Released December 18, 2023 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Global coal use is expected to set a record in 2023, with usage estimated at 8.54 billion metric tons, a 1.4% increase over 2022's record level of consumption, according to a new report from the International Energy Association (IEA) (Paris, France). The report comes after meteorologists projected that Earth's average temperature in 2023 will be the hottest on record and shortly after a U.N. climate change conference agreed to transition away from fossil fuels. For more on that, see December 15, 2023, article - U.N. Climate Summit Endorsed Transition Away from Fossil Fuels, but Questions Remain.
Click on the image at right for an IEA chart showing global coal consumption from 2002 to 2026.
The IEA report, Coal 2023, released December 15, noted that coal use is on course to decline sharply in most advanced economies in 2023, including record drops in the European Union and United States of around 20% each. However, demand in emerging and developing economies was on the rise in 2023, with India's increasing its use by 8% and China growing 5%. Strong electricity demand growth in both countries, coupled with weak hydropower production, were the reasons for the surge in demand.
By 2026, the report projected, global demand for the black rock will decline about 2.3% from 2023 levels as coal-fired generation loses market share to renewable energy. China, in particular, is expected to account for over half of the world's renewable energy expansion, even as it continues to account for about half of the world's demand for coal. Despite the continued global buildout of renewable energy, Coal 2023 forecast the world will be using more than 8 billion metric tons of coal in 2026. As renewables in China come online, they will lower demand for coal in that country over the 2024-2026 period, though weather conditions, economic growth and "structural shifts" in the Chinese economy may affect that nation's use of coal, the report observed.
Coal 2023 also noted that "to drive down emissions at a rate consistent with the goals of the Paris Agreement, the use of unabated coal would need to fall significantly faster."
In a statement accompanying the report, Keisuke Sadamori, the IEA's director of energy markets and security, commented: "We have seen declines in global coal demand a few times, but they were brief and caused by extraordinary events such as the collapse of the Soviet Union or the COVID-19 crisis. This time appears different, as the decline is more structural, driven by the formidable and sustained expansion of clean energy technologies. A turning point for coal is clearly on the horizon--though the pace at which renewables expand in key Asian economies will dictate what happens next, and much greater efforts are needed to meet international climate targets."
The report documented an acceleration of coal use and production in Asia: China, India and Southeast Asia are projected to account for 75% of global consumption in 2023, up from only about 25% in 1990. Coal use in Southeast Asia this year is on track to surpass demand in both the U.S. and the European Union. Through 2026, the report projected, coal use in India and Southeast Asia is poised to grow significantly, the only regions of the world where coal use is expected to grow.
The energy agency predicted that coal use will fall more than 20% in the U.S. (down 95 million metric tons) and the European Union (down 107 million metric tons) this year. But the sum of those declines will be offset by China's increased use of coal this year, which is expected to grow about 220 million metric tons.
Click on the image at right for an IEA chart showing the change in global coal consumption from 2022 to 2026, by country.
As the IEA assessed the 2024-2026 period, it said expected growth in renewable energy, coupled with more favorable hydroelectric conditions, to lead to a downturn in coal-fired generation. Coal generated about 36% of the world's electricity in 2022, but the agency predicted coal's share of the global fuel mix will fall to about 30% in 2026.
On the production side, the world's three largest producing nations--China, India and Indonesia--are on track to set new records this year, part of why global production likely will set a new record this year. These three countries now account for more than 70% of the world's coal production.
Click on the image at right for an IEA chart showing global coal production from 2002 to 2026.
Coal 2023 projected that global production of coal will rise about 1.8% in 2023, to 8.7 billion metric tons, roughly 87% of which was steam coal or lignite. Global coal production growth in India, China and Indonesia more than offset declining production in the United States and the European Union.
The IEA thinks that 2023 will be the high-water mark for coal production. Starting in 2024, it expects a net reduction in global coal production. Ongoing production declines in the U.S. and European Union likely will be complemented by reduced production volumes in Indonesia, as Chinese demand for seaborne thermal coal slackens. India would be the "last bastion of remarkable growth in production, as its mines meet the growing demand from its domestic power sector." But the agency's model "suggests that declines in other countries will more than offset this growth," resulting in global production of approximately 8.4 billion metric tons in 2026.
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 IEA report, Coal 2023, released December 15, noted that coal use is on course to decline sharply in most advanced economies in 2023, including record drops in the European Union and United States of around 20% each. However, demand in emerging and developing economies was on the rise in 2023, with India's increasing its use by 8% and China growing 5%. Strong electricity demand growth in both countries, coupled with weak hydropower production, were the reasons for the surge in demand.
By 2026, the report projected, global demand for the black rock will decline about 2.3% from 2023 levels as coal-fired generation loses market share to renewable energy. China, in particular, is expected to account for over half of the world's renewable energy expansion, even as it continues to account for about half of the world's demand for coal. Despite the continued global buildout of renewable energy, Coal 2023 forecast the world will be using more than 8 billion metric tons of coal in 2026. As renewables in China come online, they will lower demand for coal in that country over the 2024-2026 period, though weather conditions, economic growth and "structural shifts" in the Chinese economy may affect that nation's use of coal, the report observed.
Coal 2023 also noted that "to drive down emissions at a rate consistent with the goals of the Paris Agreement, the use of unabated coal would need to fall significantly faster."
In a statement accompanying the report, Keisuke Sadamori, the IEA's director of energy markets and security, commented: "We have seen declines in global coal demand a few times, but they were brief and caused by extraordinary events such as the collapse of the Soviet Union or the COVID-19 crisis. This time appears different, as the decline is more structural, driven by the formidable and sustained expansion of clean energy technologies. A turning point for coal is clearly on the horizon--though the pace at which renewables expand in key Asian economies will dictate what happens next, and much greater efforts are needed to meet international climate targets."
The report documented an acceleration of coal use and production in Asia: China, India and Southeast Asia are projected to account for 75% of global consumption in 2023, up from only about 25% in 1990. Coal use in Southeast Asia this year is on track to surpass demand in both the U.S. and the European Union. Through 2026, the report projected, coal use in India and Southeast Asia is poised to grow significantly, the only regions of the world where coal use is expected to grow.
The energy agency predicted that coal use will fall more than 20% in the U.S. (down 95 million metric tons) and the European Union (down 107 million metric tons) this year. But the sum of those declines will be offset by China's increased use of coal this year, which is expected to grow about 220 million metric tons.
As the IEA assessed the 2024-2026 period, it said expected growth in renewable energy, coupled with more favorable hydroelectric conditions, to lead to a downturn in coal-fired generation. Coal generated about 36% of the world's electricity in 2022, but the agency predicted coal's share of the global fuel mix will fall to about 30% in 2026.
On the production side, the world's three largest producing nations--China, India and Indonesia--are on track to set new records this year, part of why global production likely will set a new record this year. These three countries now account for more than 70% of the world's coal production.
Coal 2023 projected that global production of coal will rise about 1.8% in 2023, to 8.7 billion metric tons, roughly 87% of which was steam coal or lignite. Global coal production growth in India, China and Indonesia more than offset declining production in the United States and the European Union.
The IEA thinks that 2023 will be the high-water mark for coal production. Starting in 2024, it expects a net reduction in global coal production. Ongoing production declines in the U.S. and European Union likely will be complemented by reduced production volumes in Indonesia, as Chinese demand for seaborne thermal coal slackens. India would be the "last bastion of remarkable growth in production, as its mines meet the growing demand from its domestic power sector." But the agency's model "suggests that declines in other countries will more than offset this growth," resulting in global production of approximately 8.4 billion metric tons in 2026.
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).
