This year, global coal demand reached an all-time high. Demand will also remain at or near record highs in the coming years. The International Energy Agency (IEA) reached this conclusion in a report released on Friday.
Global coal demand is anticipated to increase by 1.2% to more than 8 billion tons. It is the first time in history that this record will be broken. Based on current market trends, coal consumption will remain elevated until 2025. Robust demand in Asia’s emerging economies offset coal consumption declines in developed economies. The IEA reports that coal will remain the largest source of carbon emissions from the global energy system.
Due to the global energy crisis, higher natural gas prices have led to increased coal consumption in power plants. Both declining economic growth and industrial production have reduced electricity demand. The production of green energy has also reached record heights. Nevertheless, the demand for coal has continued to increase.
A summer heat wave and long periods of drought in China, the world’s largest coal consumer, led to an increase in the use of coal-fired power plants to run air conditioners, among other things.
“The world is nearing a peak in its use of fossil fuels, with coal the first to decline, but we are not there yet,” said Keisuke Sadamori, director of Energy Markets and Security at the International Energy Agency. “Demand for coal is persistent and is projected to reach a record high this year, contributing to an increase in global emissions. Moreover, there are numerous indications that the current crisis hastened the deployment of renewable energy, energy efficiency, and heat pumps. Due to that, demand for coal will moderate over the next few years.”
The three largest coal producers, China, India, and Indonesia, are all producing more coal than ever. Despite high coal prices and substantial profit margins for coal producers, there is no indication of increased investment in large export coal projects, according to the IEA report. The decline in investments demonstrates that investors and mining companies are wary of the medium- and long-term prospects for coal.
The International Energy Agency (IEA) anticipates a decline in coal consumption in developed economies as renewable energy increasingly displaces coal power in the coming years. However, in emerging and developing nations, coal consumption will continue to rise in the coming years.