimethyl ether is used as an alternative to diesel fuel. The carbon conversion of methane allows for the disposal of two greenhouse gases and also for production of synthetic gas – which can be subsequently converted into synthetic fuel. In addition, synthetic polymers are an important strategy to pursue in using CO2.”
The trend to carbon chemistry
Another new aspect of developing the coal industry could be carbon chemistry which, for the moment, is at an embryonic stage.
“Carbon chemistry has become popular since the 2015 Paris agreement was introduced,” Chen said. “Its studies have been very limited and are still in their early stages.”
At this time, the most current application of carbon chemistry technology is the production of hydrogen by gasification of coal, needle coke, carbon fibre, special types of graphite, dense grades of jet fuel, flame retardant turbine oil, sorbents, humic substances and waxes.
But widespread introduction of such technologies and industrial application requires stimulatory measures from governments. That is already happening in China.
“In China, many coal companies have created successful carbon chemical companies,” Ismagilov said. “Carbon chemistry accounts for about 6 % of the structures of coal consumption in the country.”
Many technologies with carbon chemistry, he said, could become a key factor, with government support, in developing the sector.
