Coal Demand

Updated June 2024

Summary

Demand for subbituminous coal is expected to vanish in Alberta as coal-fired power plants are either converted to natural gas or decommissioned. 

International demand is expected to remain stable for metallurgical and thermal coals, especially from Asian markets and other developing regions over the forecast.

Subbituminous Coal

Demand for subbituminous coal is expected to vanish in Alberta as coal-fired power plants are either converted to natural gas or decommissioned. Capital Power’s Genesee generating station is currently undergoing a dual-fuel transition and will be fully converted to natural gas in 2024.

Retirement of Coal-Fired Power Plants

The projected retirement and conversion of Alberta’s remaining coal-fired power plant in 2024 is expected to significantly affect the production of subbituminous coal, as nearly all subbituminous coal is for intraprovincial power generation.

In 2018, the Government of Canada amended the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations, which set emissions performance standards for coal-fired electricity power plants. The amendments were made to accelerate the phaseout of coal-fired power generation from 2050 to 2030 to achieve Canada’s commitment to reduce overall greenhouse gas (GHG) emissions. To accomplish this goal, the amendments require all units to meet a performance standard of 420 tonnes of carbon dioxide per gigawatt per hour of electricity produced (t of CO2/GWh) by 2030.

The outlook for subbituminous coal production has declined due to an accelerated phaseout of coal among electricity generators. TransAlta phased out its coal-fired power generation in Alberta in 2021, resulting in the closure of the Highvale mine. Heartland Generation also phased out its coal-fired power generation in 2021, with the closure of the Sheerness and Paintearth mines. Capital Power is targeting 2024 to complete the conversion of its Genesee generating station to natural gas, which will prompt the closure of the Genesee mine.

Metallurgical Bituminous Coal

The Grande Cache mine produced 0.71 megatonnes (Mt) of metallurgical coal and were exported to South Korea and China in 2023. Asia remains Alberta’s primary market for metallurgical coal. However, the long distance from the mine to market creates a competitive disadvantage for Alberta’s exporting coal producers.

Thermal Bituminous Coal

Asia continues to be the largest source of demand for Alberta’s thermal bituminous coal for power generation. Despite international demand, growth in exports beyond 2024 will depend on whether new projects in Alberta proceed.

Exports

Alberta’s Coal Valley and Vista Coal mines produced 7.4 Mt of thermal bituminous coal in 2023, of which two countries accounted for most of the exports:

  • Japan: 4.5 Mt
  • South Korea: 1.1 Mt

Despite a global decline in coal use, Asia saw increased coal demand for power generation led by China, India, Japan, and South Korea. China is the world’s largest producer and consumer of coal, but the southeastern Asian economies are increasingly driving current and projected coal demand. Most of the Asian demand for thermal bituminous coal is expected to be met by other international suppliers.

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