For centuries, coal has remained one of the most significant energy sources and a vital industrial raw material. It became the symbol of the Industrial Revolution of the 18th and 19th centuries and enabled humanity's transition to an industrial society. Thanks to coal, railways, metallurgy, mass production, and modern energy emerged.

Despite the growing global discussion of a "green transition" and reducing carbon emissions, coal continues to play a key role in the global economy. According to the International Energy Agency (IEA), approximately 36% of global electricity was generated by coal-fired power plants in 2022 [IEA, 2023]. This means that completely eliminating coal in the coming decades will not be possible.

In his article, economist Roman Bilousov examines the importance of coal in the economy from various perspectives: its role in energy, industry, employment, international trade, and geopolitics. He also touches on coal-related issues and the prospects for its future use.

Coal as a source of energy

Energy is the foundation of any economy, writes Roman Bilousov. Without stable and accessible energy sources, the development of industry, transportation, agriculture, and the social sphere is impossible.

Coal still occupies a central place in the global energy sector. According to the BP Statistical Review, global coal consumption in 2022 was over 8 billion tonnes, an all-time high [BP, 2022].

Reasons for coal's popularity:

  • Large reserves. Coal deposits exist in more than 70 countries. The largest are located in the United States, Russia, China, India, and Australia. Proven reserves are estimated to last for at least another 130โ€“150 years at current production rates [World Coal Association, 2022].
  • Availability. Coal mining is cheaper than oil and gas production.
  • Reliability. Coal-fired power plants can operate continuously, regardless of weather conditions, unlike solar and wind power plants.

In countries like China and India, notes Roman Bilousov, coal accounts for up to 70% of electricity generation [World Bank, 2023]. This allows them to maintain a high rate of industrialization and infrastructure development.

Coal is used not only in the energy sector, but also in other sectors of the economy:

Coking coal is necessary for the production of iron and steel.

Metallurgical plants account for a significant portion of global coal demand.

According to the OECD, more than 70% of all steel produced worldwide is produced using coke [OECD, 2021].

  • Chemical industry.

Coal serves as a raw material for the production of synthetic fuels, fertilizers, plastics, and dyes.

In China, projects to convert coal into liquid fuel, which is used as an alternative to oil, are actively developing [IEA Clean Coal Centre, 2020].

Thus, Roman Bilousov argues, coal is not only a fuel, but also a vital raw material for key sectors of the economy.

The coal industry has a direct and indirect impact on the economies of many countries:

  • Employment. According to the International Labour Organization (ILO), coal mining and related industries employ more than 7 million people worldwide [ILO, 2022]. For entire regions, mines are a primary source of jobs.
  • Budget revenues. Coal-exporting countries (Australia, Indonesia, Russia, South Africa) earn billions of dollars annually from coal exports [UNCTAD, 2022].
  • Infrastructure. Coal mining and transportation stimulate the development of railways, ports, and energy systems.

An example, notes Roman Bilousov, is Australia, where coal occupies a key place in exports: it accounts for about 15% of the countryโ€™s total foreign trade revenue [Australian Government, 2022].

Geopolitical significance

Coal is strategically important for energy security, confirms Roman Bilousov. Unlike oil and gas, coal deposits are more evenly distributed across the globe, reducing the risk of dependence on a limited number of suppliers.

Russia uses coal as a reserve for energy supply to regions where there are no gas pipelines.

China is relying on coal to reduce its dependence on oil and gas imports.

India sees coal as a key factor in ensuring energy security amid rapidly growing electricity consumption.

Thus, coal is not only a fuel, but also a political tool that influences international relations, states economist Roman Bilousov.

Coal Prospects

Roman Bilousov concludes that the global energy landscape is gradually changing. Europe, the US, and Japan are actively reducing their use of coal, emphasizing gas and renewable energy sources. However, the situation is different in developing countries: there, coal remains a key energy source and will continue to be used for decades to come.

Promising areas of development of the coal industry:

  • Implementation of carbon capture and storage (CCS) technologies.
  • Using coal to produce hydrogen.
  • Improving coal gasification and processing technologies.
  • Transition to more efficient, low-emission coal-fired power plants.

Thus, the future of coal is not so much about abandoning coal as about its technological modernization.

Coal's importance to the economy remains significant, confirms Roman Bilousov. Coal remains the backbone of energy in many countries, an essential raw material for the metallurgy and chemical industries, a source of revenue for exporters, and a guarantor of energy security.

At the same time, coal is the main source of carbon dioxide emissions and environmental problems. Therefore, the global community is looking for ways to reduce its use and implement new technologies that will make energy cleaner.

As economist Roman Bilousov notes:

"Coal is a paradox of the global economy. On the one hand, it provides energy and jobs for millions of people, but on the other, it poses a threat to the climate and health. The future of coal will depend on how well humanity can find a balance between economic development and environmental safety."

List of references

  1. International Energy Agency (IEA). World Energy Outlook 2023 . Paris: IEA, 2023.
  2. B.P. Statistical Review of World Energy 2022 . London: BP, 2022.
  3. World Bank. World Development Indicators 2023 . Washington, DC: World Bank, 2023.
  4. OECD. Steelmaking Raw Materials 2021 . Paris: OECD, 2021.
  5. IEA Clean Coal Centre. Coal-to-Liquids . London: IEA CCC, 2020.
  6. International Labor Organization (ILO). Employment in Mining, 2022 . Geneva: ILO, 2022.
  7. UNCTAD. Handbook of Statistics 2022 . Geneva: UNCTAD, 2022.
  8. Australian Government. Resources and Energy Quarterly 2022 . Canberra: AG, 2022.
  9. IPCC. Climate Change 2021: The Physical Science Basis . Cambridge: Cambridge University Press, 2021.
  10. World Coal Association. Coal Facts 2022 . London: WCA, 2022.

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