Global coal consumption hit a new record in 2022 and is expected to maintain high levels throughout this year, according to the latest market update from the International Energy Agency (IEA). Coal consumption increased by 3.3% to 8.3 billion tonnes last year, with Asia leading the growth in both power generation and industrial usage.
The IEA predicts that while there may be slight declines in coal-fired power generation in 2023 and 2024, they will be offset by increases in industrial coal use, albeit with regional variations. China, India, and Southeast Asian countries are projected to be responsible for three-quarters of global coal consumption in 2023. During the first half of 2023, China and India experienced over a 5% increase in demand, making them the two largest consumers.
In contrast, coal demand in the European Union was minimal in 2022 due to a temporary surge in coal-fired power generation being offset by reduced usage in industry. The decline in coal use in the United States is attributed to lower natural gas prices.
Despite declines in coal consumption in regions like Europe and the US, the IEA emphasizes the need for stronger policies and investments in clean energy, as the new global coal demand record underscores the urgency for transition. Coal remains the largest contributor to carbon emissions in the energy sector, and while renewable energy sources have displaced coal in Europe and the US, demand in Asia remains high. The IEA calls for more significant efforts, investments, and international cooperation to support the massive expansion of clean energy and energy efficiency in fast-growing economies.
In 2021, China and India already consumed twice as much coal as the rest of the world combined. The IEA estimates their share will rise to 70% in 2023, while the US and European Union, which accounted for 40% of coal demand three decades ago, now represent less than 10%.
The IEA expects European coal consumption to continue declining as renewable energy expands and nuclear and hydropower recover. Meanwhile, some Western nations and climate-vulnerable island countries advocate for fossil fuel phase-out, while resource-rich countries support continued extraction.
In June, UN Secretary-General Antonio Guterres called for a phasing out of oil, coal, and gas, urging fossil fuel companies to cease their efforts hindering climate progress. Canada has made significant strides in transitioning to a low-carbon economy, as showcased by its 2023 budget that offered substantial green investment tax credits, primarily for producing and transmitting electricity.
Overall, the IEA’s report highlights the ongoing challenge of reducing global coal consumption and the need for comprehensive actions to accelerate the adoption of cleaner energy alternatives.
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