Energy economists are warning coalmining regions to make urgent changes to diversify, with a Chinese slowdown in coal consumption "imminent".
Key points:
- Experts predict China could slash coal imports by between 25 per cent and 45 per cent by 2025
- Mining communities are being warned they have five years to plan for serious impacts
- However, coal exports are forecast to smash records this financial year
A new report warns Australian thermal coal exports to China could fall by 20 per cent by 2025 as China invests in domestic mines and a major coking coal mine in Mongolia.
The report also predicts coking coal exports to China could fall by more than 20 per cent.
The modelling by ANU energy economists Jorrit Gosens and Frank Jotzo suggests that if China commits to its current climate policy, coking and thermal coal imports will drop by a quarter within three years, from 210 megatonnes (Mt) in 2019 to 155Mt by 2025.
The Chinese government has committed to becoming carbon-neutral by 2060.
China's unofficial ban on Australian coal has seen shipments between the two countries stagnate since late 2020.
"If China were to lift the embargo, then the Australian exports would find a much smaller market," Dr Gosens told the ABC. "But even if the embargo stays in place that still matters, because it's a global coal market, and Australian exporters would then simply be outcompeted by suppliers that are now supplying in the Chinese market.
"Other important customers for Australia, such as Japan, Korea, Taiwan, all have decarbonisation policies in place that would see fairly substantial reductions over the next 10 years in their coal imports."