While politicians and members of industry remain optimistic that China's new coal tariffs will soon be rescinded, the outlook for exporters could still be gloomy as a result of Beijing's efforts to reduce the country's dependence on fossil fuels.

Beijing’s decision to raise tariffs on coking and thermal coals has blindsided Australian coal producers, particularly in light of ongoing efforts by the Abbott government to establish a free trade agreement with China.

China’s imposition of a three per cent tariff on coking coal and a six per cent tariff on thermal coal is enough to have a devastating impact on miners and exporters in Australia.

Independent analyst Peter Strachan said the new tariff regime would compound the difficulties experienced by coal miners Australia as a result of high costs and tepid prices, leaving many marginal operations unable to turn a profit,

“There are certainly some projects now that are running very close to the wind, and I think another impost like that would be enough to tip the balance in many cases,” he said.

The move has been broadly viewed as a protectionist measure on the part of Beijing, intended to placate the struggling domestic coal sector.

According to figures from the China Coal Industry Association, which has been lobbying aggressively for the tariffs since July, over 70 per cent of the country’s coal miners have suffered losses this year. Net profits for the industry as a whole plunged by as much as 46 per cent during the first eight months of 2014.

Leading figures in Australian industry and politics remain confident the tariffs will soon be unwound as Australia and China push forward with a free trade agreement, which Prime Minister Tony Abbott hopes to sign in November when President Xi Jinping visits Australia for the G20 summit.

Brendan Pearson, chief executive of the Minerals Council of Australia, expects the tariffs to be in place for as little as a month, and does not foresee any mine closures or job losses in the Australian coal sector to result.

Australian trade minister Andrew Robb shares Pearson’s optimism, expecting the tariffs to be dispatched by means of negotiation, in the same way Indonesia did as a result of the ASEAN-China trade agreement.

“We have been in discussions with the Chinese through the appropriate channels and we are continuing to push for tariff elimination,” said Robb.

Abbott also appears extremely confident about the future of coal, declaring at the recent opening of BHP’s $4.2 billion Caval Ridge coalmine in Moranbah that “coal is vital for the future energy needs of the world.”

“Let’s have no demonization of coal,” he said. “Coal is good for humanity.”

Despite Abbott’s confidence and optimism that the tariffs will soon be unwound, the long-term prospects for coal exports to China may not be so rosy given broader market trends.

Many analysts believe China is serious about long-vaunted plans to reduce its dependence upon fossil fuels in order to decouple CO2 emissions from economic growth.

The two chief motivations are the severe pollution that fossil fuels cause in the country’s major cities and attendant potential for popular unrest, as well as the security implications of reliance upon imported materials for energy.

A report released in September by the Carbon Tracker Initiative (CTI), a think tank specializing in the analysis of carbon investment risk, sees China’s demand for coal peaking as early as this year.

 “There are a host of signals that Chinese demand for coal is close to peaking which will cause a seismic shift in the market, “ said CTI CEO Anthony Hobley.

China is currently the world’s biggest consumer of coal, accounting for nearly half of global usage.

The report expects China’s demand for thermal coal to peak at some point between this year and 2016, which could leave the operations and asset values of export mines in Australia, Indonesia, South Africa and the United States hard hit.

The CTI’s findings are consistent with analysis produced by the Chinese government itself, with the National Development and Reform Commission, one of China’s leading policy bodies, anticipating the peak in coal demand to arrive as early as 2015.