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IEA: Global coal demand to decline in coming years

9 January 2024

After reaching an all-time high in 2023, global coal demand is expected to decline to 2026, according to the latest edition of IEA’s annual coal market report. It’s the first time the report has predicted a drop in global coal consumption over its forecast period.

According to Coal 2023, global demand for coal rose by an estimated 1.4% last year, surpassing 8.5 billion tonnes. However, the headline increase masked major differences among regions. Consumption in 2023 appeared to drop sharply in most advanced economies, declining by around 20% in both the European Union and the United States. Meanwhile, demand in emerging and developing economies remained strong – increasing by 8% in India and by 5% in China due to rising demand for electricity and weak hydropower output.

Even so, the report sees global coal demand falling 2.3% by 2026 compared with 2023 levels, even in the absence of governments announcing and implementing stronger clean energy and climate policies. The expected decline will be driven by the wave of renewable energy capacity coming online – particularly in China, which currently accounts for over half of the world’s demand for coal.

This could mark a historic turning point. Coal is currently the largest energy source for electricity generation, steelmaking and cement production, but also the largest source of carbon emissions from human activity. However, global consumption is forecast to remain well over 8 billion tonnes through 2026, according to the report. To drive down emissions at a rate consistent with the goals of the Paris Agreement, the use of unabated coal would need to fall significantly faster.

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