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Posted: 2022-11-18 21:34:18

Despite global demand for coal continuing to plummet by 2050, the need for Queensland metallurgical coal is expected to increase during that time, state government analysis shows.

Queensland Treasury has painted a picture of what future international demand for the state's thermal and metallurgical coal could look like in a new report based on the International Energy Agency's (IEA) World Energy Outlook, released this year.

The IEA's report looked at three different scenarios for future coal demand to 2050.

One was based on current policies international governments had in place, the second factored in governments achieving climate-related policy commitments, and the third modelled the outcome of global net-zero carbon emissions by 2050 being achieved.

Under all scenarios demand for coal by 2030 was predicted to fall — ranging from 10 per cent to 45 per cent depending on the scenario — and between 2030 and 2050 demand was expected to decline a further 25 to 82 per cent.

Despite this the IEA expects Australian coal exports to increase 10 per cent by 2050, largely driven by metallurgical coal which is used for steel making.

Queensland Deputy Under-Treasurer for Economics and Fiscal Dennis Molloy said the government expected demand for metallurgical to remain strong, but the need for thermal coal – used in electricity production — would suffer.

Dennis smiles.
Queensland Deputy Under Treasurer for Economics and Fiscal Dennis Molloy.(ABC News: Mark Leonardi)

"We know from analysis that's been done by organisations such as the International Energy Agency that with the adjustment to a lower-carbon economy, that that will mean that thermal tonnages will come under pressure," he said.

"But what Queensland has the advantage of is that we're predominantly metallurgical coal.

"There's still a very bright outlook for metallurgical coal because of the industrialisation in India, which is going to be very important for us.

"The quality of our coal, where we are positioned geographically, our supply chains, our skilled workforce and the incredible resilience of the industry, really positions us so well to be able to make sure that we've still got very strong volumes of coking coal into the future."

Queensland Treasury's report noted demand for metallurgical — or coking — coal would continue for some time due to the lack of current alternatives to coal in the steelmaking process.

A female mine worker walks past a mine dump truck at a coal mine in central Queensland.
India is now driving demand for Queensland's coal.(AAP: Dan Peled)

Queensland is the world's largest seaborne exporter of metallurgical coal, and produced 90 per cent of the country's coking coal in 2021-22.

The report highlighted that record hard coking coal and thermal coal prices drove the value of Queensland's coal exports to a record high of $79.7 billion for the year to September 2022.

The Queensland Treasury report also looked at the impact of China's unofficial ban on Australian coal imports which took place in October 2020.

The ABC previously reported Australia exported close to $14 billion of coal to China in 2019 — most of that coking coal. 

Mr Molloy said China used to be Queensland's largest export market for coal, but the losses had now been largely filled by India.

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