For the past decade, coal has been the fuel the world was trying to forget.
Climate agreements, green energy targets, ESG mandates, net-zero pledges — the entire direction of global energy policy pointed one way: away from coal.
Power plants were being decommissioned. Investment was drying up. The obituaries were being written.
Then two things happened simultaneously: a war in the Middle East, and a sharp shift in US energy policy.
Trump and the coal trophy
In February, President Trump received a trophy declaring him the “Undisputed Champion of Beautiful Clean Coal”. He accepted it surrounded by coal executives and miners at the White House – and he wasn’t just being theatrical.
In that same month, he ordered the Department of Defence to purchase billions of dollars’ worth of power from coal plants, announced $175 million in funding to upgrade coal facilities in four states, and directed the EPA to roll back Biden-era pollution standards that would have required coal plants to limit emissions of mercury and other heavy metals by 2027.
The policy shift is significant. Before Trump took office, coal faced a wall of headwinds: climate regulations, pollution rules, cheaper solar and wind, and relatively affordable natural gas.
The last one – natural gas – is particularly striking. Because what’s happening in the Middle East has just made gas dramatically more expensive, and far less reliable.
When the gas runs out, you burn coal
Natural gas was supposed to be the world’s transition fuel – cleaner than coal, affordable, reliable. It was the bridge that developing nations were promised on the road to renewables.
That bridge has now been badly damaged twice in four years: first by Russia’s invasion of Ukraine, and now by the Iran conflict effectively shutting down the Strait of Hormuz.
For Asia, which buys more than 80% of the crude and LNG that flows through that narrow waterway, the consequences have been swift – severe fuel shortages, export bans, and government budgets stretched to the breaking point.
Thailand is restarting two coal plants it decommissioned last year. South Korea has removed its 80% operating cap on coal-fired generation. Japan is lifting caps on coal power output, allowing older and less-efficient plants to run at full capacity for up to a year from April.
Coal prices are surging…
From around $101 per ton at the start of the year to approximately $140 per ton – a nearly 40% increase in just a few months.
For context, during the post-Ukraine energy shock in 2022, coal briefly spiked above $420 per ton. So, we’re not at crisis extremes yet. But the direction is clear, and the driver is structural rather than speculative.
What also makes coal particularly interesting right now is very few producers are opening new mines or ordering new equipment. The volatility is too high and the long-term political environment too uncertain to justify major capital commitments.
Surging demand. Constrained supply. No new investment to bridge the gap. That combination is exactly the environment where existing producers see margins expand dramatically.
Just remember: This is a crisis trade with real momentum behind it, not a permanent structural shift.
The energy transition hasn’t been cancelled – it’s been disrupted. But disruptions can last long enough to matter enormously for investors positioned in front of them.
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