Low-grade imports raise India's coal emissions

India's annual coal emissions are expected to reach new heights by 2023. This was because the energy sector had emitted record amounts of carbon dioxide in the first half of the year. In addition, there was an increase in imports of low-grade and highly polluting coal on the world market.

In the first six months of 2023, Indian power producers emitted more than 500 million tons of CO2 from the combustion of coal. This represented a 4% increase over the same time frame in 2022, which set a new annual record for coal power emissions.

India's energy companies use a combination of domestically produced low-grade coal and imports to fuel their power plants. Coal imports serve as an early indicator of potential emissions from large coastal power plants, some of which are the largest in the country.

Australia is known for supplying coal that burns cleaner compared to other global markets.

However, there appears to be a future decline in the availability of Australian coal due to China, the largest global coal importer, resuming coal trade with Australia following an improvement in bilateral relations.

Consequently, the reduced access to Australian coal in the global market is expected to result in higher Australian coal prices compared to competitive grades. This shift is likely to direct cost-sensitive buyers to suppliers who offer lower-quality coal at a more affordable price.