China’s coal consumption declining—Impermanent or permanent?

• Published in: Resources, conservation and recycling conservation and recycling, 2018-02, Vol.129, p.307-313
• Main Authors: Tang, Xu, Jin, Yi, McLellan, Benjamin C., Wang, Jianliang, Li, Shiqun
• Format: Article
• Language: English
• Subjects: Coal consumption; Embodied energy; Energy structure; Input-output analysis; LMDI
• ISSN: 0921-3449; 1879-0658
• DOI: 10.1016/j.resconrec.2016.07.018

•Changes of industrial structure reduce China’s coal consumption significantly since 2012.•Increasing trend of economic scale effect on China’s coal consumption has reversed.•China's embodied coal exports are falling under increasing trade surplus since 2011.•Intrinsic mechanism results in permanent trend of China’s coal consumption declining. Coal dominates China’s energy consumption, and academic published papers especially before 2010 usually undervalued China’s coal consumption significantly. However, China’s coal consumption has declined continuously in 2014 and 2015. This seems to indicate that China may have finally reached the peak of its coal consumption in 2013. There is minimal quantitative research on the analysis of this phenomenon. The logarithmic mean Divisia index (LMDI) method is used in this study to analyze the key factors that drive China’s direct coal consumption variation. Approaching the issue from the perspective of indirect coal consumption, an Input-Output model is established to discuss China’s embodied coal exports in this study, aiming to trace the ultimate demand for coal to understand why consumption might have peaked. The research results suggest that changes of industrial structure started to reduce China’s coal consumption significantly since 2012, and the effects of energy intensity and energy mix have continued to play important roles in coal consumption reduction since 2007, especially the energy mix effect since 2012. On the other side of the equation, although the economic scale effect – the only factor apparently driving increases in China’s coal consumption – is still large, the increasing trend has reversed, and its impact has stabilised. China’s embodied coal exports, both absolute volume and the proportion of coal consumption, are falling even though the trade surplus has still been increasing in recent years, which is completely different with the trend before 2011. China’s continuous efforts on export restructuring – shifting from labour & energy-intensive to capital & technology-intensive – will reduce embodied coal exports and coal consumption in the future.