Home ›› 14 Oct 2021 ›› World Biz
China’s thermal coal prices hit a new record on Wednesday and oil and gas prices traded near recent highs, amplifying the International Energy Agency’s call for tripling investment in renewables to steady volatile markets and fight climate change.
Demand for energy has surged as economies around the world have rebounded from the COVID-19 pandemic, sending fossil fuel and electricity prices rocketing higher and stoking inflationary pressures that could threaten the global recovery.
China, the world’s second biggest economy and its largest coal consumer, has been grappling with a growing energy crisis that has left homes without electricity and forced industrial plants to suspend operations.
Already the world’s biggest greenhouse gas emitter, Beijing has turned to coal, one of the most polluting fossil fuels, to fill the energy gap. Its coal imports surged 76% in September.
Local governments in top Chinese coal producing areas Shanxi and Inner Mongolia ordered about 200 mines to boost output, but rain flooded 60 mines in Shanxi. Four mines were still shut on Tuesday, a Shanxi official said.
Seeking to ease the power crunch, Beijing said it would allow power plants to charge commercial customers market-based prices, breaking with a policy that had allowed industry to lock in fixed-price power deals with suppliers.
Despite China’s policy changes, the most-active January Zhengzhou thermal coal futures touched a record high of 1,640 yuan ($254.54) per tonne on Wednesday, up more than 190% so far this year. It closed at 532.40 yuan on Dec. 31.
Power and manufacturing supply crunches are showing up in data from Tokyo to London, rattling markets and underscoring the challenge the world faces in cutting reliance on polluting fossil fuels less than a month before the start of global climate change talks.
The European Commission published a raft of measures to tackle surging energy prices, which they will discuss at a summit this month.
Investment falls short
“The world is not investing enough to meet its future energy needs,” the Paris-based International Energy Agency (IEA) said in a report before the United Nations COP26 climate change conference in Glasgow, Scotland, which starts on Oct. 31.
It said the world needed to invest $4 trillion by 2030 in clean energy and infrastructure - triple current levels - to achieve net zero emissions and limit global warming to 1.5 degrees Celsius by 2050, the target of Paris climate accord.
“Transition related spending is gradually picking up, but remains far short of what is required to meet rising demand for energy services in a sustainable way,” it said.
