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China’s dirty coal consumption declines 40%: Wood Mackenzie

Chinese consumption of sanmei, also known as dirty coal, for heating has dropped 40% over the past six years, to 469 million tons (MMt) from 774 MMt in 2012, Kallanish Energy learns from consultancy firm Wood Mackenzie.

The decline is mostly explained by the installation of several government measures targeted at reducing air pollution in China, which have been implemented since 2013. Sanmei is a lower quality variety of raw coal burned using technology incapable of reducing pollution.

Its high usage in China’s traditional manufacturing economy has compromised the country’s air quality for decades, experts say.

Wood Mackenzie’s analysts estimated the downward trend in the use of sanmei by the industrial sector will continue in the long run. Forecasts include a decline from 650 MMt in 2012, to 191 MMt in 2025 and to 100 MMt in 2035.

This is because China’s economy is slowly shifting towards the service sector, instead of manufacturing. Industry is thus using less thermal coal and, particularly sanmei. Other factors pushing the decline is the government’s commitment to reducing carbon emissions and meeting its Paris Agreement goals.

“As a priority of the government’s efforts to reduce sanmei use, many small, inefficient factories have been closed,” Wood Mackenzie said, in an email Tuesday. “For example, Beijing closed 1,341 factories between 2013 and 2016, and aims to close an additional 500 in 2017.”

In the medium term, the majority of the sanmei usage cuts is expected to come from switching small boilers to larger boilers equipped with clean technology, not from the coal to gas switch in producing power, due to higher costs, the firm said.

Source: Kallanish Energy