Coal comeback?

"Coal and gas are at war, and gas is losing the battle," Maria van der Hoeven said recently, when asked to describe the current situation on the European market for raw energy materials. The director of the International Energy Agency (IEA) was commenting after a study her agency published on the issue. The paper shows that coal is currently experiencing a worldwide renaissance and it exposes Germany as the world's largest user of brown coal.

Environmental organisations are also keen to highlight what they see is a problematic new trend. “Coal is one of the most harmful energy sources for the environment," said Karsten Smid, energy expert from Greenpeace in an interview with DW. Burning coal causes major amounts of carbon dioxide to be released into the atmosphere.

According to the IEA, in 2011, coal was the second most used energy source worldwide, following crude oil. That means that coal is now covering 28 percent of the world's energy needs.

Flooding the market

According to estimates by the IEA - which has represented the interests of major industrialized countries since the oil crisis of the 1970s - coal consumption will continue to rise by around 500,000 tons per year until 2017.

The reason for coal consumption increases in Europe is clear says Maria van der Hoeven. "Relatively high gas prices, as well as lower coal prices and - let's be honest - nearly negligible CO2 prices in Europe."

Ironically, the reason for the low CO2 prices in Germany, is due to large amounts of cheap shale gas being produced in the United States. The US coal industry simply cannot compete against the shale gas industry, according to van der Hoeven, so companies ship the coal to Europe instead and flood the market. "Gas is being pushed out of the market - the exact opposite of what is happening in the United States," she told DW.

At the same time, the price that European industry must pay for every ton of CO2 they emit is relatively low. It’s a major problem according to Greenpeace’s Smid.

Europeis currently struggling to stabilize it’s emissions trading - and the prices confirm that.  Formerly, the price for CO2 emissions stood at 30 euros ($40) per ton; now it is about six to seven euros. "That's why the energy industry is okay with burning this quantity of dirty coal," Smid said.

"China is coal"

At the same time, coal is also covering the rising energy needs of emerging markets, especially those of China and India, van der Hoeven points out. "That's why it's important to consider that decisions being made in Beijing or New Dehli concerning which forms of energy to use or where to get it from, actually affect all of us," she said. As the IEA states it in its report: China is coal and coal is China.

But that could change soon, Smid believes. "A wind power plant is being built every two hours in China," he said. In the wind energy and especially the solar and photovoltaic sectors, the Chinese have tapped into German expertise and are now doing mass production for their own market.

IEA chief van der Hoeven believes that the gas monopoly can be broken up through a combination of more efficient and cleaner technology in coal-burning plants, and greater reliance on gas and renewable energies. "And, let's not forget nuclear energy," she said, adding that each country must decide for itself in that matter, including Germany.