After reaching a new high in 2024, global demand for coal is set to level off in the coming years as a surge in renewable power helps to meet soaring demand for electricity around the world, the International Energy Agency (IEA) revealed on Wednesday.
Coal 2024 – the new edition of the IEA’s annual coal market report, which analyses the latest trends and updates – shows that global coal use has rebounded strongly after plummeting at the height of the Covid-19 pandemic. “It is poised to rise to a record 8.77 billion tonnes in 2024.”
According to the report, demand is set to stay close to this level through 2027 as renewable energy sources play a greater role in generating power and coal consumption levels off in China.
The electricity sector in China is particularly important to global coal markets, with one out of every three tonnes of coal consumed worldwide burned at a power plant in the country, the report indicated.
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Electricity use in a number of countries, including China, is growing at a strong pace due to a combination of factors, including the electrification of services like transport and heating, rising demand for cooling, and increasing consumption from emerging sectors such as data centres.
Additionally, weather patterns could drive fluctuations in coal consumption in the short term. According to the report, coal demand in China by 2027 could be up to 140 million tonnes higher or lower than forecast due to weather-related variability in renewable generation.
“The rapid deployment of clean energy technologies is reshaping the global electricity sector, which accounts for two-thirds of the world’s coal use. As a result, our models show global demand for coal plateauing through 2027 even as electricity consumption rises sharply,” said IEA Director of Energy Markets and Security Keisuke Sadamori.
“However, weather factors – particularly in China, the world’s largest coal consumer – will have a major impact on short-term trends for coal demand. The speed at which electricity demand grows will also be very important over the medium term.”
In most advanced economies, coal demand has already peaked and is expected to keep decreasing through 2027, the agency pointed out.
Meanwhile, demand for coal is still increasing in some emerging economies, especially in Asia, where electricity demand is rising sharply along with economic and population growth, in countries such as India, Indonesia and Viet Nam.
