The Reserve Bank of Australia said in a report that the country’s coal mines are at risk of becoming stranded assets depending on how the global energy transition would proceed. Australia, the world’s biggest coal exporter, has around a quarter of its total export from fossil fuels. China, Japan, and South Korea are the largest customers of Australia’s fossil fuels. All of them have set net-zero emissions targets; Japan and South Korea by 2050 and China by 2060.
The RBA considered efforts by China, Japan, and South Korea would impact the domestic fossil fuel industries under four climate scenarios. Under three of them, Australian coal exports would plunge by up to 80% by 2050. In the fourth scenario, which assumes limited progress in reducing emissions, Australian coal exports are projected to rise by 17% by mid-century. The RBA said that coal demand would remain robust this decade, but coal assets would be at risk of being stranded as the global appetite for coal wanes from 2030.
