Global coal demand forecasted to stagnate into 2025

The International Energy Agency (IEA) say coal consumption this year and the next is balanced by the gap created by low hydropower output and rapidly rising electricity demand.

The IEA’s Coal Mid-Year Update shows global use reached an all time high in 2023. The 2.3% increase was driven by the two largest consumers – India and China. Weather conditions, low-hydropower generation and greater electricity demand were the primary causes for this increase.

Coal demand is still on the decrease in Europe, however, falling by a quarter in 2023. A similar drop is expected this year, the report finds. A similar trend is seen in the US, Japan and Korea.

Global electricity demands continue to grow, fuelling coal usage. As Keisuke Sadamori, IEA Director of Energy Markets and Security outlined, ‘Without such rapid growth in electricity demand, we would be seeing a decline in global coal use this year’.

In regards to production, the report finds the market is still well supplied despite declining production in China in the first half of 2024, tighter sanctions on Russian producers and disruptions in a few exporting countries.

Sadamori expects a decline in demand is around the corner. ‘The structural trends at work mean that global coal demand is set to reach a turning point and start declining soon’.