The world’s coal demand is on track to hit a record high this year as policy shifts, weather, and fuel prices have pushed higher consumption in regions previously thought to have leveled off, the International Energy Agency (IEA) said on Wednesday.
Global coal demand is on track to rise by 0.5% this year, reaching a record 8.85 billion tons, the IEA said in its annual Coal 2025 report.
For three years in a row, the agency has expected coal to have reached its peak, and global demand to begin levelling off, but various shifts in policies and weather-related consumption trends have defied the IEA forecasts.
This year, coal consumption has defied the most recent trends. An intense monsoon season in India, the world’s second biggest coal consumer, led to a decline in annual coal use for only the third time in five decades.
But in the United States, rising natural gas prices and policy measures to slow coal-fired plant retirements resulted in a rebound in coal consumption, which had been mostly falling for the past 15 years, the IEA said.
U.S. coal-fired power generation is set to rebound further in the winter months as surging natural gas prices prompt utilities to switch from gas to using more coal.
Even in the European Union (EU), coal demand slipped only slightly compared to two years of double-digit slumps, according to the IEA’s estimates.
China, the world’s top coal consumer, saw demand virtually unchanged this year compared to 2024 levels.
But it will be China and its power demand and energy transition pace that will determine the trajectory of global coal demand in the near to medium term, the agency noted.
In today’s report, the IEA expects global coal demand is tick lower by 2030, returning to the same level as in 2023. In 2023, global coal demand grew by 2.6% to 8.7 billion tons—not too lower compared to 8.85 billion tons expected in 2025.
“Should China see faster-than-expected growth in electricity consumption, slower integration of renewables, or strong investment in coal gasification, it could push global coal demand above the forecasts,” the IEA said in the 2025 report.
“Major uncertainties also persist globally over the pace of electricity demand growth in both advanced and developing economies, policy approaches, and the pace of coal substitution in certain sectors and regions.”
By Tsvetana Paraskova for Oilprice.com
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