Global coal demand is on the rise for the second year in a row in 2018, but will remain steady through 2023, the International Energy Agency (IEA) said on Tuesday in its latest coal market report 'Coal 2018'.
Declines in Europe and North America are offset by strong growth in India and Southeast Asia, according to the agency's statement.
Coal will provide 25 percent of the global energy by 2023, slightly down from 27 percent in 2017.
Air quality and climate policies, coal divestment campaigns, phase-out announcements, declining costs of renewables and abundant supplies of natural gas are among the reasons for the slight decline in coal.
"Coal demand grows across much of Asia due to its affordability and availability," the agency said and added that "India sees the largest increase of any country, although the rate of growth, at 3.9 percent per year, is slowing, dampened by a large-scale expansion of renewables and the use of supercritical technology in new coal power plants."
Indonesia, Vietnam, Philippines, Malaysia and Pakistan are other countries that will contribute to the increase of coal consumption.
Developments in the Chinese coal sector have the potential to affect coal, gas and electricity prices across the world, putting China’s coal sector at the center of the global energy stage.
China's clean-air measures are set to constrain its coal demand, which is the largest around in the world, going forward. As a result, demand is forecast to fall by around 3 percent over the period.
"Meanwhile, in a growing number of countries, the phase out of coal-fired generation is a key policy goal. But market trends are proving resistant to change," the statement read.
"The story of coal is a tale of two worlds with climate action policies and economic forces leading to closing coal power plants in some countries, while coal continues to play a part in securing access to affordable energy in others,” said Keisuke Sadamori, director of Energy Markets and Security at the IEA.
He added that for many countries, particularly in South and Southeast Asia, coal is looked upon to provide energy security and underpin economic development.
"Tackling our long-term climate goals, addressing the urgent health impacts of air pollution and ensuring that more people around the world have access to energy will require an approach that marries strong policies with innovative technologies. It must rely on all available options - including more renewables, of course - but also greater energy efficiency, nuclear, CCUS [carbon capture, utilization and storage], hydrogen, and more," Sadamori said.
By Firdevs Yuksel