Demand for coal ‘stable’ until 2023 – IEA

Coal demand is plateauing as major consumers put air-quality legislation in place. But many developing nations are increasingly reliant on coal to power economic growth. 

Global coal demand will likely remain stable over the next five years as growth in India and Southeast Asia offsets declines in Europe and North America, according to a new report from the International Energy Agency (IEA), Coal 2018.  

The study predicts that coal’s contribution to the global energy mix will drop slightly from 27% in 2017 to 25% by 2023. The decline is attributed to the success of coal divestment campaigns, the introduction of new air quality policies, lower-priced renewables and abundant natural gas supplies. 

Meanwhile, coal demand is rising across much of Asia – with India seeing the largest projected growth rate of any country worldwide at 3.9% each year. The IEA also anticipates significant increases in coal use in Vietnam, the Philippines, Malaysia, Pakistan and Indonesia. 
‘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. ‘For many countries, particularly in South and Southeast Asia, it is looked upon to provide energy security and underpin economic development.’

Demand in China – which accounts for almost half of global coal consumption – is likely to fall by around 3% to 2023 as the country introduces new clear-air measures. While some major coal users are working to phase out polluting coal-fired plants, the IEA notes that market trends are largely proving resistant to change. This is why the organisation favours the development of carbon capture, usage and storage (CCUS) technology alongside ambitious policy making. 

‘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,’ said Sadamori. ‘It must rely on all available options – including more renewables, of course – but also greater energy efficiency, nuclear, CCUS, hydrogen, and more.’

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