Steel Cities in China's Hebei Province

BP yesterday released its annual Statistical Review of World Energy, and in it disputed China’s official coal consumption figures provided earlier this year.

Though its data shows a dramatic slowdown in China’s coal use, BP says the country actually burned 0.1% more in 2014 than it had done the year before. On the other hand, the China National Bureau of Statistics reported a coal consumption reduction of 2.9%.

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Due to the huge amount of coal consumed in China, this difference has a major effect on estimated growth in global CO2 emissions. If, as we think, China’s coal use fell in 2014 then global CO2 emission growth will have essentially stopped in 2014; BP’s numbers indicate it “only” slowed down significantly, while still increasing by 0.5%.

The difference in data is puzzling, because our main concern with China’s official numbers had been that they might under-report coal production.

The government has mandated strict cutbacks in production and ordered the closure of mines in order to shore up the coal price and the loss-making mining sector. This could have led to an expansion in the gray market for coal.

However, the coal production numbers from BP and Chinese government are identical, so this is not what’s behind the differing estimates. It is also not in dispute that China’s coal imports fell by 11% in 2014.

The only possible way to reconcile a dramatic fall in output and imports with the stable consumption reported by BP would be to assume a huge reduction in coal stockpiles of about 140 million tonnes. China’s coal stockpiles are reported to be over 300 Mt, so this is not a physical impossibility, but no such drawdown has been reported in industry data nor anecdotally.

The main challenge in understanding the difference is that the BP statistics are essentially a black box — the sources and methodology are not disclosed.

Last year, BP reported that China’s coal use grew by 3.7% in 2013, while government statistics showed a 2.7% increase. In this year’s energy data, BP revised that estimate down to only 2.0% growth. Even larger revisions were made to estimated growth rates in 2010 and 2012, putting the data for previous years almost exactly in line with Chinese government numbers.

The fact that BP seems to have gotten it wrong in previous years does of course not mean that they are automatically wrong this time too, but at least it shows they are not always right.

In any case, BP did not dispute the enormous significance of the change in China’s coal use trend. In fact, they called the coal consumption growth figure the “most striking number” in the entire set of statistics.

See also: Our series on China’s energy challenge.