The International Energy Agency (IEA) has projected a record-high global coal consumption in 2023, driven by robust demand in emerging and developing economies. According to the report released on Friday, coal demand is expected to rise by 1.4 percent, surpassing 8.5 billion tonnes for the first time. This growth is attributed to an 8 percent increase in India and a 5 percent increase in China, fueled by rising electricity demand and weakened hydropower output.
Despite being a major contributor to CO2 emissions and global warming, coal remains a crucial energy source, with China alone accounting for half of the world’s coal use. The IEA emphasizes that the trajectory of coal use in the coming years will hinge on factors such as the pace of clean energy adoption, weather conditions, and structural changes in the Chinese economy.
Conversely, the report anticipates a 20 percent decline in coal use in both the European Union and the United States this year. Russia, the fourth-largest coal consumer, presents challenges in forecasting due to the ongoing conflict in Ukraine. The IEA projects that global coal consumption will persist until 2026, with a potential 2.3 percent reduction compared to 2023 levels, primarily driven by a major expansion of renewable capacity.
However, the report underscores that to align with the goals of the Paris climate agreement, which aims to phase out fossil fuels in favor of renewable energy, unabated coal use must decrease at a faster rate. While world leaders at the recent COP28 climate talks in Dubai reached an agreement emphasizing a transition away from fossil fuels, it falls short of a complete “phase-out,” as more than 100 nations had advocated. Instead, the agreement calls for a just and equitable transition away from fossil fuels in energy systems, accelerating actions in the critical decade ahead.
Global coal use
China is poised to be a major driver of global renewable expansion, contributing to over half of the anticipated growth over the next three years, as outlined by the International Energy Agency (IEA). This significant shift is predicted to lead to a decline in coal demand in China by 2024, with a subsequent plateau expected through 2026.
Considering that half of the world’s coal use is attributed to China, the trajectory of coal consumption in the coming years will be profoundly influenced by factors such as the speed of clean energy adoption, weather conditions, and structural changes in the Chinese economy, according to the report.
Currently, China, India, and Southeast Asia are projected to contribute to three-quarters of global coal consumption in the present year, marking a notable increase from a quarter in 1990. The report highlights that coal consumption in Southeast Asia is expected to surpass that of the United States and the European Union in 2023.
Looking ahead to 2026, the IEA foresees that India and Southeast Asia will be the only regions where coal consumption experiences significant growth. This underscores the evolving landscape of energy consumption, with a notable shift toward renewable sources and a reduction in reliance on coal in key regions.