Released December 21, 2022 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Global demand for coal is expected to exceed 8 billion tonnes in 2022, a record, and should remain at roughly that level through 2025, according to a new report from the International Energy Agency (IEA) (Paris, France). The report, Coal 2022: Analysis and Forecast to 2025, predicts surging demand in Asia, principally China and India, will offset reductions in Western countries like the U.S.
The report, released December 16, has grim implications for the effort to limit worldwide growth in atmospheric concentrations of carbon dioxide (CO2) and stem global warming, issues that greatly concern the IEA.
Russia's invasion of the Ukraine in February 2022 "sharply altered the dynamics of coal trade, price levels, and supply and demand patterns in 2022," noted the report. As natural gas prices shot upward, many countries, particularly in Europe, switched from gas to coal in their electric generation, despite a surge in prices for coal.
Various factors are expected to largely offset each other and keep global annual demand for coal at approximately 8 billion tonnes through 2025, the report predicted. Surging demand in China and India is expected to counterbalance declining demand in the U.S. and the European Union (EU) over the next few years. Slowing economic growth around the world has cut into electricity demand and industrial output while electricity generated from renewables has risen to a new record. In projecting aggregate demand, the report combined thermal and metallurgical coal, though it noted the different factors affecting demand for each.
Click on the image at right to see the IEA's historical and projected worldwide demand for all forms of coal to 2025.
"The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet," Keisuke Sadamori, the IEA's director of energy markets and security, said in a statement accompanying the report. "Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions."
"At the same time," he continued, "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."
China, the world's largest producer and consumer of coal, holds the key to the world's current and future coal use. China uses about nine times the amount of coal that the U.S. does on an annual basis.
China's demand for thermal coal for electric power generation surged in 2022, rising about 45 million tonnes, but that was partially tempered by declining industrial demand for steam coal and metallurgical coal. Overall, China's demand for coal of all kinds and all purposes will rise about 20 million tonnes this year. In 2023, overall demand growth is expected to shrink slightly, but surge again in 2024 and 2025, the report projected. Overall, China's annual demand for coal is projected to rise from about 4,250 million tonnes in 2022 to 4,337 million tonnes in 2025.
Click on the image at right to see the IEA's projection of coal demand growth in China 2022-2025.
India's demand for all forms coal shot up in 2021, but demand growth is expected to moderate in 2022 and further soften over 2023-2025. Unlike China, the Indian economy is expected to see demand for coal grow in all sectors: steam coal in power generation, steam coal for industrial production, and metallurgical coal for steelmaking. Overall, Indian demand for coal is expected to be about 1,103 million tonnes in 2022, rising to approximately 1,220 million tonnes in 2025--more than twice the level of U.S. demand.
Click on the image at right to see IEA's projection of Indian coal demand growth from 2021-2025.
In the U.S., the world's third-largest user of coal, the IEA expects overall demand for all forms of coal to continue declining, extending a long trend stemming from the closure of coal-fired power plants. The agency forecasts that U.S. coal-fired generation capacity will fall by about 33 gigawatts (GW) over the 2022-2025 period. U.S. demand for thermal coal and lignite is estimated to fall from roughly 479 million tonnes in 2022 to 388 million tonnes in 2025, Coal 2022 said.
Click on the image at right to see the IEA's historical and projected change in U.S. coal-fired generation capacity between 2010 and 2025.
China is expected to remain the world's dominant producer of coal through 2025, with smaller shares held by India, Indonesia, Australia and the U.S.
Click on the image at right to see the IEA's historical and future estimate of global coal production between 2000 and 2025.
The agency projected that the world's three largest coal producers--China, India and Indonesia--all will hit production records in 2022. However, the report noted that "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."
The IEA is one of several organizations that have grown alarmed over coal's resilience in global energy markets as global temperatures have risen. In a separate report, Coal in Net Zero Transitions, issued November 15, the energy agency detailed the steps necessary to bring down global coal emissions rapidly enough to meet international climate goals while supporting energy security and economic growth and addressing the social and employment consequences of the changes involved.
That November report called for "immediate policy action to rapidly mobilize massive financing for clean energy alternatives to coal and to ensure secure, affordable and fair transitions, especially in emerging and developing economies." Coal in Net Zero Transitions showed that the overwhelming majority of current global coal consumption occurs in countries that have pledged to achieve net zero emissions.
The IEA's Coal in Net Zero Transitions report noted the dramatic surge in investment in renewable energy around the world in recent years. Nonetheless, it called for an even-greater swelling of investment in clean electricity generation, accompanied by system-wide improvements in energy efficiency, in order to cut coal use in electricity generation and to reduce emissions from existing coal-fired power plants.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The report, released December 16, has grim implications for the effort to limit worldwide growth in atmospheric concentrations of carbon dioxide (CO2) and stem global warming, issues that greatly concern the IEA.
Russia's invasion of the Ukraine in February 2022 "sharply altered the dynamics of coal trade, price levels, and supply and demand patterns in 2022," noted the report. As natural gas prices shot upward, many countries, particularly in Europe, switched from gas to coal in their electric generation, despite a surge in prices for coal.
Various factors are expected to largely offset each other and keep global annual demand for coal at approximately 8 billion tonnes through 2025, the report predicted. Surging demand in China and India is expected to counterbalance declining demand in the U.S. and the European Union (EU) over the next few years. Slowing economic growth around the world has cut into electricity demand and industrial output while electricity generated from renewables has risen to a new record. In projecting aggregate demand, the report combined thermal and metallurgical coal, though it noted the different factors affecting demand for each.
"The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet," Keisuke Sadamori, the IEA's director of energy markets and security, said in a statement accompanying the report. "Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions."
"At the same time," he continued, "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."
China, the world's largest producer and consumer of coal, holds the key to the world's current and future coal use. China uses about nine times the amount of coal that the U.S. does on an annual basis.
China's demand for thermal coal for electric power generation surged in 2022, rising about 45 million tonnes, but that was partially tempered by declining industrial demand for steam coal and metallurgical coal. Overall, China's demand for coal of all kinds and all purposes will rise about 20 million tonnes this year. In 2023, overall demand growth is expected to shrink slightly, but surge again in 2024 and 2025, the report projected. Overall, China's annual demand for coal is projected to rise from about 4,250 million tonnes in 2022 to 4,337 million tonnes in 2025.
India's demand for all forms coal shot up in 2021, but demand growth is expected to moderate in 2022 and further soften over 2023-2025. Unlike China, the Indian economy is expected to see demand for coal grow in all sectors: steam coal in power generation, steam coal for industrial production, and metallurgical coal for steelmaking. Overall, Indian demand for coal is expected to be about 1,103 million tonnes in 2022, rising to approximately 1,220 million tonnes in 2025--more than twice the level of U.S. demand.
In the U.S., the world's third-largest user of coal, the IEA expects overall demand for all forms of coal to continue declining, extending a long trend stemming from the closure of coal-fired power plants. The agency forecasts that U.S. coal-fired generation capacity will fall by about 33 gigawatts (GW) over the 2022-2025 period. U.S. demand for thermal coal and lignite is estimated to fall from roughly 479 million tonnes in 2022 to 388 million tonnes in 2025, Coal 2022 said.
China is expected to remain the world's dominant producer of coal through 2025, with smaller shares held by India, Indonesia, Australia and the U.S.
The agency projected that the world's three largest coal producers--China, India and Indonesia--all will hit production records in 2022. However, the report noted that "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."
The IEA is one of several organizations that have grown alarmed over coal's resilience in global energy markets as global temperatures have risen. In a separate report, Coal in Net Zero Transitions, issued November 15, the energy agency detailed the steps necessary to bring down global coal emissions rapidly enough to meet international climate goals while supporting energy security and economic growth and addressing the social and employment consequences of the changes involved.
That November report called for "immediate policy action to rapidly mobilize massive financing for clean energy alternatives to coal and to ensure secure, affordable and fair transitions, especially in emerging and developing economies." Coal in Net Zero Transitions showed that the overwhelming majority of current global coal consumption occurs in countries that have pledged to achieve net zero emissions.
The IEA's Coal in Net Zero Transitions report noted the dramatic surge in investment in renewable energy around the world in recent years. Nonetheless, it called for an even-greater swelling of investment in clean electricity generation, accompanied by system-wide improvements in energy efficiency, in order to cut coal use in electricity generation and to reduce emissions from existing coal-fired power plants.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
