Global coal demand expected to decline in coming years: IEA

New Delhi, Dec 15 (PTI) After reaching an all-time high this year, global coal demand is expected to decline by 2026 due to a major expansion of renewables, according to the latest edition of the International Energy Agency’s (IEA) annual coal market report.

This is the first time that the report has predicted a drop in global coal consumption.
Around 40 per cent of global carbon dioxide emissions stem from coal, while oil and gas contribute to the remaining percentage.

The report says global demand for coal rose by 1.4 per cent in 2023, mainly due to rising energy demand in emerging and developing economies, including India (8 per cent) and China (5 per cent).

Consumption is on course to decline in most advanced economies in 2023, including in the European Union and the United States (around 20 per cent each), it said.

Both the US and the EU rely more on oil and natural gas. For instance, oil and natural gas accounted for 36 per cent and 33 per cent of the total energy production in the US in 2022.

The report expects global coal demand to fall by 2.3 per cent by 2026 compared to 2023 levels, even in the absence of governments announcing and implementing stronger clean energy and climate policies. This decline is set to be driven by a major expansion of renewable energy capacity.

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, coal demand in China is expected to fall in 2024 and plateau through 2026, the report said.

The projected decline in global demand for coal – which is currently the largest energy source for electricity generation, steelmaking and cement production, but also the largest source of carbon dioxide (Co2) emissions from human activity – could mark a historic turning point, the IEA said.

The use of unabated coal would need to fall significantly faster to drive down emissions at a rate consistent with the goals of the Paris Agreement, it said.

The term “unabated” generally refers to the continued use of coal, oil, and gas without efforts to curtail emissions. However, a universally accepted and precise definition of this term is currently lacking.

“We have seen declines in global coal demand a few times, but they were brief and caused by extraordinary events such as the collapse of the Soviet Union or the Covid-19 crisis. This time appears different, as the decline is more structural, driven by the formidable and sustained expansion of clean energy technologies,” said Keisuke Sadamori, IEA Director of Energy Markets and Security.

“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.”

Domestic coal production has long been the cornerstone of energy security policy for China and India.

At the annual UN climate conference in Dubai, nearly 200 countries clinched a breakthrough deal which calls for the world transition away from all fossil fuels, the primary reason for the climate crisis, in a fair and equitable way. Though the 21-page cover decision urged countries to accelerate efforts to phase down unabated coal power, it did not explicitly mention oil and gas.

Negotiators from the Global South said developing countries, including India and China, strongly resisted the “targeting of coal” during the climate talks which ended on Wednesday.

Several countries denounced the hypocrisy of some of the developed nations at COP28 for their continued expansion of fossil fuel production, despite lofty promises to combat climate change.

According to a report released in September, five global North countries – the US, Canada, Australia, Norway, and the UK – account for a significant 51 per cent of the planned expansion from new oil and gas fields through 2050.