Coal, steel and the energy transition

Coal is not a commodity in the sense that it is not standardised, unlike other materials. Copper, for example, has its place in the periodic table as it is a ‘pure’ element, with a fixed chemical makeup.

Coal, on the other hand, is a complex combination of many elements, primarily carbon, along with different minerals and traces of metal.

A better comparison may be with raw ore from mines, before concentration and refining, when copper becomes Cu¹  and is fully fungible. There are different types of copper ores at the mining level, but at the end of the chain refined copper is the same metal everywhere.

Coal is different because what you dig is what you get. Coal is essentially the offspring of antique plants buried millions of years ago and transformed by time, pressure and heat. This geological process has led to coals of different qualities across mines. Those coals are classified by ranks - lignite, sub-bituminous, bituminous and anthracite – and differ in their physical and chemical features - calorific value, moisture, volatiles, ash and so on.²

Geology aside, society largely consumes two families of coal:

1. Thermal coal (or steam coal) is primarily used to produce electricity in power plants, but also to generate heat in certain industrial processes, such as for cement or glass manufacturing
2. Metallurgical coal (or coking coal) is generally used to produce metals, mainly steel through the blast furnace process

According to the International Energy Agency3, world coal consumption was 8.69 billion tonnes (BT) in 2023, made up of 7.59BT of thermal coal (87%) and 1.10BT of metallurgical coal (13%).

Coal is also the main source of carbon dioxide (CO2) emissions, accounting for 41% of fossil fuel emissions4, with the bulk coming from thermal coal.