China's Coal Stockpiling: The End of the Fossil Fuel Era?

China's coal reserves, accumulated to the point that they could power the entire United States' electricity needs until 2025—including fueling boilers and smelting furnaces—are a striking reflection of its vast stockpiles. This comes when the U.S., one of the world’s top coal producers, has seen its production halved since 2008, with last year's output around 527 million metric tons, placing it fourth globally.

There’s little mystery behind this massive coal buildup, which reached 636 million tons by the end of June this year. In late 2021, amid dangerously low coal reserves that led to widespread power outages, Beijing ordered mines and power plants to ramp up production and reserves to avoid a repeat of the blackouts. Thanks to these efforts, China has contributed about 97% of the global increase in coal production since 2018.

However, China now faces the challenge of managing this enormous accumulation, as the quality of the coal degrades over time.

The Deteriorating Quality of Coal: An Environmental and Economic Risk

This stockpiling points to significant waste in a country suffering from an economic slowdown that is increasingly impacting the global economy. Furthermore, the decline in coal quality signals the end of China’s era as the top contributor to global emissions.

While the reduced demand for coal in the U.S. has helped curb greenhouse gas emissions in recent years, China may be on a similar path, but on a larger scale in the years to come. Stored coal reacts with oxygen, reducing its energy content over time, and in the worst cases, it can even self-ignite. Even under the best conditions, coal loses about a quarter of its energy annually. This means that stored coal produces no useful energy while continuing to emit harmful pollutants.

Declining Coal Consumption: A Sign of Economic Slowdown

The three sectors that consume about 95% of coal in China are clearly in decline. Cement production fell by 11% in the first seven months of the year compared to the previous year, while steel output dropped by 2%. Coal-fired electricity generation saw only a marginal increase of 0.5%.

China’s Coal Stockpiling: The End of an Era?

The accumulation of coal in China may mark the end of a historical phase of heavy reliance on coal and could symbolize the peak of this fossil fuel consumption. This stockpiling, despite its drawbacks, may signal a global shift away from coal dependency, potentially pointing to a more sustainable environmental future.