The ongoing Iran war and the effective closure of the Strait of Hormuz is driving a global surge in coal production and prices, even as the the world’s dirtiest fuel was posed for long-term decline. The International Energy Agency had previously projected demand would plateau at approximately 8.8 billion tonnes, then begin to decline through 2026.
Although analysts expect the return to coal to be temporary, it will still impose heavy costs: increased deaths from air pollution, more climate chaos and a transfer of wealth from consumers to coal producers in the form of windfall profits.. Such spikes as coming at the expense of climate stability. Furthermore, temporary price spikes generate windfall profits that transfer wealth from consumers to coal producers – particularly mining companies and exporters, as demonstrated during the energy crisis following Russia’s invasion of Ukraine.
Anne Jellema, Executive Director of 350.org, said:
“The Iran war is exposing the deadly consequences of global fossil fuel dependence. Coal producers are making massive profits while governments delay the clean energy transition. It’s a stark reminder why windfall taxes on fossil fuel companies are more relevant than ever. The Iran war shows what we have long warned: fossil fuel dependence creates crises, profits for polluters, and suffering for ordinary people. Windfall taxes and accelerated renewable deployment are urgent tools to turn this around,”
Across Asia, the shortage of oil and LNG is forcing countries to consider a return to coal, with Japan and South Korea lifting limits on coal utilization, Thailand restarting mothballed coal-fired plants, and India and China turning to domestic coal production. Meanwhile, coal-exporting nations are responding by ramping up output. Indonesia, the world’s largest coal exporter, has reversed planned cuts to production. Australia, South Africa, Turkey, and the Philippines are also increasing exports to meet soaring demand.
350.org is calling on governments worldwide to introduce windfall taxes on fossil fuel profits to prevent companies from profiting off global crises and accelerate the transition to renewables, prioritizing energy security, affordability, and climate protection.
ENDS