We called 2013 the year of peak global thermal coal consumption, and it was also the first time that China's services sector contributed more to GDP than its industrial sector. How are the two related? China consumes about half the coal produced in the world, so a shift from an industrial economy to a service-based economy has widespread ramifications for the coal industry. This trend away from investing in industry was apparent as early as 2006.
In the US, transformative technologies like hydraulic fracturing helped tip the scales away from coal, significantly narrowing its production cost advantage. From these examples, it's clear that paying close attention to shifts in economic fundamentals, emerging trends in demand and environmental policies can reveal the likelihood of peak demand even years in advance.
As part of our coverage on peak oil demand, we asked Andy Roberts, Research Director – International Thermal Coal, to share his view on what led to peak coal and what lessons we can learn from the coal industry.
Next in our peak oil demand series, we'll look more closely at the impacts of peak demand on the power and renewables market. Read our coverage on how peak oil demand could affect companies and the upstream, supply chain, metals, refining and chemicals industries.