COALMOD-World: A Model to Assess International Coal Markets Until 2030
Christian Von Hirschhausen
Program on Energy and Sustainable Development
This paper introduces a tool to analyze the future developments
of the international steam coal market, the "COALMOD-World" model. Steam
coal is a major fuel for electricity generation today and its use is expected to grow
dramatically in the coming decades, despite the potential negative external effect on the climate through
the CO2 emissions.
In tandem with the growth of global coal usage, the volume
of the international trade coal market has been increasing in recent years.
This trend is expected to continue, and an increasing global trade means
that many countries will rely on imports. Identifying how the trade flows will develop and
where steam coal will come from in the future - a primary purpose of the model - can help us
better assess possible energy security issues.
combination of model theory and detailed market analysis provides the ground for the development
and the implementation of the model. The model setup follows the
organization of the value-added chain of the steam coal sector. The value chain
is complex and there are various types of players involved at each stage. Producers can be large national and sometimes
state-owned companies. There are a few large multinational coal companies but also many smaller
companies, usually operating in one country only. Transport infrastructure can be built
by the mining company or by another entity. Often, it consists of rail infrastructure
but in some countries trucks or river barges are used. Export ports can be dedicated to one
company or be operated by another company. Traders as intermediaries also play a role as they
can be vertically integrated or contractually connected to every stage of the industry.
This modeling framework allows for detailed analysis of how the global coal
trade may evolve in the coming decades.