Global coal demand is expected to edge down through the end of the decade as competition intensifies from other power sources, including renewables, natural gas and nuclear energy, according to the International Energy Agency's 2025 annual market report on Wednesday.
The report says global coal demand is on track to rise 0.5% in 2025 to a record 8.85 billion tonnes.
Coal consumption diverged from recent trends in several major markets, the report said. In India, an early and intense monsoon season led to a decline in annual coal use for only the third time in five decades.
In the US, higher natural gas prices and policies that slowed coal plant retirements boosted coal consumption after 15 years of decline. In the European Union, coal demand fell only modestly following two years of double-digit drops, while in China it remained broadly unchanged from 2024 levels.
By 2030, global coal demand is expected to edge lower, returning to 2023 levels, the report said.
The shift is largely driven by changes in the power sector, which accounts for about two-thirds of coal consumption.
As renewable capacity expands, nuclear power grows steadily and large volumes of liquefied natural gas enter the market, coal-fired power generation is forecast to decline from 2026. Coal demand from industry is expected to remain more resilient.
- Largest increase in coal consumption expected in India
In China, which accounts for more than half of global coal use, demand is expected to dip slightly by the end of the decade, the report said. The country continues to rapidly expand renewable energy capacity, as the government aims to see domestic coal consumption peak by 2030.
India is expected to see the largest absolute increase in coal consumption through 2030, with demand rising by an average of 3% a year, resulting in an increase of more than 200 million tonnes, the report said.
The fastest growth is forecast in Southeast Asia, where coal demand is expected to climb by more than 4% annually through 2030.
Commenting on the report, IEA Director of Energy Markets and Security Keisuke Sadamori said: "Despite uncharacteristic trends in several key coal markets in 2025, our forecast for the coming years has not changed substantially from a year ago: we expect global coal demand to plateau before edging down by 2030."
"That said, there are many uncertainties affecting the outlook for coal, most notably in China, where developments – from economic growth and policy choices to energy market dynamics and weather – will continue to have an outsize influence on the global picture," said Sadamori.
"More broadly, trends in electricity demand growth and the integration of renewables worldwide could impact coal's trajectory," Sadamori added.
Reporting by Nuran Erkul in London
Writing by Handan Kazanci
Anadolu Agency
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