AUS
NZ
UK
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IND
Highlights:
- Global coal consumption in 2024 is forecast to reach a record 8.77 billion tonnes due to lingering gas supply issues.
- Increased demand in China and India is offsetting declining usage in the US and Europe.
- Renewable energy expansion is projected to stabilize coal demand through 2027, despite rising electricity needs.
Coal consumption worldwide is set to reach an all-time high this year, with global usage predicted to hit 8.77 billion tonnes, according to a report by the International Energy Agency (IEA). This surge in demand is attributed to ongoing disruptions in gas supply stemming from the geopolitical fallout of Russia’s invasion of Ukraine.
The report highlights that coal production has also reached record levels, driven by elevated gas prices and heightened energy needs across developing and industrialized nations. The IEA’s outlook suggests that global coal demand will plateau near these record levels until at least 2027.
Regional Variations in Coal Usage
While global coal demand remains robust, regional differences are emerging. In China, coal usage continues to grow, with a 1% increase forecast for this year. India is experiencing even faster growth, with a projected 5% rise in demand to 1.3 billion tonnes, bringing it closer to matching China's consumption levels.
Conversely, the US and Europe are seeing sharp declines in coal use, with reductions of 5% and 12%, respectively, as these regions accelerate their transition to cleaner energy sources. The UK, for instance, recently marked the closure of its last coal-fired power station in September, underscoring the shift away from fossil fuels.
Renewable Energy and the Future of Coal
Despite the current surge, the IEA predicts that the rapid deployment of renewable energy technologies will gradually stabilize global coal demand. Clean energy sources, including wind and solar, are expected to absorb much of the increasing electricity demand in developing nations, preventing further growth in fossil fuel consumption.
Keisuke Sadamori, the IEA’s director of energy markets and security, remarked, “The rapid deployment of clean energy technologies is reshaping the global electricity sector, which accounts for two-thirds of the world’s coal use. Our models show global demand for coal plateauing through 2027 even as electricity consumption rises sharply.”
Implications for Global Producers
The sustained demand for coal has significant implications for major producers like Glencore PLC (LSE:GLEN). The company, one of the largest coal producers outside China, saw its shares ease slightly by 0.5% to 361p following the IEA report.
While the coal sector continues to thrive in the short term, producers face increasing pressure to adapt to the global shift towards cleaner energy sources. The balancing act between meeting current demand and investing in future sustainability remains a critical challenge for the industry.
Outlook
As renewable energy continues to expand, the IEA’s findings suggest that coal’s role in the global energy mix will stabilize rather than grow. This transition period will likely be marked by regional disparities, with developing nations driving demand while industrialized countries pursue decarbonization efforts.
The coal industry remains pivotal to meeting immediate energy needs, but its long-term future will be shaped by the accelerating pace of clean energy adoption and international climate commitments.
