After reaching an all-time high in 2023, global coal demand is expected to fall by 2.3% by 2026, according to the latest edition of the International Energy Agency’s (IEA) annual coal market report.
IEA said this is the first time the report has predicted a drop in global coal consumption over its forecast period.
Coal 2023 said that the demand for coal rose by 1.4% in 2023, surpassing 8.5 billion tonnes for the first time; however, depending on the region. “Consumption is on course to decline sharply in most advanced economies in 2023, including record drops in the European Union and United States of around 20% each,” said IEA.
Meanwhile, demand in emerging and developing economies remains very strong, increasing by 8% in India and by 5% in China in 2023 due to rising demand for electricity and weak hydropower output, the report said.
‘’We have seen declines in global coal demand a few times, but they were brief and caused by extraordinary events such as the collapse of the Soviet Union or the Covid-19 crisis. This time appears different, as the decline is more structural, driven by the formidable and sustained expansion of clean energy technologies,” said Keisuke Sadamori, IEA Director of Energy Markets and Security.
“A turning point for coal is clearly on the horizon – though the pace at which renewables expand in key Asian economies will dictate what happens next, and much greater efforts are needed to meet international climate targets,” added Sadamori.
However, the coal demand and production in Asia is accelerating, IEA said. In 2023, China, India, and Southeast Asia are set to account for three-quarters of global consumption, up from only about one-quarter in 1990.
The consumption in Southeast Asia is expected to exceed for the first time that of the United States and that of the European Union in 2023.
Through 2026, India and Southeast Asia are the only regions where coal consumption is poised to grow significantly, explained IEA.
