Although regionally, demand for coal in developed economies is clearly on a downward trend, further growth in demand is very likely in some emerging economies. Therefore, global demand for this fossil fuel is forecast to remain broadly unchanged in 2025 compared to 2024 at around 8.7 billion tonnes.
The International Energy Agency (IEA) published such expectations based on analyzed coal industry data in its report.
Global coal demand grew 2.6% in 2023 to hit a new record, driven mainly by strong growth in China at 6%, or 276 million tonnes (Mt), and India (9.2%, or 105 Mt) in 8.7 billion tons. Increases in China and India more than offset significant declines in the European Union (-22.5% or -103 Mt) and the United States (-17.3% or -81 Mt).
Source: futurecoal.org
Coal consumption has increased both in power generation and in industry, with the metallurgical industry being the largest consumer. Electricity generation from coal grew by 1.9% in 2023 to 10,690 terawatt hours (TWh), setting a new record. As a result, coal continues to remain the largest source of global electricity production.
The electricity sector accounts for two-thirds of the global demand for coal. In most countries, demand for coal in the energy sector fluctuates more than in industrial sectors, mainly because there are fewer alternatives to the industrial use of coal. Thus, changes in global coal demand trends are mainly driven by the power sector. Specialists stated that the increasing impact of unpredictable extreme weather events makes it difficult to forecast the demand for electricity in the short term.
Analysts expect China's hydropower recovery, combined with significant wind and solar expansion, to moderate growth in coal-fired power generation globally in 2024, albeit with contrasting trends across regions.
Coal demand increased in both India and Vietnam in the first half of 2024 due to strong electricity demand and low hydropower generation. Meanwhile, India's economy is growing rapidly, which is contributing to an increase in industrial coal consumption. However, coal demand growth in India is expected to moderate in the second half of 2024, as exceptionally strong demand growth in the first half of the year was driven by exceptional weather conditions.
In the United States, where coal consumption has been declining since 2008, demand for coal has remained largely unchanged year-on-year. In the European Union, after a 22% decline in coal demand in 2023, IEA analysts expect a 19% decline in 2024, mainly due to the electricity sector, where renewables continue to expand and demand remains relatively weak.
Experts predict that global demand for coal will remain broadly unchanged throughout the year. However, weather conditions, economic activity, natural gas prices and other factors may cause slight fluctuations. This is especially true of China's electricity industry, a sector that accounts for a third of global coal demand.
At the end of June, EcoPolitic told that world coal consumption has reached historical maximum thanks to China and India.
