Global coal consumption to hit record this year, driven by demand in China, says IEA

Global coal consumption is set to hit a record this year. Demand remains high in emerging economies such as China, India and Indonesia. The International Energy Agency (IEA) reports this in its report published today. Coal consumption is not expected to fall until 2026.

Coal demand is expected to rise by 1.4 percent in 2023, surpassing 8.5 billion tonnes for the first time. Consumption is estimated to increase by eight percent in India and five percent in China.

According to the IEA, the rise is driven by growing electricity demand and weak output from hydropower plants. However, coal consumption in the European Union and the United States will fall by around 20 percent in 2023, the report says.

Coal consumption is not expected to fall until 2026, in response to a significant expansion of renewable capacity. Renewables are expected to help reduce consumption by 2.3 percent over the next three years compared with 2023. This is expected even in the absence of decisive policies to promote clean energy.

However, the IEA forecast shows global coal consumption remaining well above eight billion tonnes in 2026. It says coal use would have to fall much faster to meet the targets set out in the Paris Agreement.

China is expected to account for more than half of the global expansion of renewables over the next three years. This will lead to a drop in coal demand in the country in 2024 and its stabilisation by 2026. China accounts for half of global coal consumption, so the outlook for coal in the coming years will be strongly influenced by the pace of clean energy deployment, weather conditions and structural changes in the Chinese economy, the report says.

This year, China, India and Southeast Asia are expected to account for three-quarters of global coal consumption, compared with just one-quarter in 1990. Consumption in Southeast Asia is expected to overtake that of the United States and the European Union in 2023.

By 2026, India and Southeast Asia are the only regions where coal consumption is expected to grow significantly, the report says.

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