Global coal demand seen to remain steady through 2025

This was despite the expansion of renewable energy.

Demand for coal across the world will be unchanged this year until 2025 as the increasing demand for electricity in major economies offset the impact of solar and wind power expansion, as well as the recovery of hydroelectric power, according to the International Energy Association (IEA).

In its Coal Mid-Year Update, IEA said the use of coal increased by 2.6% in 2023 globally, which was an all-time high, driven by major consumers China and India.

Keisuke Sadamori, IEA director of energy markets and security, said “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,” he added.

Meanwhile, global coal production is seen to slightly decrease in 2024 after steady growth the year before. 

Production in China is moderating in 2024 after two years of staggering growth. The case is different in India where an increase of around 10% is expected this year. In other advanced economies, production is in decline, broadly reflecting demand.

The IEA report also noted that trade volumes are at the highest levels ever seen despite the collapse of imports in Europe and the decline in imports in Northeast Asia since 2017. This year, Vietnam is set to become the fifth largest coal importer, surpassing Chinese Taipei, whilst imports to China and India remain at all-time highs.

IEA said the global coal market remains well supplied despite declining production in China, tighter sanctions on Russian producers, and disruptions in a few exporting countries.

“With more stable natural gas prices than in recent years, coal prices remained range-bound in the first half of 2024. They have returned to levels last seen before the global energy crisis but remain elevated due to inflationary pressures,” the report said.