Germany's coal imports and demand rose in 2022 for a second year running, and the country will depend on coal for longer than planned by the government, coal importers association VDKI has warned.
Demand from Germany's hard coal-fired power stations jumped by 16pc last year to around 25mn t of steam coal — or 21.5mn t of "coal equivalent" (tce) — according to VDKI estimates. VDKI had expected even higher consumption, but strong photovoltaic (PV) generation in the summer and wind generation in the autumn put paid to that.
The country's overall hard coal consumption posted a more modest rise of 4.8pc last year to 39.6mn tce or 46.2mn t, as steel sector demand dropped by 6pc on the year. VDKI lists domestic consumption in tce.
Germany last year imported 43mn t of hard coal, 4.7pc up on 2021, VDKI estimates. Imports of steam coal used for power plants gained almost 12pc to an estimated 30mn t — almost matching 2019 imports of 30.1mn t.
Coking coal and coke imports fell last year, by 7pc and 15pc on the year, respectively, to 11mn t and 2mn t.
At the same time, Germany's 2022 primary energy consumption was 4.7pc lower on the year, with nuclear energy and natural gas posting the highest losses, according to preliminary data from energy sector working group Ageb released last month. The overall share of hard coal in Germany's primary energy consumption last year rose to 9.8pc, from 8.9pc in 2021, according to Ageb.
VDKI president Alexander Bethe warned that given Germany's new dependence on higher-priced LNG for the foreseeable future, and the fact that the country's new fleet of gas-fired power plants touted as a bridging solution towards a fully renewables system is "nowhere to be seen", Germany will depend on hard coal for longer than policy makers expected.
Around 6GW of hard coal-fired plants have returned to the market under legislation passed last year following Russia's attack on Ukraine, which encouraged reserve power plants to return to the market until April 2024.
Bethe reiterated his warning against political assumptions that coal-fired plants can simply be put back on line for one or two winters. And higher gas prices have changed the economic rationale for combining coal-fired generation with carbon capture and storage (CCS) technology, which should no longer be anathema to Germany's policy makers, Bethe said.
Bethe referred to suggestions made by economist Clemens Fuest, president of the Ifo economic research institute in Munich and member of the advisory board to the finance ministry, who last month called for more openness towards CCS for coal-fired power plants.
Fuest warned that Germany risks an unnecessarily prolonged dependence on coal because of the government's anti-nuclear stance, the sluggishness of domestic renewables growth, and high gas prices.
The government's coalition treaty, while advocating a coal phase-out "ideally" by 2030, stipulates that coal-fired generation will not be phased out if such a move jeopardises security of power supply.
But while Germany's government is beginning to work on a future legal framework for CCS technology as part of a "carbon management strategy", this is done in the context of hard-to-abate emissions. Emissions from burning fossil fuels are categorically excluded. The main opposition party, the centre-right CDU, said on 15 January that it does not advocate CCS for coal-fired plants, and is focused more on nuclear power and domestic gas hydraulic fracturing.
Post-Russian coal adaptation
Germany's coal importers have successfully managed, in a very short time, the switch away from Russian coal imports to other sources, Bethe said.
Coal-fired plants were particularly dependent on Russian coal, at 70pc, compared with the country's overall 50pc dependence rate. It is mainly thanks to the US that Germany has weathered the loss of Russian coal, Bethe said, with the US expected to be Germany's main supplier this year, followed by Colombia and South Africa. South Africa, a big source of coal for Germany's power plants until the late 1990s, has been making a comeback, Bethe said.
Russia's import share was 34pc in January-October 2022, followed by the US on 20pc and Colombia on 15pc, according to VDKI data. And stocks now contain practically no Russian coal, Bethe said.
Record global coal production, but seaborne trade weaker
Total global coal production is likely to reach a new record of over 8bn t in 2023, having reached a record 7.9bn t last year, according to VDKI estimates.
Global seaborne hard coal trade fell slightly to around 1.1bn t last year, 1.8pc down on 2021, VDKI estimates. And the flows saw significant changes — Australia shipped 37mn t less of coal, Russia 11mn t and Colombia 3mn t less. Indonesia shipped 18mn t more, South Africa 7mn t and Canada 3mn t.
