Coal Demand Plateau by 2027 Amid Renewable Growth: IEA

The International Energy Agency (IEA) estimated that coal demand will reach 8.77 billion t in 2024. While demand remains high, the agency projects a plateau by 2027 as renewable energy technologies become more widespread.

IEA highlights that China’s continued efforts to diversify its energy mix, including increased nuclear capacity and significant expansion of solar and wind power, should limit future coal consumption growth. However, the report also notes uncertainty due to factors like weather variability, which could cause coal demand in China to fluctuate by as much as 140Mt by 2027. IEA notes that China is the world's largest coal consumer, as its power plants account for one-third of the global coal consumption. 

Despite these fluctuations, the report emphasizes that the rapid deployment of clean energy technologies is reshaping the global electricity sector. This is expected to cause coal demand to plateau, even as electricity use, which is largely generated from coal, continues to grow worldwide.

IEA also notes that coal demand in advanced economies like Europe has peaked and is expected to decline over the coming years, driven by policies promoting clean energy and the availability of alternative energy sources such as natural gas. Meanwhile, coal demand continues to rise in emerging economies, including India, Indonesia, and Vietnam, where increasing electricity demand is primarily driving consumption in the power sector.

In addition to demand trends, the report reveals that coal prices remain 50% higher than the average from 2017 to 2019. Global coal production reached an all-time high in 2024, though growth is expected to plateau by 2027 as structural changes in the market take hold. International coal trade was also expected to reach a record volume of 1.55 billion t in 2024, but IEA predicts a decline in global trade volumes thereafter, with thermal coal seeing the most significant decrease.

Asia remains the dominant region in international coal trade, with the largest importing countries being China, India, Japan, Korea, and Vietnam, while Indonesia and Australia are the top exporters.