(Bloomberg) — Donald Trump vowed to revive the coal industry, but it’s President Joe Biden who’s seeing a big comeback of the dirtiest fossil fuel.

U.S. power plants are on track to burn 23% more coal this year, the first increase since 2013, despite Biden’s ambitious plan to eliminate carbon emissions from the power grid. This rebound is after utilities consumption plunged by 36% under Trump’s unsuccessful attempt to increase the fuel.

That’s going to increase emissions at a time when Biden and other world leaders prepare to gather in Scotland in a few weeks, hoping to reach a deal on curbing fossil fuels in a last-ditch effort to save the world from climate change. The boom is being driven by surging prices and a global energy crisis that’s forcing countries to burn dirtier fuels to keep up with demand. It’s also a stark reminder that government policy can steer energy markets, but it can’t control them. 

“Over the short term, the market will always dominate,” said Jeremy Fisher, senior adviser for the Sierra Club’s environmental law program.

The world is recovering from the coronavirus epidemic, and reopening countries are fueling a massive rebound in power demand. However, natural gas is not in sufficient supply. This creates shortages when winds and hydro are unreliable. Europe and Asia have been hit the worst, with skyrocketing markets, blackouts in places like India, power shortages in China and the threat of outages in other countries. Although not at the same level, energy prices in the United States are on the rise.  

The situation is driving up coal demand around the world, and in the U.S., utilities are cranking up aging power plants and miners are digging up as much as they can. 

After falling to 20% in 2020 and 24% this year, coal supply will be approximately 24%. This is an unprecedented shift after decades of attempts to move utilities towards clean power. This resurgence could be even more dramatic when Wednesday’s Energy Department report is released. 

`Markets Have Spoken’

“The markets have spoken,” said Rich Nolan, chief executive officer of the National Mining Association. “We’re seeing the essential nature of coal come roaring back.”In 2021, the U.S. utilities are poised to burn 536.9 million short tons of coal, up from 436.5 million in 2020, the Energy Information Administration forecasts.

The price of coal from central Appalachia has increased 39% to $75.50 per ton since the beginning of 2019, the highest level since May 2019. The prices in other areas are also rising, although they may be lower.

Fossil Fuels Redeemed in a World Fighting Climate Change

Demand for coal will likely remain strong into next year, said Ernie Thrasher, CEO of Xcoal Energy & Resources, the biggest U.S. exporter of the fuel. Supply is already constrained, and Thrasher said he’s hearing some utilities express concern that they may face fuel shortages over the next several months as colder weather pushes energy demand higher to heat homes. 

“It won’t be easy this winter,” he said.

Kevin Book, managing director of research firm ClearView Energy Partners, said the current crisis has added fodder to the debate over efforts to move away from coal.

“The goal of policy, if you listen to what’s being said in Western countries in the context of climate discussions, is not only to stop building new coal but to eliminate the existing capacity to burn coal,” Book said. “This is a moment in time when that idea is going to be challenged.”

Is this a short-lived boom

The coal boom may seem dramatic but it could be temporary. 

Global pressure to curb carbon emissions remains strong, and in the long-term, “policy absolutely matters,” said Cara Bottorff, a senior energy sector analyst at the Sierra Club.

Global Energy Crisis Signals The Fragility Of Clean-Power Era

Trump’s policies saw a drop in coal consumption. This was largely due to utilities switching to natural gas which is much cheaper and embracing renewables, as solar and wind costs fell. His predecessor Barack Obama made key policy choices that led to this decline. Trump tried to revitalize the industry but legal issues and an uncertain regulatory environment prevented long-term investment in coal.

B. Riley Securities reports that coal mining has declined 40% and coal generating capacities have fallen by 40% over the six-year period.   

Similarly, Biden’s policies will likely eventually lead to further reductions in coal use. He’s pursuing structural changes including tax incentives and new market rules that will drive decisions at energy companies.

“The transition is well underway, but it won’t be over tomorrow,” said Dennis Wamsted, an analyst for the Institute for Energy Economics and Financial Analysis.

Bloomberg LP is the majority shareholder and founder of Bloomberg News. He has committed $500 Million to Launch Beyond Carbon. This campaign aims at closing all remaining U.S. coal-powered power plants by 2030.

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