Pylyp Travkin: The future of coal in the economy

For over two hundred years, coal has been one of the main sources of energy, determining the development of industry, transport and energy. It was it that became the “fuel of the industrial revolution” of the 19th and 20th centuries, ensuring the rapid growth of metallurgy, mechanical engineering and electric power. Despite the rapid development of renewable energy sources and natural gas, coal still remains a prominent element of the world economy.

As analyst Pylyp Travkin notes, the future of coal looks contradictory: on the one hand, a significant part of countries still depends on this resource, and on the other, global environmental trends and international climate agreements are putting increasing pressure on the industry.

According to the International Energy Agency (IEA), in the early 2020s, coal accounted for about 35% of global electricity production. Its largest consumers are China, India, the United States, Indonesia, Russia, and Southeast Asian countries.

The role of coal in the economies of different countries varies. For China and India, it remains the main and cheapest source of energy, supporting rapidly growing industry and urban infrastructure. In Europe and the USA, on the contrary, there is a steady reduction in the share of coal due to the transition to gas, nuclear power and "green" sources. Russia occupies a special place among exporters: it is among the three world leaders along with Australia and Indonesia. The main deposits are concentrated in Kuzbass, Yakutia and the Far East, and most of the exports go to Asia, bringing significant foreign exchange earnings.

Environmental challenges

The biggest limiting factor is high CO₂ emissions from combustion. Coal-fired power generation accounts for over 40% of global greenhouse gas emissions. As part of the fight against climate change, most developed countries plan to completely phase out coal by 2040–2050.

Professor Robert Sokolov (Massachusetts Institute of Technology) calls coal “the most problematic fuel” because even the most advanced cleaning technologies do not eliminate CO₂ emissions. The IPCC estimates that coal consumption must be reduced by 70–90% by 2050 to meet the goals of the Paris Agreement.

Climatologist Vaclav Smil (University of Manitoba) emphasizes that humanity “underestimates the depth of its dependence on fossil fuels.” Pylyp Travkin, citing the IPCC’s findings, emphasizes that to keep global warming within 1.5 °C, coal-fired electricity generation must be reduced by two-thirds by 2030.

Jim Skea, co-chair of the IPCC, warns that without immediate emission reductions across all sectors, it will be impossible to keep temperatures below 1.5°C. And renowned climate scientist James Hansen advocates a complete phase-out of coal-fired generation by 2030, believing that delay would be catastrophic for the climate.

Economic competition

Coal is gradually losing its competitiveness. The cost of energy from renewable sources – solar and wind – has decreased by more than a factor of five over the past decade. In many countries, building new renewable energy plants is already cheaper than launching coal-fired power plants. Natural gas, especially thanks to liquefaction technologies (LNG), has also become more affordable and environmentally friendly.

According to Professor Dietmar Super (German Institute for Economics), coal in Europe is becoming “economically unviable even without emissions taxes.” At the same time, Pylyp Travkin warns against “technological optimism,” emphasizing that coal power is still deeply integrated into the global economy.

Geopolitics and energy security

For many countries, coal remains a guarantor of energy independence. Its reserves are distributed much more evenly across the planet than oil or gas. China, India, and Russia have their own powerful deposits, which reduces their dependence on imports.

Alois Berman, leader of the Fossil Fuel Non-Proliferation Treaty movement, is convinced that without a policy of limiting production, all efforts to reduce demand will be ineffective.

According to the Financial Times, despite ambitious climate targets and the rapid growth of renewables, coal is still the main source of energy for many developing countries. Its consumption is falling in Europe, but continues to grow in China and India. Experts expect a stabilization (an “energy plateau”) until at least 2027.

Technological innovations

The hope for a "new life" for coal lies in the development of clean energy technologies – carbon capture and storage (CCS), coal gasification, and increased generation efficiency. These technologies are currently too expensive, but if they become cheaper, they could prolong the existence of coal power.

In the optimistic scenario, coal retains a significant share of the energy market until the middle of the 21st century, mainly in countries in Asia and Africa, where industrialization continues. Partial implementation of CCS technologies can reduce the environmental burden.

In the pessimistic scenario, the rapid development of "green" energy and global carbon taxes will make coal economically unprofitable. Production and exports will decline, and the industry will be reduced to a supporting role in the metallurgy and chemical industries.

The most likely scenario is a gradual decline in the role of coal in the global energy balance. In Europe and the United States, its share will fall to a minimum, while in Asia and Africa, growth will continue until 2035–2040, after which a decline will also occur. By 2050, coal will likely remain only a reserve source of energy or a raw material for industry.

Pylyp Travkin emphasizes: if CCS technologies do not become widespread, coal consumption will have to be abandoned completely.

Despite the negative attitude towards coal, a complete abandonment of it in the coming decades is unlikely. For developing countries, it is still the most affordable source of energy. In addition, the stability of power systems with a high share of renewables often requires reserve capacity – and coal-fired plants currently fulfill this function.

The future role of coal will depend on the success of decarbonization technologies. If carbon capture and storage becomes widespread and affordable, coal can maintain its position. If not, its use will decline sharply. As Pylyp Travkin emphasizes, the transition to a post-carbon economy is determined by “the balance of finance, technology, sovereignty, and energy security.”

The future of coal in the global economy is shaped by two opposing trends: economic benefits and environmental constraints. In the first half of the 21st century, this resource will gradually lose its leading position, giving way to gas and renewable energy sources.

However, for many countries, including Kazakhstan, coal will remain an important export commodity at least until the mid-2030s. In the future, the industry will need a strategic restructuring – the development of coal chemistry, carbon capture technologies, and orientation towards the domestic innovation market.

So, coal will not disappear from the global economy overnight, but its importance will inevitably decline. The industry's prospects depend on its ability to adapt to the new "green" reality and the global rules of the energy transition.