Global Coal Demand Peaks, Potential Decline Expected by 2030
The demand for coal is anticipated to peak and then decline by 2030, according to the International Energy Agency (IEA). This shift stems from growing competition with other energy sources such as renewables, natural gas, and nuclear power. The IEA’s latest report, titled “Coal 2025,” provides insights into the global coal market, examining trends in demand, supply, and trade up to 2030.
Global Coal Demand Forecast
The report indicates a slight increase in global coal demand by 0.5% in 2025, projecting it to reach 8.85 billion tonnes. However, by 2030, overall demand is expected to drop back to 2023 levels.
- 2025 Demand: 8.85 billion tonnes (up 0.5%)
- 2030 Demand: Expected decline to 2023 levels
Regional Consumption Trends
Consumption patterns have varied significantly across major coal markets. Key highlights include:
- India: Experienced a rare decline in coal use due to an intense monsoon season, marking only the third reduction in fifty years.
- United States: Higher natural gas prices helped increase coal consumption after a long-term decline.
- European Union: Saw only a modest reduction in coal use after two years of considerable decreases.
- China: Coal use remained stable compared to 2024 levels, with expectations for a slight decline by 2030.
Challenges and Future Projections
The shift toward renewable energy sources is a significant factor impacting coal consumption, as renewables currently account for two-thirds of coal use. The IEA predicts a decline in coal-fired generation starting in 2026. However, coal demand from industries remains stable.
By 2030, significant changes are expected in various regions:
- India: Projected coal demand increase of 3% per year, totaling over 200 million tonnes.
- Southeast Asia: Anticipated to see the fastest growth in coal demand, increasing by over 4% per year.
Conversely, should China experience a surge in electricity consumption or if coal gasification investments rise, global demand might exceed forecasts.
Trade Dynamics and Supply Changes
China’s reduction in coal imports in 2025 is likely to affect global coal trade negatively, especially as demand remains sluggish. Expected outcomes include:
- Fall in worldwide coal trade.
- Stronger prospects for metallurgical coal due to India’s steel industry reliance on imports.
Most major coal-producing nations are projected to see declines in coal output by 2030, including China and Indonesia, while India aims to boost production to reduce its import dependence.
In conclusion, as the energy landscape evolves, global coal demand is set for a peak followed by a gradual decline. Factors influencing this shift will include changes in consumption patterns, policy decisions, and the integration of renewable energy sources worldwide.
