ARKANSAS, February 2 (Future Headlines)- The landscape of U.S. thermal coal exports in 2023 showcased a complex interplay of contrasting trends, raising questions about environmental commitments and the global energy transition. Ship-tracking data from Kpler revealed that U.S. exporters of thermal coal garnered over $5 billion in revenue by shipping more than 32.5 million metric tons of this high-polluting power fuel. These figures marked the second-highest export earnings since 2017, following the $5.7 billion recorded in 2022. Paradoxically, the surge in exports occurred against the backdrop of decreasing domestic coal use for electricity generation in the United States.

U.S. exporters of thermal coal earned over $5 billion in 2023, shipping out more than 32.5 million metric tons. While this represented the second-highest earnings since 2017, the total volumes marked the highest since 2018. The surge in thermal coal exports occurred simultaneously with a significant reduction in U.S. power producers’ reliance on coal for electricity generation. Data from energy think tank Ember showed a 57.5% decline in U.S. coal-fired power generation from 2013 to 2023, reaching 672.5 terawatt hours (TWh) from 1,581 TWh.

Coal’s share of the U.S. electricity generation mix dwindled from 39% in 2013 to 19% in 2023. This decline was attributed to the increasing adoption of natural gas and renewable power on U.S. electricity grids. Reductions in coal use were driven by pollution reduction efforts, leading to a 57% drop in annual carbon dioxide emissions from U.S. coal-fired power generation, amounting to 865 million metric tons, from 2013 to 2023.

Coal miners and trading firms responded to domestic demand losses by intensifying sales of U.S. coal to international buyers, particularly in Asia, where coal remains a primary fuel source for power generation. India emerged as the largest destination for U.S. coal shipments in 2023, accounting for 36.3% of total U.S. thermal exports. Other major destinations included The Netherlands (13.4%), Egypt (8.5%), Morocco (6.7%), and Japan (6.0%).

China became the 6th largest buyer of U.S. coal, representing 4.6% of the total. In 2023, a record 17% of total U.S. coal production was exported, compared to around 12.5% in 2017. The share of U.S. coal exports may continue to expand if domestic demand declines more rapidly than mining output. However, any potential reduction in U.S. shipments might not translate into lower global coal consumption, as alternative suppliers like Indonesia and Russia could fill the gap with lower-grade coal.

The environmental impact of such shifts raises concerns, as alternative coal sources may emit even greater volumes of emissions when burned for power. The enduring demand for thermal coal in North Africa and Asia, coupled with specific grade requirements, keeps the market lucrative for exporters. The decline in coal use for electricity generation since 2017 led to a 44% reduction in U.S. coal production, dropping from around 775 million short tons to 436 million tons in 2023. However, the total exports of all coal types only fell by about 24% over the same period.

The paradoxical dynamics of reduced domestic coal use and surging exports place the United States in a nuanced position concerning its environmental commitments. The path forward involves navigating the delicate balance between economic interests, global energy demand, and the imperative to address climate change.

Reporting by Moe Khaled; Editing by Sarah White