Earth Protect Blog

By Damien Cave

© The New York Times Co.

SYDNEY » China is forcing Australia to confront what many countries are concluding: The coal era is coming to an end.

China officially has blocked coal imports from Australia after months of vague restrictions that dramatically slowed trade and stranded huge ships at sea.

For Australia, the world’s largest coal exporter, the decision is a gut punch that eliminates its second biggest market at a time when many countries are rethinking their dependence on a fossil fuel that accelerates the devastation of climate change.

While Beijing’s motives are difficult to divine, there are hints of mercantilist protection for local producers and the desire to punish Australia for perceived sins that include demanding an inquiry into the source of the coronavirus. China’s commitment to cut emissions also may allow it to be marginally more selective with its vast purchases.

Whatever the reasoning, the impact is shaping up to be profound for a country that has tied its fate to coal for more than 200 years. Mining policy can decide elections in Australia, and the current conservative government is determined to do the bare minimum on climate change, which has made China’s coal cutback a symbolic, cultural and economic shock.

“A transition has been forced upon us,” said Richie Merzian, the climate and energy program director at the Australia Institute, an independent think tank. “It’s hard to see how things will really pick up from here.”

The realization, if it holds, may take time to sink in.

Prime Minister Scott Morrison has ridden Australia’s traditional reliance on fossil fuels into power. He famously held up a hunk of coal in Parliament in 2017, declaring “don’t be scared,” and first became prime minister in an intra-party coup after his predecessor, Malcolm Turnbull, tried to pursue a more aggressive approach to combating climate change.

“Coal-Mo,” as some of his critics call him, dismissed concerns Wednesday about China’s ban, arguing that there are many other countries still lining up for the product.

“I should stress one point, that our biggest coal exporting country, the country that takes our exports largest on coal are actually Japan and India,” he said. “So China is not our major importer when it comes to thermal or metallurgical coal.”

While Japan accounted for 27% of Australia’s $50 billion of coal exports last year, China was not far behind at 21%. India was third at 16%.

Morrison’s faith in coal is hardly unique. The combustible rock is a most Australian product. It was discovered on the continent in 1797, less than a decade after the first British settlers arrived. Since then, entire communities have been built around not just mines but also sprawling ports where cargo ships lug mountains of coal all over the world.

It is not a huge job producer. Only about 50,000 people worked in coal mining last year in Australia. (Plumbers clocked in at around 80,000.) But it is a huge moneymaker. Coal production in Australia has more than doubled over the past three decades, with the share that is exported jumping to 75% in fiscal 2017, up from 55% in 1990.

Coal royalties for one state alone, Queensland, approached $4 billion last year.

And in many areas, from the Hunter Valley a few hours outside Sydney, to Mackay near the Great Barrier Reef, coal has long been a constant. It’s what you see on trains and at sea. It’s what put Australia on the global map. For many, it’s what inspires nationalist pride.

The stocks of Australian coal companies collapsed this week after the news from China hit the markets.

China, in many ways, is simply the face of a more significant global disruption.

Japan announced this year that it would retire about 100 of its most inefficient coal plants and invest in renewable energy. The country’s new prime minister announced in October that it would be carbonneutral by 2050.

South Korea and Taiwan, two other buyers in Australia’s top five, also announced sharper targets for emission reduction, which most likely would mean less coal.

“It’s not market forces; it’s politics all the way down,” said Robyn Eckersley, a political scientist at the University of Melbourne who specializes in climate change. “The politics leads to a drying up of markets.”