Coal Demand Will Decline Before 2035

     The International Energy Agency recently released the "2025 World Energy Outlook," focusing on the coal sector. Through the perspective of this authoritative report, we can analyze the current policy landscape and the future trends and changes in the coal industry.

     Since 2000, coal has been the fastest-growing fossil fuel in the global energy mix. Global coal demand nearly doubled during this period, driven primarily by the dependence on coal power generation in emerging markets and developing economies, especially China and India. However, in the current policy scenario, global coal demand will peak before gradually declining: by 2035, demand will decrease by about 8% compared to 2024 levels, and it is estimated that by 2050, global coal usage will decrease by about 20% compared to current levels.

     Currently, the power industry accounts for about two-thirds of global coal demand. Under the current policy scenario, by 2035, renewable energy generation will account for more than 85% of the increase in global electricity demand. Therefore, renewable energy has begun to gradually replace coal in most regions except Southeast Asia. At the same time, industrial coal consumption in multiple emerging markets and developing economies continues to rise. For example, India's demand for industrial coal will grow by 60% by 2035, while Indonesia's growth will exceed 45%. China's industrial coal consumption is expected to decrease by 16% by 2035.

     The coal market landscape is primarily influenced by a few Asian countries. China stands out the most, followed by India, Indonesia, and other Southeast Asian countries. The average operating life of coal-fired power plants in emerging markets and developing economies in Asia is about 15 years, and theoretically many plants can still operate for a long time. However, if the coal usage continues to increase, it will mean needing to build a large number of new coal-fired power plants.

     In practice, the most likely factors to influence the global coal exit process are the social impacts of transition. As countries that have already implemented coal transitions have confirmed, this process is challenging. Coal production declines may have far-reaching consequences for coal-dependent communities and regions.

    Driven by strong domestic demand and policy support, India's coal production will reach nearly 600 million tons of coal equivalent in 2024, an increase of nearly 100 million tons compared to 2022. In the current policy scenario, India will become the main driver of global coal production growth, with an additional 100 million tons of coal equivalent by 2035.

    The production prospects for different types of coal vary: power coal (accounting for 80% of current global production, mainly used for power generation) is expected to decrease by over 10% before 2035; coking coal (used primarily in steel production) is expanding in some countries except China - coking coal production is expected to decrease by over 20% before 2035; lignite and peat have the largest declines, decreasing by about 45% before 2035, mainly due to the closure of mines in Europe.

   From : www.cwestc.com

   Editor : Xu Xi