Global coal demand has reached record levels in 2024, driven by rising electricity consumption and significant growth in renewable energy, as noted by the IEA. Projected coal demand is 8.77 billion tons, with Asia, particularly China, leading consumption. While developed nations see a peak and subsequent decline in coal use, uncertainties surrounding weather and electricity needs may cause fluctuations in demand. Efforts to expand renewable energy sources could help manage future coal consumption growth.
Record Global Coal Demand Amid Climate Concerns
In a concerning development for climate change, the demand for coal worldwide has soared to unprecedented levels in 2024, marking it as the hottest year on record. According to the International Energy Agency (IEA), this surge is largely attributed to the robust growth of renewable energy sources, which are anticipated to stabilize coal usage through 2027.
The IEA’s annual report reveals that global coal demand is projected to hit 8.77 billion tons this year, with coal trade expected to reach an all-time high of 1.55 billion tons. Prices for coal remain significantly elevated, approximately 50% higher than the average seen from 2017 to 2019.
Asia’s Central Role in Coal Consumption
As 2024 marks a significant milestone, being the first year to exceed the 1.5°C warming threshold compared to pre-industrial levels, the report highlights a pattern of escalating coal demand. Last year’s record of 8.53 billion tons in 2023 already set a worrying precedent.
Keisuke Sadamori, the IEA’s director of energy markets, notes that despite a notable increase in electricity consumption, global coal demand is likely to stabilize until 2027. He emphasizes the transformative impact of clean energy technologies on the electricity sector, which is responsible for two-thirds of coal consumption globally. The pace of growth in electricity demand will play a crucial role in shaping future trends.
China remains a dominant force in the coal market, consuming one-third of the world’s coal, with rising demand also observed in emerging economies like India, Indonesia, and Vietnam. The IEA indicates that Asia is at the heart of international coal trade, with major importing nations including China, India, Japan, Korea, and Vietnam, while Indonesia and Australia lead in exports.
In contrast, advanced economies have reached peak coal demand, which is expected to decline until 2027. The IEA stresses that the rate of this decline will hinge on the implementation of ambitious energy policies and the availability of alternative energy sources such as affordable natural gas in the U.S.
Despite the grim outlook, the IEA points to the significant deployment of renewable energy, particularly in China, as a potential factor that could mitigate coal consumption growth even amidst rising electricity demands. The expansion of nuclear energy and substantial investments in solar and wind power are steps taken by Beijing to diversify its energy portfolio.
However, Sadamori warns that weather conditions, especially in China, will heavily influence short-term coal demand fluctuations. The IEA acknowledges the presence of considerable uncertainties in its analysis, noting that increased electricity consumption from sectors such as transportation, heating, and data centers may complicate coal demand projections.
Due to these uncertainties, coal demand in China could either rise or fall by as much as 140 million tons by 2027, indicating the potential for either a decline in coal reliance or an unexpected surge.