Canada’s environmental minister announced Monday that the country hopes to generate 90 percent of its electricity from sources that don’t emit greenhouse gases by 2030, a move that could tamp down demand for U.S. coal exports.
Minister of Environment and Climate Change Catherine McKenna said the goal is to reduce greenhouse gas emissions by about five megatons each year, the equivalent of taking 1.3 million cars off the road, by ramping up its use of renewables. The country will phase out coal and use the Canada Infrastructure Bank to finance more clean-energy projects to achieve its objective, McKenna said.
The announcement hastens the decline of one source of American coal exports. U.S. exports worldwide dropped 32 percent in the first half of 2016, compared to the same period last year, according to the U.S. Energy Information Administration. Exports to Canada roughly tracked with that trend, falling 27.4 percent, from 2.5 million short tons in the first six months of 2015 to 1.8 million in the first half of this year.
President-elect Donald Trump has said he will revitalize the U.S. coal industry, but experts say the sector’s struggles have more to do with competition from cheap natural gas than the Obama administration’s regulations. Trump’s promises to pull the U.S. out of the Paris climate agreement and repeal the Clean Power Plan have prompted warnings from European and Asian officials that the U.S. risks missing out on an investment shift toward clean energy.
While Canada imports more coal from the U.S. than it exports, the country has been a net exporter of electricity to the U.S. recently, with $2.9 billion in 2014 exports and $600 million in imports that same year.
McKenna touted the move as a signal to investors that Canada has a growing clean-energy sector.