Coal once powered steam trains and within decades it could be fuelling cars and trucks, ending Australia's dependence on oil imports. Synthetic fuel extracted from coal is being considered for use as a low carbon emitting substitute for petrol. It has been estimated up to 20 per cent of Australia's transport fuel needs could be supplied from coal by 2050.
 

Twelve months ago – as the first official act of the newly elected Rudd Government - Australia ratified the Kyoto Protocol. Now, Australia is taking another important step on the path to a low carbon future. On 15 December the Australian Government released its policy ‘White Paper' on the Carbon Pollution Reduction Scheme. The White Paper sets out Australia's medium and long-term emissions reduction goals and the design of Australia's emissions trading regime, the primary vehicle to achieve those goals.

Theoutlook for Australia's coal exporters has continued to weaken, with reports of further falls in contract thermal coal prices. Japanese newsletter The Tex Report said first coal contracts for Japan's next financial year had been signed, with utilities getting coal at the export port at between $US70 and $US80 a tonne -- up to a 45 per cent discount from this year's price.

The coal industry is concerned it will not get enough financial assistance out of emissions trading. Under the federal government's plan released on Monday, coal mining companies will get $750 million to adjust to the scheme. There is also assistance worth $3.9 billion to coal-fired electricity generators. Ralph Hillman, executive director of the Australian Coal Association, said on Tuesday the plan was "a step in the right direction" but the coal industry should get more assistance.

The Federal Minister for Resources and Energy, Martin Ferguson AM MP and the Victorian Minister for Energy and Resources, Peter Batchelor, welcome news that detailed monitoring of the Otway Basin Project reveals CO2 has been successfully injected two kilometres underground and is behaving as predicted. Operated by the Cooperative Research Centre for Greenhouse Gas Technologies and funded in part by the Federal ($25 million) and Victorian ($6 million) governments, the Otway Project in south-western Victoria is the world's largest demonstration of geological storage of CO2.

Australia cut its thermal coal exports growth forecast to just one per cent next year after nine per cent rise this year due to infrastructure constraints at the world's second-biggest exporter. ABARE said contract prices for thermal coal were likely to fall from April when the current set of contracts runs out, as the financial crisis weakens demand, supplies rise and the Australian dollar stays weak.

Exports from Australia's Newcastle coal port, the world's largest, could double under a state government expansion plan, Port Waratah Coal Services Pty, one of the operators at the port said on Friday. The proposal by the New South Wales state government calls for a fourth terminal, potentially doubling the capacity to export coal, Port Waratah said in statement.

When trading currencies, you are taking a view on a country. Therefore, the source of that country's wealth has a direct impact on its growth prospects and, by extension, the value of its currency. For example, the lifeblood of Australia is gold and coal. As the world's third-largest producer of gold and fourth-largest producer of coal, the values of these commodities have a direct impact on the value of the Australian dollar.