Impact of Climate Change on Global Coal Production – Emphasis on Indonesia

Posted on December 19, 2011 by

Global production of coal is under the impacts of climate change.  Indonesia, Russia and Australia are the largest exporter of  coal. India is in the line of biggest customers of thermal and metallurgical coal with Japan, China and Korea. Australian coal export is affected by carbon taxes and environmental concerns resulting in Indian and China are turning to Indonesia, South Africa and Russia to supply its coal needs. However the ability of these countries to sustain supply to these countries is questionable. At current production rates Indonesian coal reserves are likely to be depleted in 30 years. The largest reserves of Russian coal are land-locked in central Russia complicating transport logistics. This uncertainty of supply of coal, India could revert to exploiting reserves of inferior quality coals located in its own boundary subject to its own issues of forest and environmental clearance.

Climate change driven natural disasters like heavy rains and floods are also the reasons behind low coal production. At the end of 2010, Australia suffered serious floods and Indonesia had heavy rains throughout the year causes drop in the coal production. Heavy rains affect Indonesia- the source for India’s major coal imports. It has significantly affected Indian industrial operations depending on coal during the periods of excess rain.

In many countries activism against the use of coal is growing. It mainly because of concern about the climate as the coal mining has serious environmental impacts. In addition, burning of the coal produces more carbon dioxide as compared to other fossil fuels due to its high free carbon content.  Resulting in, existing and proposed environmental laws and the United Nations treaty are trying to prevent the expansion of coal production.

Other domestic and international rules/treaties than can affect coal import from Indonesia   

  • The Indonesian government has announced plans to ban all ex­ports of low-grade coal by 2014, in order to increase coal royalties to the government.
  • The country will issue a regulation requiring all export coal to be upgraded to a calorific value of 5,600kcal/kg – said by Witoro Sularso, sec­retary of the mineral and coal directorate general.
  • Indonesia added mining regulations to restrict the deforestation through the imple­mentation of a two-year moratorium on deforestation. LOI is signed in support of a $1 billion anti-logging project with Norway, under a U.N.-backed program called Reducing Emissions from Deforestation and Forest Degradation.
Posted in: Sustainability