Last month the Australian Labor Government released modelling that claimed that “On the basis of IEA forecasts, Australia’s coal production is projected to decrease by at least 42 per cent to 2035 and 71 per cent to 2050 across all scenarios”.
Within just a month their forecasts are hopelessly out of date.
Labor’s estimates were based on the International Energy Agency’s 2024 World Energy Outlook released in October last year. The reductions they quote are roughly in line with the IEA’s “stated policies” scenario, which assumes demand based on policies that are “under development”, and the “announced pledges” scenario which assumes that countries act in accordance with the goals they have announced.
The Government did not factor in the “net zero by 2050” scenario which assumes that all countries act to reach net zero. That scenario would deliver an absurd 90 per cent drop in coal demand in just 25 years.
Last year, the IEA did not publish a “current policies” scenario which just assumes countries act according to what they are currently doing. That scenario had been included in previous World Energy Outlooks, but it had seemingly become inconsistent with the net zero religion.
The IEA’s 2025 outlook will be released soon but they already released their draft forecasts about the same time the Government released its modelling. That will change this year following pressure from the new Trump administration to model the world as it is, not how the green activists would like it to be.
The Government released the modelling on September 18. Three days later, the Government’s forecasts were out of date when the IEA released its draft forecasts for the 2025 outlook – the final report will be released sometime in October.
These new forecasts show that the IEA is forecasting just a 10 per cent drop in coal demand by 2050 based on the current policies of different countries – not the 40 to 70 per cent catastrophe Labor is hoping for. This is barely anything to worry about for Australia for a few reasons.
First, coal demand is up 60 per cent since 2000 so a 10 per cent drop is not a big deal. Based on the IEA forecasts we need to produce more coal in the first 50 years of this century than we ever have in history.
Second, Australia produces just 5 per cent of the world’s coal. If there is a 10 per cent drop in coal demand, we would have to lift our market share to just 6 per cent to maintain production levels. Such an increase should not be hard given we produce the best coal in the world.
Third, the IEA forecasts have consistently been on the low side. At the beginning of this century, the International Energy Agency forecast that worldwide coal demand for power generation in the year 2020 would be 3,350 million tonnes of oil equivalent. By 2015 coal use had already reached 5,482 million tonnes of oil equivalent, 60 per cent higher than predicted in 2000, and 5 years earlier too.
The IEA reported earlier this year that “Global coal demand rose by 1.5% in 2024 to reach 8.79 billion tonnes, a new record”. This is way above anything that has ever been forecast, and it is clear to blind Freddy that net zero is not going to happen.
But the Labor Federal Government seems more optically challenged than blind Freddy. They continue to make plans on the basis that thousands of Australian coal miners will lose their jobs. Maybe they should have a plan to support the industry instead.
Hon Matt Canavan
Senator for QLD
