After reaching a new peak in 2023, global coal demand seems to have embarked on a steep path due to an electricity demand that is growing faster than renewables
Coal is the first source of energy for electricity generation
Renewables are not able to fill the new hunger for electricity. And the more consumption grows, the more coal contribution advances in some parts of the world. Despite progress in the new green capacity, global demand for coal is expected to remain stable after reaching its historic peak in 2023.
This is by the International Energy Agency (IEA) in its “Coal Mid-Year Update – July 2024.” The paper provides an accurate analysis of coal demand, production, trade, and prices for 2023. It also looks at the near future, with predictions that do not make the energy transition smile.
World demand for coal 2023
What is emerging from the report is how the world demand for this fossil fuel reached a record figure of 8.7 billion tonnes last year. Value growing by 2.6% on an annual basis. At the base of the peak, high consumption was recorded in China (276 million tons) and India (105 million tons), both increasing. The annual increases of these two Asian giants alone have offset the falls recorded in the European Union (less than 103 million) and the United States (meno 81 million).
“Consumption has grown both in the electricity production and industrial sectors, where the steel industry is the largest consumer. Coal electricity production has increased by 1.9% in 2023, reaching 10,690 terawatt-hours (TWh) and setting a new record,” writes the IEA. “As a result, coal continues to be the main source of global electricity generation.”
But it was not only consumption that leftned. In 2023, world coal production also reached a historic level: 8.9 billion tons. The three largest producers in the world (and with growing numbers) are China, India, and Indonesia, which together hold 70% of the global market.
World demand for coal 2024-2024
There will be no major drops in the future. Rather, at the regional level, demand in advanced economies is declining, but an increase is expected in several emerging economies. The result will be stable global demand in 2024 and 2025.
“Our analysis for the first half of 2024 shows a slight drop in global coal production of 0.7% year-on-year, driven mainly by China, which has recorded a 1.7% decline,” explains the Agency. “Responsible for half of global coal production, China has stepped up security controls in the Shanxi province, the country’s largest producing region, representing 1.3 billion tons of coal output by 2023.”
Coal prices The unusual market conditions of recent years, from pandemic to energy crisis to economic inflation, have also caused unprecedented fluctuations in coal prices.
The impact has been significant, with high queries, volatility, and exceptional differences between quality and geographical regions. As of 2023, the situation has normalized while remaining at higher values than before the Covid-19 pandemic. “In general, they were slightly higher, pushed up by cost inflation and some interruptions due to sanctions that hit Russia, which remains the world’s third largest coal exporter.”
