Global coal demand is expected to remain stable in 2024 and 2025, as rising electricity needs in major economies balance out the effects of increased renewable energy and recovering hydropower.
That’s according to the latest report by the International Energy Agency (IEA), which suggests increased electricity consumption in key economies like China and India continues to drive coal use.
In 2023, global coal consumption rose by 2.6% to reach a record high, primarily due to strong demand in China and India.
Both countries increased their coal use to compensate for low hydropower output and rising electricity needs.
In China, where over half of the world’s coal is consumed, coal demand is expected to remain high in 2024 due to a forecasted 6.5% increase in electricity demand, despite a recovery in hydropower and growth in solar and wind energy.
Similarly, in India, coal demand surged in early 2024 due to extreme weather and high electricity consumption but is expected to slow as conditions normalise.
In contrast, coal use in Europe continues to decline due to efforts to reduce emissions, with a further significant drop expected this year.
After a decline of over 25% in 2023, coal power generation in the EU is expected to fall by nearly the same amount again this year.
The US also shows a trend of reduced coal use, though stronger electricity demand may slow this decline.
Japan and South Korea are also reducing their coal reliance, though at a slower pace.
Keisuke Sadamori, IEA Director of Energy Markets and Security, said: “The continued rapid deployment of solar and wind, combined with the recovery of hydropower in China, is putting significant pressure on coal use.
“But the electricity sector is the main driver of global coal demand, and electricity consumption is growing very strongly in several major economies.
“Without such rapid growth in electricity demand, we would be seeing a decline in global coal use this year. And the structural trends at work mean that global coal demand is set to reach a turning point and start declining soon.”
