May 9 (Bloomberg) -- Europe, which was overtaken as the largest importer of seaborne thermal coal by China last year, will cut consumption 26 percent by 2020 as power stations burning the fuel close, according to Deutsche Bank AG.
Usage will fall to 271 million metric tons from 365 million last year, Michael Hsueh and Michael Lewis, analysts at the bank in London and Paris, said today in a report. The amount of coal-fired generation capacity will drop 15 percent to 162 gigawatts in the period as the European Union seeks to meet renewable energy targets, they said.
“In Europe, emissions policies already in place will result in net closures of coal-fired generation over the next five years, while expanding renewable output will push coal utilization lower through 2020,” Hsueh and Lewis said.
The declining European consumption will outpace a 4.7 percent a year cut in coal output within the region, according to the report. Annual global output capacity growth will need to fall to 1 percent a year from 3 percent to meet seaborne thermal coal demand of 1.061 billion metric tons in 2020, compared with 1.027 billion last year, it said.
“Three of the most important demand centers, China, Europe and the U.S., contain the seeds of a softening in demand growth, while U.S. export capability may grow,” the analysts said.
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