The International Energy Agency‘s latest 2024 coal report said that global coal consumption will reach 8.77 billion tons this year, setting a record high for the third consecutive year. Previously, the International Energy Agency predicted that global coal consumption would peak last year. However, the IEA’s latest forecast shows that by 2027, global coal demand will rise to 8.77 billion tons, about 1% higher than the level in 2024. This overturns the IEA’s estimate last year that coal demand will begin to decline steadily this decade. To achieve net zero emissions by 2050 and limit global warming in accordance with the Paris Agreement, coal use needs to fall sharply this decade. The earth’s temperature may already be 1.5 degrees Celsius above pre-industrial levels, which shows that collective climate action is failing.
The IEA report points out that as wind turbines and solar panels are rapidly deployed everywhere, demand for coal will weaken, but even the record pace of clean energy deployment will not be enough to stop the growth of coal, let alone reverse it.
Coal Consumption in Different Regions Presents Different Situations
Current coal prices are still 50% higher than the average price from 2017 to 2019. Coal production reached an all-time high in 2024, but as structural changes are implemented, coal production growth is expected to stabilize by 2027. The report also stated that coal consumption in different regions of the world is uneven. Coal consumption in developed economies continues to decline, but coal consumption in emerging economies such as China, India and Indonesia continues to grow. Electricity use is growing rapidly in many countries, including China, due to a range of factors, including the electrification of services such as transportation and heating, increased demand for cooling, and increased electricity use in emerging industries such as data centers. In addition, weather patterns may also cause fluctuations in coal consumption in the short term.
According to the report, China’s coal demand could be 140 million tonnes higher or lower than forecast by 2027 due to weather-induced variations in renewable energy generation. At the same time, coal demand is still growing in some emerging economies where electricity demand is rising sharply as their economies and populations grow, such as India, Indonesia and Vietnam. Growth in emerging economies is driven primarily by coal demand in the power sector, although industrial use is also increasing. India’s coal consumption is expected to increase by more than 5% to 1.3 billion tonnes in 2024, exceeding the combined total of the European Union and the United States.
In most advanced economies, coal use has peaked and is expected to continue to decline by 2027. The pace of its decline will continue to depend on the enactment of strong policies, such as those implemented in the European Union, and the availability of alternative energy sources, including cheap natural gas in the United States and Canada. Coal consumption in the European Union and the United States is expected to fall by 12% and 5% respectively this year, compared with declines of 23% and 17% last year, respectively, and coal consumption is declining at a slower pace.
Asia Has High Coal Consumption
The report notes that while global coal consumption hit a record high, global coal production also hit a record high and exceeded 9 billion tons for the first time. Among them, China, India and Indonesia all broke their own national records in coal production. According to global coal trade data, the current international coal price is 50% higher than the average from 2017 to 2019. Global coal trade volume will reach 1.55 billion tons this year, also a record high. Asia is the global coal trade hub. Asian countries including China, India, Japan, South Korea and Vietnam are the world’s largest coal importers, while the world’s largest coal exporters are Indonesia and Australia.
Coal is the fossil fuel with the highest carbon emission intensity. As global coal consumption hits a record high, this year is also likely to break last year’s record and become the world’s hottest year on record again. Earlier this month, the European Copernicus Climate Change Agency announced that based on the temperature data for the first 11 months of this year, it is basically certain that 2024 will be the hottest year since records began in 1850.
Need to Actively Promote Asia’s Energy Transformation
In response to Asia’s high coal consumption, the Energy Transition Engineers Association, which provides independent advice to the UN Secretary-General, released a report last month saying that 78% of the world’s coal power plant capacity is concentrated in Asia. The report calls for actively promoting Asia’s energy transformation from both policy and technical aspects. Sadamori, director of energy market security at the International Energy Agency, said that two-thirds of the world’s coal is used for power generation. As clean energy technology accelerates, global coal consumption is expected to reach a peak by 2027, despite the rapid increase in global electricity consumption.
The report said that while coal demand is expected to jump, its current share of the global power structure has fallen to a minimum of 35%, as strong growth in renewable energy supply helps countries meet energy needs. “The rapid deployment of clean energy technologies is reshaping the global power industry, which accounts for two-thirds of global coal use. As a result, our model shows that global coal demand will stabilize by 2027 despite a sharp increase in electricity consumption,” said Keisuke Sadamori, director of the Energy Market and Security Department of the International Energy Agency. “However, weather factors – especially in China, the world’s largest coal consumer – will have a significant impact on short-term trends in coal demand. The pace of electricity demand growth will also be very important in the medium term.”
International coal trade will also reach a record 1.55 billion tons in 2024. Looking ahead, global trade volumes will shrink, with thermal coal seeing the largest decline. According to the report, Asia remains the center of international coal trade, with all of the region’s largest importers, including China, India, Japan, South Korea and Vietnam, while the largest exporters include Indonesia and Australia.
