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Very low sulphur coal

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This article is part of the Coal Issues portal on SourceWatch, a project of CoalSwarm and the Center for Media and Democracy. See here for help on adding material to CoalSwarm.

Very low sulphur coal (VLSC) is coal with sulphur content of less than 0.2%. This coal is sought after by power generators that need to meet mandated sulphur dioxide emission standards but where they haven't installed flue gas delsuphurisation (FGD) equipment (which is often referred to as "scrubbers").

Background

A consultant's report for the UK Department of Trade and Industry noted that "compliance with the 400mg/Nm3 standard [for sulphur dioxide] requires a 0.18% sulphur coal on 24GJ/t CV" [calorific value]. The report also notes that a FGD-equipped coal station can meet the 400mg/Nm3 "even burning high sulphur UK coals. A 1.8% sulphur coal (on a 24GJ/t CV) burned in a standard coal unit with FGD with an average removal rate of 90% will produce about 400mg/Nm3 of SO2." [1]

"The main provider of VLSC is Indonesia, which has the potential to produce up to 40 mt/yr of <0.2% sulphur coals. Russia can supply a few million tonnes of 0.2% coal. However, given that a large proportion of Indonesia’s coal is nearer 0.1% sulphur, it is possible to increase the tonnages of compliance coals by blending the lowest sulphur grades with near compliance coals. Russia exports 10-15 mt/yr of 0.3-0.4% sulphur coals, which could provide a good blending stock. It would also be possible to blend 0.1% sulphur Indonesian coals with small quantities of South American coal (from Colombia or Venezuela) which averages 0.6-0.65%. Such blending could stretch the supplies of compliance blends to around 60-70 mt/yr, however, it is by no mean clear that these blends will be acceptable to boiler operators".[1]

It also noted that "the main demand for VLSC is likely to come from the US and from European utilities. Within Europe, Spain, UK and Italy are likely to be the main buyers, as most other importers have (or will have) fully retrofitted FGD. The East coast US utilities currently purchase 2 mt of Indonesian coal and demand is expected to grow, in spite of their ability to purchase their own low sulphur coals from the Powder River Basin. Whilst the major East Asian buyers (Japan, South Korea and Taiwan) tend to either run FGD or else are set comparatively lenient emission standards Indonesian coal is a natural supply source for the region and is required to meet overall demand in the region. Currently, Europe and the USA are considered by the Indonesians to be an important but secondary market for their coal."[1]

As for Russian low sulphur coal, the report noted that there were limits on coal export port capacity and that in the absence of a premium they could be consumed internally "even where sulphur levels are of no concern".[1]

However, they did note that there is "evidence to suggest that the VLSCs are beginning to gain a price premium in the international market and this trend is expected to accelerate." They noted that "in normal market conditions" the premium would be "around $2-3/t for a 0.2% versus a 0.8% coal" but that at times of high demand for coal the premium could exceed $5 a tonne.[1]

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References

  1. 1.0 1.1 1.2 1.3 1.4 Mott MacDonald, "UK Coal Production Outlook: 2004-16", Department of Trade and Industry website, Final Report March 2004.

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