Coal Makes a Comeback, Fueled by War in the Middle East [View all]
Coal is making a comeback.
Countries around the world are returning to the highly polluting but reliable source of power after the Iran war effectively shut the Strait of Hormuz and cut off around 20% of global liquefied natural gas supplies. Taiwan is restarting idled coal-fired power plants and South Korea boosted the amount of electricity it generated from coal by more than a third last month. In Europe, Italy has put its coal plants on standby as it girds for a prolonged energy shock
Coal is a buffer fuel right now. It is independent of geopolitics relative to LNG. It is a hedge,” said Tony Knutson, head of thermal coal markets at consulting firm Wood Mackenzie. “As long as the conflict endures and the strait remains closed, coal will fill that gap.”. The return-to-coal trend is the latest sign of how the economic fallout from the conflict in the Middle East is rippling out around the world. It could also have an environmental impact.
Many countries have worked to reduce coal consumption in recent years to combat climate change, and some have looked to generate power from LNG instead. Coal emits around double the amount of carbon dioxide as burning natural gas.
To be sure, not all countries are switching back to coal and analysts don’t expect the trend to last in the long term, especially if the Strait of Hormuz reopens and LNG shipments resume. Most European countries have already diversified their energy supplies and accelerated the development of renewables. But since the war started some Asian countries have started to burn more coal, which many were already reliant on before the conflict.
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