BIMCO: UK Seaborne Coal Import Down by 64 Pct

The main exporters of thermal coal for coal-fired power plants to the United Kingdom have experienced a heavy decline in seaborne cargo volumes in 2016 as a result of the UK close to doubling its Carbon Price Floor (CPF), according to BIMCO.

Russia, Colombia and the United States have been the top coal exporters to the UK for the previous three years.

Since the UK increased their CPF to GBP 18 per tonne of CO2, the exports from the three main exporters during the first 7 months have declined 69% compared to last year, while the country’s total import of coal for coal-fired power plants dropped by 64% for the same period.

“This is one of the most significant effects, which has impacted the demand side of the global dry bulk shipping industry in 2016. It reflects something bigger lurking beneath the surface of the coal industry and in transportation of this commodity,” Peter Sand Chief Shipping Analyst at BIMCO said.

When the CPF first came into effect in April 2013, it was based on the carbon price support (CPS) price per tonne of CO2 on top of the EU emission trading system (ETS) rate per tonne of CO2. At that time the CPS was GBP 0.819 per Gigajoule (GJ).

From the beginning of 2016 the CPS was increased to GBP 1.568 per GJ equalling to around GBP 18 per tonne of CO2, operating on top of the EU ETS at EUR 5 per tonne of CO2.

The CPF will double again in 2020 to GBP 30 per tonne of CO2 and by 2030 it will be GBP 70 per tonne of CO2, according to BIMCO.

“Implementing a tax which increased the total price of coal by 138%, caused an immediate reaction from the UK coal-fired power plants. The dry bulk industry is hugely affected by this, due to a large reduction in long haul thermal coal imports,” Sand said.

UK coal consumption has been falling for four years, while the development in EU coal consumption has been more stable. The increase of the CPF level in 2016, caused a decline of 56.7% year-on-year for the first five months of 2016.

A total of 6,839 thousand tonnes was consumed in the first five months, compared to 15,800 thousand tonnes in the year before.

“It will be a setback for the dry bulk shipping industry if the CPF becomes a standardised scheme and is adopted by other nations as well as on a supranational level. It will, if introduced at the same level as in the UK, cause a similar development and closure of coal-fired power plants,” Sand added.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Sep 2018 >>
MTWTFSS
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

CWC World LNG & Gas Series: 10th Asia Pacific Summit

Bringing together the key LNG buyers and sellers from across the globe, the Summit provides…

read more >

Europort 2018

From 15-17 May 2018, the 12th edition of Europort Romania willl take place in the IDU Hall in Constanta…

read more >

Defence Safety Conference Supported by The Defence Safety Authority, UK MoD

The Defence Safety Conference is the first of its kind exclusively dedicated to safety across the defence domain…

read more >

Singapore International Bunkering Conference and Exhibition (SIBCON)

The 20th edition of the Singapore International Bunkering Conference and Exhibition (SIBCON) will be about inspiring change…

read more >