The International Energy Agency’s latest report forecasts a decline in global coal demand by 2026, marking a potential turning point in global energy consumption.
“Coal 2023” sees global demand for coal rising by 1.4% in 2023, surpassing 8.5 billion tonnes for the first time. But this is the first time that the IEA’s coal report has predicted a drop in global coal consumption over its forecast period.
The report highlights stark regional differences, with the EU and US experiencing record drops in coal use of around 20% each. Demand in Asia, meanwhile, remains strong, increasing by 8% in India and by 5% in China in 2023 due to rising demand for electricity and weak hydropower output.
The IEA expects global coal demand to fall by 2.3% by 2026 compared with 2023 levels, even in the absence of governments announcing and implementing stronger clean energy and climate policies. The major expansion of renewable energy capacity coming online in the three years to 2026 is going to drive the decline.
More than half of this global renewable capacity expansion is set to occur in China, which currently accounts for over half of the world’s demand for coal. As a result, Chinese coal demand is expected to fall in 2024 and plateau through 2026. Although global coal consumption is set to decline, it’s going to remain over 8 billion tonnes through 2026.
The report notes that the shift in coal demand and production is increasingly concentrated in Asia, with China, India, and Southeast Asia accounting for the majority of global consumption. This year, China, India, and Southeast Asia are set to account for three-quarters of global consumption, up from only about one-quarter in 1990. And India and Southeast Asia are the only regions where coal consumption is expected to grow significantly through 2026.
Keisuke Sadamori, IEA director of energy markets and security, said, “A turning point for coal is clearly on the horizon – though the pace at which renewables expand in key Asian economies will dictate what happens next, and much greater efforts are needed to meet international climate targets.”
The forecasted global decline in coal use, while significant, is going to require more aggressive actions to align with international climate targets.
Read more: Half the world is 5 years past a peak in fossil fuel power generation
Photo: “Pennsylvania – Scranton: Lackawanna Coal Mine” by wallyg is licensed under CC BY-NC-ND 2.0.
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