World Coal boss urges BHP not to dump lobby group

A spokesman for BHP declined to respond to the comments from the World Coal Association's chief executive.

Mr Sporton made the comments in an interview with Fairfax Media during a week-long visit to Australia, during which he said coal had a long term future, was the biggest source of electricity generation in the world, and could co-exist in the electricity generation space along with renewables.

While acknowledging that the share of electricity generation around the world from coal would decline over the next 20 or so years, Mr Sporton said thermal coal still had an important role to play in electricity generation around the globe.

Worldwide, thermal coal demand was "marginally increasing" at the moment, he said.

"What's happening in the global coal market is we're seeing reduced demand for coal in places like Europe, reduced domestic demand in the United States - which is largely due to the emergence of shale gas - and then we're seeing pretty healthy increases in demand for coal in places like India and South East Asia. And even in a few other south Asian countries as well, so Pakistan, Bangladesh.

"So what that sort of means is that those growth markets are largely outweighing the markets where there's a reduction in demand. The reduction in the EU is very much driven by policies that support renewables...and in the US it's largely driven by the competition with shale gas," he said.

Australia was well positioned to benefit from international demand for coal because of its proximity to the main global growth markets for coal, South East Asia and India, as well as the quality of the coal, he said.

Mr Sporton said energy policy and energy strategy should focus on three key elements; affordability, reliability and emissions reduction.

"So long as you've got an energy policy and an energy system that supports those three things, you will likely need to have a balance of different sources of electricity," he said.

Mr Sporton said he believed demand for thermal coal increased slightly in 2017, and "all the signs" suggested it would increase again this year.

"Today thermal coal is about 37 per cent of global electricity...so coal is by far the most dominant source of electricity globally. Now that will change over time.

"By 2040 the International Energy Agency predicts that coal, I think will be about 27 per cent of global electricity, renewables will be more than that as a total. But that share decline, actually hides a growth in absolute electricity coming from coal.

"Because the global electricity pie continues to grow, even though coal's share declines, coal still grows in absolute terms in the IEA forecasts," he said.