Coal is facing tough times. Nowhere is this felt more than in Australia, the world’s largest exporter of the dirtiest fossil fuel. Last week, one of the country’s biggest banks, the National Australia Bank, said it would no longer fund coal projects. This week, Adani, an Indian multinational failed to get funding from national and international banks to build a coal mine in the Australian state of Queensland.
Now, Roy Green, chairman of the Port of Newcastle in Australia, the world’s biggest coal port, has said (paywall) that the port is preparing for a world without coal. In 2016, coal accounted for 96% of trade at the port, which is mined in the nearby Hunter Valley region. The port is hoping to diversify into non-energy sectors, such as a container port to import and export high-value products, and maybe even a cruise terminal to attract tourists.
China Merchants Bank and the Infrastructure Fund, an Australian investment group, paid the Queensland government A$ 1.75 billion ($1.6 billion) in 2014 for a long lease on the port. “With a 98-year lease, the Port of Newcastle is obliged to think long term, and it will,” Green told the FT.
That said, it’s unclear how many years it will take for the port to stop shipping coal. The intergovernmental group, the International Energy Agency (IEA), expects the world to reduce, but not end, its consumption of coal in the next few decades. In its 2017 World Energy Outlook, the IEA estimated that, between 2016 and 2040, the world will burn at least a quarter of the coal it burned between 1990 and 2016. Though some coal energy will be replaced by renewables like solar and wind, most will be replaced by burning natural gas instead.
In this context, the Port of Newcastle’s new strategy is only somewhat good news. The 2015 Paris climate agreement states that its 197 signatories—comprising of all countries in the world, including the US, which has indicated it will pull out but has yet to do so—will try to keep global average temperatures from rising above 2°C. That’s going to require the world to hit net-zero emissions by about 2060.
But the world can’t hit net-zero emissions while also burning fossil fuels. For that, it’s going to require technologies like carbon capture and negative emissions, which could trap greenhouse-gas emissions and bury them underground.