Global Coal Demand Hits Record in 2024, Set to Plateau Amid Renewable Energy Surge
Global coal demand is expected to plateau in the coming years after reaching a record high in 2024, according to the International Energy Agency’s (IEA) Coal 2024 report. The findings underscore the growing role of renewable energy in meeting global electricity demands and a gradual structural shift in the energy landscape.
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Coal’s Resurgence in 2024
After a sharp decline during the COVID-19 pandemic, coal consumption rebounded significantly, reaching an unprecedented 8.77 billion tonnes in 2024. This resurgence was driven by continued reliance on coal in major markets like China and persistently high global energy demand. However, the IEA projects that coal use will plateau near this peak through 2027 as the global transition to renewable energy accelerates.
Coal remains the dominant energy source for electricity generation, accounting for two-thirds of global consumption. Developing economies such as India, Indonesia, and Vietnam are expanding coal use to meet surging electricity needs, while advanced economies are gradually reducing their reliance on the fossil fuel.
China’s Decisive Role in Global Coal Demand
China, which accounts for one-third of global coal consumption, plays a pivotal role in shaping coal market trends. The IEA notes that China’s coal demand in 2027 could vary by as much as 140 million tonnes depending on weather-driven fluctuations in renewable energy output.
China is actively diversifying its energy mix through investments in nuclear power and rapid expansion of solar photovoltaic (PV) and wind capacity. However, urbanization, industrial growth, and increasing electricity demand—fueled by the electrification of transport and heating—may complicate efforts to curb coal reliance.
Keisuke Sadamori, IEA Director of Energy Markets and Security, stated:
“The rapid deployment of clean energy technologies is reshaping the global electricity sector, which accounts for two-thirds of the world’s coal use. However, weather factors—particularly in China, the world’s largest coal consumer—will have a major impact on short-term trends for coal demand.”
Regional Dynamics in Coal Consumption
Advanced Economies
Coal demand in developed nations has already peaked and is projected to continue its decline through 2027. This trend is supported by strict climate policies, such as the European Union’s decarbonization agenda, and the availability of competitive alternatives like natural gas in North America.
Emerging Economies
In contrast, emerging economies such as India, Indonesia, and Vietnam are experiencing substantial growth in coal demand. Economic expansion, population growth, and rising electricity consumption drive coal’s dominance in power generation and industrial processes within these regions.
Coal Trade Trends
International coal trade is forecast to reach a record 1.55 billion tonnes in 2024, with Asia dominating both imports and exports. Major consumers like China, India, Japan, South Korea, and Vietnam rely heavily on shipments from key exporters, including Indonesia and Australia.
However, global coal trade volumes are expected to shrink after 2024, particularly for thermal coal, as countries prioritize renewable energy and seek energy independence.
Price Pressures and Production Outlook
Coal prices remain elevated, averaging 50% higher than pre-pandemic levels from 2017 to 2019. Despite record-high production in 2024, the IEA predicts production growth will stabilize through 2027 as renewable energy adoption accelerates and global coal demand plateaus.
Key Uncertainties and the Path Ahead
The IEA highlights several uncertainties that could impact coal’s trajectory, including weather patterns, policy changes, and the speed of renewable energy adoption. While the structural shift in the energy sector suggests a plateau in coal use, emerging economies’ demand and short-term market dynamics could still disrupt this trend.
As Sadamori emphasized, “The speed at which electricity demand grows will also be very important over the medium term.”
Conclusion
The record coal demand of 2024 reflects the complexities of balancing global energy needs with climate goals. While renewable energy is reshaping the global energy mix and reducing coal reliance in advanced economies, coal remains a cornerstone in emerging markets. In the medium term, coal consumption is likely to plateau rather than decline sharply, with regional disparities continuing to define the global energy outlook.
