The reign of king coal in China might be nearing its end. A recent report by BIMCO, a leading shipping association, suggests that China’s dependence on coal for electricity generation might be reaching its peak.
This shift is driven by a significant rise in renewable energy sources. Between January and April 2024, China’s electricity generation from renewables surged by 12% year-on-year, significantly outpacing the modest 6% growth seen in fossil fuel generation. This trend is even more pronounced when considering that hydropower generation has stagnated due to low rainfall in the past two years.
The impact on coal imports is already being felt. Despite a temporary rise in steam coal shipments in the first four months (29% year-on-year), there was a noticeable dip (7% year-on-year) between March and April, coinciding with a stagnant increase in fossil fuel electricity generation. While the future remains uncertain, the rise of renewables and potential recovery in domestic mining could lead to a significant reduction in China’s coal imports, impacting Panamax and Supramax bulk carrier ships that typically transport this fuel.
Source: India Shipping News