Global coal demand is projected to remain largely stable in 2024 and 2025, as increasing electricity needs in major economies counterbalance a gradual recovery in hydropower and the rapid growth of solar and wind energy, according to the International Energy Agency’s (IEA) latest coal market report.
In 2023, global coal use rose by 2.6% to an all-time high, primarily due to significant growth in China and India, the world’s largest coal consumers. The increase in coal demand was driven by both the electricity and industrial sectors, with a notable contribution from coal being used to offset low hydropower output and rising electricity demand.
China, which accounts for over half of the world’s coal consumption, is experiencing a recovery in hydropower generation in 2024. This, combined with the ongoing rapid deployment of solar and wind energy, is slowing the growth in coal use. However, with a projected 6.5% increase in electricity demand in China for 2024, a reduction in coal consumption is unlikely. In India, coal demand growth is expected to decelerate in the latter half of 2024 as weather conditions normalize. The first half of the year saw a sharp rise in India’s coal consumption due to low hydropower output and increased electricity demand driven by extreme heat waves and strong economic growth.
In Europe, coal demand continues to decline in the long term due to efforts to reduce emissions in power generation. After a more than 25% drop in coal power generation in the European Union in 2023, another significant decrease is expected this year. Similarly, the United States has seen a significant reduction in coal use in recent years, though this trend may slow in 2024 due to higher electricity demand and less substitution of coal with natural gas. Japan and Korea are also reducing their coal reliance, albeit at a slower rate than Europe.
IEA Director of Energy Markets and Security, Keisuke Sadamori, noted that global coal demand is likely to remain flat through 2025, given current policies and market trends. The rapid deployment of solar and wind power, along with the recovery of hydropower in China, is exerting considerable pressure on coal use. However, the substantial growth in electricity consumption in several major economies remains the primary driver of coal demand. Without such rapid growth, a decline in global coal use would likely be observed this year. Structural trends suggest that global coal demand is nearing a turning point and is expected to start declining soon.
On the supply side, global coal production is anticipated to decrease slightly in 2024, following steady growth the previous year. In China, coal production is slowing after two years of significant expansion, while India continues to push for increased coal output, expecting around a 10% rise in 2024. Advanced economies are seeing a decline in coal production, mirroring the demand trends.
Despite a drop in coal imports in Europe and Northeast Asia (Japan, Korea, and Chinese Taipei) since 2017, global trade volumes have reached record highs, with other countries stepping in to absorb the supply. In 2024, Vietnam is poised to become the fifth-largest coal importer, overtaking Chinese Taipei. Imports to China and India remain at historic peaks.
Although domestic coal production in China declined in the first half of the year, and despite tighter sanctions on Russian producers and disruptions in some exporting countries, the global coal market remains well supplied. More stable natural gas prices have kept coal prices within a range seen before the global energy crisis, though they remain elevated due to inflationary pressures.
Have you read?
Richest Countries In Europe In 2024.
Most Attractive Countries To Private Equity, Venture Capital, and Hedge Fund Investors.
Revealed: Highest-paid news media executive in the United Kingdom.
Countries Leading the Way on Climate Change.
World’s Best Countries For Adventure Tourism.
Add CEOWORLD magazine to your Google News feed.
Follow CEOWORLD magazine headlines on: Google News, LinkedIn, Twitter, and Facebook.
Copyright 2024 The CEOWORLD magazine. All rights reserved. This material (and any extract from it) must not be copied, redistributed or placed on any website, without CEOWORLD magazine’ prior written consent. For media queries, please contact: info@ceoworld.biz