|제목||[No.222 Article of Culture] China's Coal Import Suspension and its Global Impact due to Carbon Neutrality Policy|
China's Coal Import Suspension and its Global Impact due to Carbon Neutrality Policy
Cheongdae Times Senior Reporter of Culture Affairs, Jin-Hyeong Jo
Recently, there is an energy crisis in the world as resources such as coal, oil, and natural gas are in short supply. Coal and oil hit their highest prices in 13 years and natural gas in seven years.
The main reason for the recent surge in coal prices is that supply has decreased due to increased waste mines in the aftermath of the carbon neutral policy, while demand has soared due to expectations for a recent economic recovery, creating an imbalance in supply and demand.
In China, since last month, the power supply situation in 10 out of 23 provinces is particularly serious. Thousands of factories have been shut down due to power shortage. In more than 10 of the 31 provinces, municipalities and autonomous regions directly under the direct control of China, from Liaoning Province in northern China to Guangdong Province in southern China.
Following China, India's power shortage is inevitable as coal stocks for power generators run out. India's Central Power Authority recently reported that 63 of its 135 thermal power plants had little or no coal stock left. Another 17 were found to be completely out of stock. Then in April, Australia pointed to China as the origin of the COVID-19 incident and proposed an international investigation, and China, which opposed the proposal, said it would suspend transactions with Australia.
As coal imports from Australia were cut off, demand for electricity surged due to economic recovery, and it was unable to produce as much electricity as needed. Energy demand increased as the global economy, which had been stagnant due to the COVID-19 incident, recovered and weather changes frequently, and China, which suffers from power shortages, hoarded coal and natural gas, fueled the price hike.
The background to the rise in global energy prices is the competition for hegemony between the US and China. After the Biden administration took office, Australia joined the US-led anti-China siege strategy, and China banned the import of Australian coal, which accounts for half of domestic coal for power generation.
As it was difficult to increase coal production in China right away, it increased imports from Indonesia, Russia, and Mongolia. As a result, India, the world's second largest coal importer, suffered a blow. This is because the price of coal has more than tripled as China imported a large amount of coal.
If the problem of coal supply and demand is not resolved, IT companies that use parts produced in China and India will suffer, and retail product prices will rise. In Europe, where winter is approaching, a cold wave is foreshadowing the need to pay high gas and electricity bills due to a decrease in energy supply.
Major European countries, which advocated carbon neutrality, closed coal power plants and increased wind power generation, but this was not enough to solve the growing electricity consumption. As a result, foreign investment institutions are lowering their economic growth forecasts one after another.
Investment bank Goldman Sachs recently downgraded China's economic growth forecast for this year from 8.2% to 7.8%, and Japan's Nomura Securities also announced that it revised its forecast to 7.7% from the previous 8.2%. Earlier, global credit rating agency Fitch also lowered its economic growth forecast for China this year from 8.5% to 8.1%.