(Repeats story published late Monday; no changes to text)
* Coal share in primary energy demand to fall 3 pct by 2035
* China's coal demand to peak in 2020 - IEA
* GDP growth in emerging markets still linked to coal - AXA
* Falling coal quality, environmental concerns slow growth -
By Henning Gloystein
LONDON, Nov 12 Global coal demand will rise in
the short-term as emerging markets rely on it to power economic
expansion, but its share in primary energy demand will fall by
three percent to under 25 percent by 2035, two reports published
on Monday said.
The International Energy Agency (IEA) said in its World
Energy Outlook that although coal would remain the world's
leading fuel for power generation in the next two decades, its
share would drop, mainly losing out to rising demand for natural
gas and renewables.
"While coal's share of global primary energy demand falls by
nearly three percentage points to less than 25 percent in 2035,
coal remains the second most important fuel behind oil and the
backbone of electricity generation," the report said.
"Global coal demand grows by 0.8 percent per year to 2035,
with growth slowing sharply after 2020 as recently introduced
and planned policies to curb use take effect."
The IEA said that China's coal demand would peak around
2020, by when it would make up half of global coal demand, and
would plateau at that level until 2035.
"By 2025 India overtakes the United States to become the
second largest coal user. By contrast, almost all major OECD
regions see their coal use decline, especially Europe, where
demand in 2035 is 60 percent of the 2010 level," the report
The IEA said that most major coal producers, including China
and the United States, see their production slow or even
"OECD coal output starts to fall around 2020 and is 10
percent lower in 2035 than in 2010, with declines in Europe and
North America offsetting growth in Australia. Non-OECD
production carries on rising through 2035. In China, the world's
biggest producer, rapid output growth slows around 2020,
reaching nearly 20 percent above the 2010 level by 2035."
COAL QUALITY DROPS
Axa Investment Managers said that declining coal quality and
rising environmental awareness will dent coal demand in the
The asset management arm of life insurer Axa said
coal has been the clear winner of the past decade, but warned
that the boom might not last long.
"Coal has a bright future in the short term, but that will
not last long in our view," Axa said in a report also published
"From the standpoint of energy security, coal-fired units
remain a winner thanks to the widespread availability of the
The chief executive of the World Coal Association said that
economic growth and coal markets remained closely linked.
"No one has been able to delink the growth of GDP from the
growth of energy, and coal in particular," association CEO
Milton Catelin told Reuters.
But coal has a competitive edge over fuels such as natural
gas only as long as pollution control regulations are light, Axa
said, adding that environmental awareness was rising fast in
"For the next round of rapidly growing economies, the
incentive bias towards coal will be shorter-lived than expected
(and) stricter pollution controls may render many new
coal-burning installations obsolete," the study said.
"Current air pollution regulations will rapidly prove
insufficient to keep populations and agriculture from suffering
from the social costs associated with coal."
Axa also said growth in the coal sector was threatened by
the falling quality of the mined product.
"The quality of reserves is decreasing. This represents a
major long-term risk," the report said.
The Global Coal Association said, however, a rise in energy
efficiency of new coal-fired power stations could address this
"Coping with degrading quality could actually be a godsend
as it would provide the incentive for much-needed upgrades in
coal-fired power plants," Catelin said.
The Axa report disagreed, warning that efficiency gains
would be limited as a result of the decreasing trend in global
coal supply quality.
Axa also said that carbon capture and storage (CCS)
technology, which would capture CO2 produced from power plants
before it enters the atmosphere and store it underground, would
not be able to improve the environmental footprint of coal-fired
"CCS will not turn coal into a sustainable source of energy
for power generation. The polluting effects of coal are not
limited to CO2 alone. CCS technologies are energy-intensive and
could take decades to mature."
(Reporting by Henning Gloystein; editing by William Hardy)