- International Energy Agency forecasts global coal demand to peak this decade before a gradual decline.
- Power sector shifts toward renewables gas and nuclear drive long term outlook.
- China and India remain decisive for global coal markets.
Global coal demand has reached a plateau and is expected to edge lower by the end of the decade as competition from alternative power sources intensifies, according to a new market report from the International Energy Agency.
The agency’s latest annual outlook, Coal 2025, finds that global coal demand is set to increase slightly in 2025 by about half a percent to reach a record level of around eight point eight five billion tonnes. However, this growth is expected to be short lived, with demand projected to return to 2023 levels by 2030.
The report highlights diverging trends across major markets. In India, coal consumption fell in 2025 following an early and intense monsoon season, marking only the third annual decline in five decades. In contrast, coal use in the United States rose as higher natural gas prices and policy measures slowed the retirement of coal power plants. In the European Union, demand declined only modestly after two years of sharp contraction, while coal use in China remained broadly flat compared with 2024.
Looking ahead, the IEA expects the global power sector, which accounts for around two thirds of coal consumption, to be the main driver of declining demand. Rapid growth in renewable energy capacity, steady expansion of nuclear power and a significant increase in liquefied natural gas supply are forecast to reduce coal fired electricity generation from 2026 onwards. Coal demand from industrial users is expected to prove more resilient.
China, which currently consumes more than half of the world’s coal, is projected to see a slight decline in demand by 2030 as renewable deployment accelerates and policy efforts focus on peaking domestic coal use by the end of the decade. The IEA notes that developments in China’s economy, energy policy and electricity demand will continue to have an outsized influence on global coal markets.
India is expected to record the largest absolute increase in coal consumption through 2030, with demand rising by an average of about three percent per year, adding more than two hundred million tonnes. Southeast Asia is forecast to be the fastest growing region, with coal demand increasing by more than four percent annually over the same period.
On the trade side, weaker import demand from China is expected to contribute to a decline in global coal trade volumes, following several years in which Chinese imports supported international markets. Metallurgical coal is seen as an exception, supported by India’s growing steel sector and continued reliance on imports.
Against a backdrop of subdued demand growth, high stock levels and lower prices, the IEA expects coal production to decline in most major producing countries through 2030. China and Indonesia are both forecast to see reduced output, while India is likely to increase production as it seeks to curb import dependence and strengthen domestic energy security.
Link to the full report HERE
Author: Bryan Groenendaal
