Coal’s changing fortunes: a Bettercoal view

The FT’s Dow Jones Coal Index shows how share prices of the 234 listed companies have dropped over the past five years; down 85% in the past year alone.  Goldman Sachs heralded coal’s decline in 2013, reaffirming in September 2015 coal “peaked” and prices would fail to recover. At US$50/tonne, the sector is challenged.

And while some continue to contest climate change science, 195 nations signed the COP21 agreement in December 2015, considered by many as real progress. Even though coal has taken a fall, policy-makers, companies and investors know, approximately 80% of all commercial energy consumed comes from fossil fuels, coal will continue unabated in the short-term and that (especially) developing nations are expected to continue to increase their demand for energy and infrastructure in the years to come. Despite China’s aim to peak coal, for developing nations, it is still inexpensive and readily available. The New York Times cautions the long-term viability of the UN voluntary agreement after 2020, stating its continued success depends on two factors: global peer pressure and the actions of future governments. The geo-politics around this are complex; concerns around funding, sovereignty, power-shifts and interdependence abound and the technology and innovation needed to cover all current and future energy demand requires time and clear policies.