Essay by Eric Worrall
According to the IEA coal use will drop as soon as European renewables start displacing coal.
The world’s coal consumption is set to reach a new high in 2022 as the energy crisis shakes markets
16 December 2022
Increase in coal use in Europe is expected to be temporary, with demand falling in advanced economies in the coming years but remaining robust in emerging Asia
Global coal demand is set to increase only marginally in 2022 but enough to push it to an all-time high amid the energy crisis, according to a new IEA report, which forecasts the world’s coal consumption will remain at similar levels in the following years in the absence of stronger efforts to accelerate the transition to clean energy.
Global coal use is set to rise by 1.2% in 2022, surpassing 8 billion tonnes in a single year for the first time and eclipsing the previous record set in 2013, according to Coal 2022, the IEA’s latest annual market report on the sector. Based on current market trends, the report forecasts that coal consumption will then remain flat at that level through 2025 as declines in mature markets are offset by continued robust demand in emerging Asian economies. This means coal will continue to be the global energy system’s largest single source of carbon dioxide emissions by far.
“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,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security. “Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions. At the same time, 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.”
The international coal market remained tight in 2022, with coal demand for power generation set to hit a new record. Coal prices rose to unprecedented levels in March and then again in June, pushed higher by the strains caused by the global energy crisis, especially the spikes in natural gas prices, as well as adverse weather conditions in Australia, a key international supplier. Europe, which has been heavily impacted by Russia’s sharp reductions of natural gas flows, is on course to increase its coal consumption for the second year in a row. However, by 2025, European coal demand is expected to decline below 2020 levels.
I also expect coal use to drop over the next few years, my crystal ball tells me the world is about to enter a severe global recession. But I don’t expect renewable energy to significantly displace coal use by 2025, because unlike coal, renewable energy cannot be produced on demand. Renewable energy is only available when the sun shines or the wind blows.