By David Stanway
BEIJING (Reuters) - Coal use in China, the world's biggest polluter, could peak earlier than previously forecast as slower economic growth cuts power demand and the government clamps down on energy-intensive industries to meet its emissions reduction goals.
Organisations such as the government-affiliated Energy Research Institute (ERI) and the U.S.-based Natural Resources Defense Council (NRDC) are predicting coal use will peak before 2020. Previous industry forecasts have ranged from 2022 to 2027.
As well as hitting domestic miners, a quicker shift away from coal will also threaten sales by Australia and Russia - among the top coal exporters into China.
Citigroup, which cut its forecast for Chinese "peak coal" to 2020 last year, has also said China's fight against pollution, together with efforts to improve energy efficiency and restructure its economy, could bring the date further forward.
"We expect this combination of factors to actually slow the power sector's use of coal leading to a possible flattening and peaking before 2020," Michael Eckhart, Citi's global head of environmental finance, told a conference in Beijing this month.
China has said it aims to restrict consumption to around 4.2 billion tonnes by 2020, up about 10 percent from 3.8 billion tonnes in 2013, but some government researchers, including ERI's Jiang Kejun, predict it could start falling much sooner.
After years of blistering growth, coal use is already being slashed in smog-hit regions like Beijing and Hebei as part of China's "war on pollution", and action is also being taken to consolidate or shut smaller mines.
China mines most of its own coal and the earlier target will likely increase pressure to tackle chronic overcapacity.
Coal production in the first three quarters of 2014 fell for the first time since the Asian financial crisis, declining 1.3 percent to 2.85 billion tonnes.
Coal accounts for about 60 percent of China's CO2 pollution and the government has pledged to bring emissions to a peak and double the share of zero-carbon sources in its energy mix to 20 percent by "around" 2030.
Xie Zhenhua, vice-chairman of China's National Development and Reform Commission (NDRC), responsible for climate policies, promised strong measures to tackle coal, adding that consumption "should fall gradually".
China is already seeing signs of a peak in some energy-intensive industries. Top steelmaker Baoshan Iron and Steel Group expects crude steel production - which requires huge amounts of coking coal and thermal power - to peak in 2018 at around 850 million tonnes and then taper off to around 700-800 million tonnes.
The ERI think tank has gone further, forecasting steel output declining by a quarter to 610 million tonnes by 2020. A construction slowdown could also cut cement production - another big coal consumer - by a third from 2013, ERI said.
China's overall energy demand is unlikely to peak until the late 2030s, which means coal-fired power will still need to grow despite a focus on new nuclear and renewable power capacity.
Bai Jianhua, an economist with the China State Grid Research Institute, said another 600 gigawatts of coal-fired power capacity will be needed between now and 2030-35, around three quarters of the current total.
But there wouldn't be a net increase in coal use as most of the additional capacity would replace less efficient direct use of coal by industry or for heating, which accounted for around 800 million tonnes of consumption last year.
China is expected to impose a cap on coal use when it issues its next five-year plan in 2016, but the scope is unclear.
"The five-year plan will certainly have such a cap, but the question is whether it will be legally binding or not," said Beijing-based Yang Fuqiang, policy researcher and senior advisor with the NRDC think tank.
(Additional reporting by Kathy Chen; Editing by Richard Pullin)