India to Overtake China in Importing Coking Coal by 2025

India is poised to supersede China and become the world's largest importer of Coking Coal but with this, its commitment to lower emissions is threatened.

Fitch Solutions Macro Research says India is on track to overtake China as the largest importer of coking coal by 2025, according to a PTI report.

“We forecast India’s coking coal consumption to grow at an annual average rate of 5.4 percent between 2019 and 2028, driven by an equally robust expansion in steel production in the country,” it said in the report quoted by PTI.

“As a result, we expect India to overtake China as the largest importer of global coking coal by 2025, despite the country only importing half as much as China in 2017,” it added. While China will remain dominant in terms of overall market share, India will become increasingly important in terms of seaborne demand, it said.

What does it mean?

Coking coal, also known as metallurgical coal, is used to create coke, one of the key irreplaceable inputs for the production of steel. It is the quintessential ingredient in the production of stainless steel, which is a major industry behind car manufacturing, real estate and a huge contributor to the economic growth of the country.

Non coking Coal does not have any caking properties and it is mainly used as thermal coal for power generation. It has a higher ash content and also used in industries like cement, fertilizer, glass, ceramic, paper, chemical and brick manufacturing. Indian Non Coking Coal is classified on the basis of Gross Calorific Value (GCV) which consists of 17 GCV bands.

In January this year, India replaced Japan as world’s second-largest steel-producing country, while China is the largest producer of crude steel accounting for more than 51 percent of production, according to World Steel Association (worldsteel).

“India’s crude steel production in 2018 was at 106.5 MT, up by 4.9 percent from 101.5 MT in 2017, meaning India has replaced Japan as the world’s second largest steel producing country. Japan produced 104.3 MT in 2018, down 0.3 per cent compared to 2017,” worldsteel said.

So the increase in the coking coal Import means that polluting industries like steel industry, Car manufacturing and infrastructure development will see an uptick in the future. That also means that the emissions like what China witnessed, Indian economy will also produce to propel its engines.

According to research, India is the 2nd largest producer of crude steel in the world but also world’s third-largest emitter of greenhouse gases (GHGs), after China and the US. The sector contributes more than 3 % to the country’s gross domestic product (GDP) but adds over 6.2 % to the national greenhouse gas (GHG) load.

It accounts for 28.4% of the entire industry sector emissions, which are 23.9% of the country’s total emissions. While the country has pledged a 33-35% reduction in the “emissions intensity” of its economy by 2030, compared to 2005 levels, the rising coking coal imports may deter to cross that finishing line.

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