12/09/2013 02:32 pm ET Updated Dec 06, 2017

European Coal Use Declines 8 Percent in First Half of 2013


You've probably heard a lot of noise about a coal resurgence in Europe. Earlier this year my colleagues and I tried to sift the fact from the fiction to tell you what's really going on -- a long-term decrease in coal use in the EU. It turns out we were wrong. This isn't going to happen in the future -- it's happening now.

New data from Greenpeace show that while the coal industry has been busy hyping up a coal "renaissance," coal consumption in the EU peaked loone and half years ago -- the last quarterly increase in coal consumption was posted in the second quarter of 2012. More importantly, in just the first half of 2013 consumption was down 8 percent compared to a year ago. So much for the renaissance.

Total electricity consumption and net power exports actually increased slightly, but total thermal generation still dropped due to a strong increase in wind, solar and hydropower generation. Closures of two large coal-fired power stations in the UK and biomass conversion of one contributed to the drop. Several utilities also cited increased emission permit costs as a reason for decreasing coal-fired generation -- the free permits from the second period of EU's emission trading ran out at the end of 2012.

All of which means the decline is happening for largely the reasons we outlined earlier this year: rapidly increasing renewable power generation, plant retirements because of new air pollution rules and carbon pricing. To that can be added increased CO2 payments because of full auctioning of emission permits, and national policies particularly in the UK and Spain. All in all, coal is facing a structural decline in the countries that form the heart of the industrial revolution.

That's why the industry is so desperate to construct a positive narrative of coal growth. The truth is they are faced with oversupply and slowing demand that is putting massive investment plans in jeopardy. Given that coal kills 18,000 people every year in Europe, I'd say our friends across the pond have something to be grateful for this Christmas.