Canada Week: Canada is a declining market for U.S. coal

Exports of U.S. coal to Canada have declined in recent years as Canada has reduced its coal-fired electric generation.

U.S. coal exports to Canada totaled 3.2 million short tons and represented roughly 5% of the 66.2 million short tons of total U.S. coal exports during the first half of 2012, according to EIA's Quarterly Coal Report.   Further, coal exports to Canada as a share of U.S. total coal exports are expected to reach a record low later this year.  The share of U.S. coal exports destined for Canada averaged 41% between 2002 and 2006. This percentage has declined annually since 2007, according to annual U.S. coal exports data.

The decline is largely the result of Canadian initiatives to reduce coal-fired electric generation. In an effort to reduce greenhouse gases, Canadian federal and provincial governments have announced policies to move away from coal-fired generation. Beginning July 1, 2015, the Canadian federal government plans to enforce a strict performance standard for all coal-fired units. The addition of the new regulations will likely encourage utilities to retire aged coal-fired generators and shift to lower- or non-emitting fuels (i.e., natural gas and renewable energy).

Steam coal demand in Canada, which accounted for approximately 88% of total coal consumption in 2011, is primarily used for power generation. In 2011, according to the latest data available, about 16 % of Canada's electricity was generated using coal, down from 18% in 2010. A shift to lower- or non-emitting fuels may cause further decreases in coal's share of total generation.