UPDATE 1-German coal buyers see lower imports, prices

* Coal imports and prices fall as steel industry slumps

* Coal industry grapples with carbon polluter image

(adds details from news conference)

By Vera Eckert

DUESSELDORF, Germany, June 17 (Reuters) - German imports of hard coal are likely to fall 22 percent this year compared with 2008 to a total 37.3 million tonnes, the importers group VDKI said on Wednesday.

"We see a significant decline by 22 percent through the steel industry crisis and the likely reduced demand from power generators," said the chairman of VDKI, Erich Schmitz, at the organisation's annual news conference.

Such imports, complementing indigenous supplies and serving power generators and steelmakers, last year totalled 48.0 million tonnes.

Schmitz also said his organisation believed quarterly coal import prices measured by state statistics office BAFA could fall to 65-70 euros ($90.10-97.03) by the end of this year, 18.7 percent below 83 euros at the end of March.

The use of steam coal for power plants and coking coal and coke for steelmaking by Germany's export-geared industry slumped early in 2009, falling victim to the financial crisis which has depressed economic activity.

Coal producer countries China, India and Indonesia started investing heavily in new capacity in recent years, and now will have to curb planned growth rates, Schmitz said.

"The market tends towards a buyers market which should pressurise world market prices for steam and coking coal," he said, adding a strong euro against the dollar would also help.

"But world trade in steam coal (in 2009) should stay stable while the coking coal market will shrink by 40 to 50 million or 20 to 25 percent," said Schmitz, citing a comparably slow decline in coal-to-power use as electricity demand is robust.

CO2 WOES

The 69-member VDKI, based in the port of Hamburg but close to the Rhein-Ruhr region's heavy industries which it serves, is worried about the sustainability of coal burning amid public criticism of the carbon dioxide (CO2) pollution it causes.

"We argue against this with the plans for higher energy efficiency rates at coal-fired power units and the hoped-for success in capturing and storing CO2 at power stations (in a tested, but not proven, process called CCS)," said Schmitz.

If newbuilding and CCS efforts were combined and successful, German coal generators may cut CO2 emissions to 96 million tonnes a year by 2015 versus 111 million in 2008, he said.

Germany uses hard coal for 20 to 25 percent of its annual power generation, depending on demand and rival fuels.

It mined 18.5 million tonnes of hard coal equivalent units last year but this may fall to 13-14 million tonnes in 2009 under long-term phase-out plans, according to the VDIK.

Lignite, a cheaply mined domestic brown coal, continues to hold a stable share of another quarter of power supply. (Editing by James Jukwey)