Global demand for coal is slowing, says leading energy body

A new report from the International Energy Agency has highlighted that coal use is declining in major economies and that global consumption will remain sluggish.

The IEA’s latest coal report, Coal 2017, states that global consumption fell 1.9 percent last year to 5.357 billion tonnes. This was largely as a result of lower gas prices, the transition to renewables, and advances in energy efficiency. 

This decline continues a trend of 4.2 percent seen over the past two years, and under current forecasts will mean a decade of stagnation for the commodity. In 2022, the IEA predicts that coal usage will represent 26 percent of the global energy mix, down from its current level of 27 percent.

The agency, however, sees coal-fired power generation increasing its share of the electricity mix by 1.2 percent per year, but this will still represent an all-time low for its forecasts of 36 percent in 2022.

The greatest drop-off in coal over the past year was seen in China, the United States and the European Union, but increased in India and other developing countries across Southeast Asia.

The report also sees coal use in India continuing to increase 4 percent per year for the next six years. India is seen as an increasingly important presence in the market, in contrast to the EU, which accounts for just 6 percent of demand today.

Despite this, India has seen an explosion in the deployment of renewable energy and aims to build 175 gigawatts (GW) of new capacity over the next five years. This includes 100GW of solar and 60GW of wind.

Keisuke Sadamori, the International Energy Agency’s director for energy markets and security said: “The energy system is evolving at a rapid pace all around us, with a more diversifying fuel mix, and the cost of technologies going down…but while everything else is changing, global coal demand remains the same”.

The IEA has in the past been criticised for underestimating the potential growth of renewable energy in favour of traditional forms of generation, such as coal. Greenpeace described one of its recent forecasts as “pessimistic”.