Coal use to rise 1.2% in 2022, surpassing 8 bn tons: IEA

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Global coal use is set to rise by 1.2 percent in 2022, surpassing 8 billion tonnes in a single year for the first time, according to Coal 2022, the IEA’s latest annual market report on the sector.

Coal consumption will remain flat at that level through 2025 as declines in mature markets are offset by continued robust demand in emerging Asian economies. This means coal will continue to be the global energy system’s largest single source of carbon dioxide emissions by far.

Higher natural gas prices amid the energy crisis have led to increased reliance on coal for generating power, but slowing economic growth has time reduced electricity demand and industrial output – and power generation from renewables has risen to a new record.

In China, the world’s largest coal consumer, a heat wave and drought pushed up coal power generation during the summer, even as strict Covid-19 restrictions slowed down demand.

“Coal demand will likely reach an all-time high this year, pushing up global emissions. There are many signs that today’s crisis is accelerating the deployment of renewables, energy efficiency and heat pumps – and this will moderate coal demand in the coming years. Government policies will be key to ensuring a secure and sustainable path forward,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security.

Europe, which has been heavily impacted by Russia’s sharp reductions of natural gas flows, is on course to increase its coal consumption for the second year in a row. However, by 2025, European coal demand is expected to decline below 2020 levels.

The world’s three largest coal producers – China, India and Indonesia – will all hit production records in 2022. Despite high prices and comfortable margins for coal producers, there is no sign of surging investment in export-driven coal projects. This reflects caution among investors and mining companies about the medium- and longer-term prospects for coal.

Coal demand is forecast to fall in advanced economies in the coming years as renewables increasingly displace it for electricity generation. Emerging and developing economies in Asia are set to increase coal use to help power their economic growth, even as they add more renewables. Developments in China, the world’s largest coal consumer, will have the biggest impact on global coal demand in the coming years, but India will also be significant.

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