The International Energy Agency (IEA) expects global coal demand to remain stable this year and in 2025 as rising electricity demand in some major economies is forecast to offset the impacts of a growth in renewable energy capacity.
The Paris-based energy watchdog released its Coal Mid-Year Update on Wednesday and revealed that global coal consumption increased by 2.6% last year, reaching an all-time high.
This growth was primarily driven by significant increases in coal use in China and India, the world’s largest consumers, the report noted.
While China accounts for more than half of global coal consumption, coal demand in the EU has been on a downward trend since the late 2000s, largely due to emissions reduction efforts in power generation.
After falling by more than 25% in 2023, coal power generation in the EU is predicted to decline by almost as much this year.
China is reducing its coal consumption this year due to recovering hydropower and rapid solar and wind expansion. However, a projected 6.5% surge in electricity demand in China is likely to offset these gains and prevent a decline in coal consumption, the report said.
According to the report, India’s coal demand surged in the first half of 2024 due to record-breaking heatwaves, low hydropower generation and strong economic growth. However, coal demand is expected to moderate in the second half of the year as weather conditions normalize.
– Global coal output to fall
On the supply side, global coal production is expected to decrease slightly in 2024, the report noted.
While coal production in China is moderating, India continues to push for increased production, with a supply boost of approximately 10% expected this year, according to the report.
Keisuke Sadamori, the IEA director of energy markets and security, reiterated that based on current policy settings and market trends, global coal demand is expected to remain broadly flat through 2025.
‘The continued rapid deployment of solar and wind, combined with the recovery of hydropower in China, is putting significant pressure on coal use,’ Sadamori commented.
The demand outlook could change based on global electricity consumption figures, which are set to grow very strongly in several major economies, Sadamori said.
‘The structural trends at work mean that global coal demand is set to reach a turning point and start declining soon,’ he added.
