New coal mines in the Australian Galilee Basin are not economically viable and are prone to become stranded assets

Science for society Coal is the most carbon-intensive fossil fuel, burning it produces more CO2 per unit of energy than any other fuel, and thus its continued use as an energy source contributes significantly to climate change. However, despite its negative environmental impacts, governments around the world continue to approve new coal mines, often citing economic benefits. Although the recent European energy crisis did indeed trigger a rise in coal prices, long-term profitability remains highly questionable, particularly in light of global climate policies and rapidly growing renewable energy infrastructure. Using a mathematical model, we assessed the economic viability of Australia’s Carmichael project (one of the largest new coal export projects in the world) and show that the project will not break even, even under a high-coal-demand scenario. Our findings demonstrate that short-term economic profitability is not sufficient justification to license future coal projects. Summary To limit the effects of climate change, we must significantly curtail the trading and use of coal as an energy source. Although the rise of renewable energy sources has already led to a reduction in the demand for and use of coal, new export-oriented coal mine projects are still being approved, and they often receive strong political support. However, whether these projects are economically viable remains questionable. Here, we leverage one of the largest new coal export projects in the world, the Carmichael project by Adani in the Galilee Basin, Australia, to assess the prospects of investments in coal exports. We use the COALMOD-World model in three scenarios with weak/moderate/strong climate policy ambitions. We find that new coal mines in the Galilee Basin and globally are not economically viable and are prone to become stranded assets due to climate policy and the increasing role of renewables, even in Asia, where the highest coal-demand growth exists. Our findings illustrate the irrational motivations for new coal mines, calling for a cease on coal investments that deliver neither climate nor economic benefits.