World coal demand growth to slow – IEA

The latest forecast from the International Energy Agency (IEA) predicts that global coal demand growth will stall over the next five years and the share of coal in the power generation mix will drop to 36% by 2021, down from 41% in 2014. 

In its latest Medium-Term Coal Market Report, the IEA said the drop in coal demand growth will be driven largely by lower demand in China and the US, and the rapid growth of renewables and an increase in energy efficiency.

But the report’s emphasis on slowing coal demand is just one side of the demand story ­– it also suggests a continuing geographical shift in demand which has seen coal markets moving away from Europe and North America, and towards Asia. China now accounts for 50% of global coal demand and almost half of global coal production. This shift will accelerate in the coming years, according to the IEA.

The US has recently seen its largest annual decline in coal use ever, as coal consumption dropped in the country by 15% in 2015, precipitated by competition from cheap natural gas, cheaper renewable power and tighter regulations on air pollutants. 

The IEA has said that following a drop in coal use globally in 2015 for the first time this century, demand will not reach 2014 levels again until 2021. 

The report also points out that, despite the Paris Agreement on climate change, there is no major impetus to promote the development of carbon capture and storage technology.