Global coal consumption is expected to remain near current levels through 2025 and into 2026, according to the International Energy Agency (IEA), even as global electricity demand continues to rise. According to the agency’s latest analysis, current policy frameworks and market trends are sufficient to keep global coal demand steady at around the 2024 record level of roughly 8.77 billion tonnes. Demand is projected to remain broadly flat through the next two years.
Declines in the West, Growth in the East
Coal use in parts of Europe and North America has been declining sharply: the European Union saw coal‑based power generation fall more than 25 percent in 2023, and the trend is expected to continue in 2024. The United States, too, continues to shutter coal capacity, yet these reductions are largely offset by rising use in fast‑growing economies.
China and India remain the engines of global coal consumption. In 2024, China’s coal use rose by about 1.2 percent, reaching its highest ever level at nearly 58 percent of global demand, largely because of surging electricity use fueled by heatwaves, electrification of transport, and industrial growth. India also saw coal demand climb by roughly 5–5.5 percent, driven by booming power and industrial activity. These two countries alone account for most of the growth.
Cleaner Energy Sources Gain Momentum
At the same time, coal’s dominance in electricity generation is steadily eroding. The global share of coal in the power mix has dropped to 35 percent, the lowest since the IEA was founded in 1974, and is set to decline further. Renewables and nuclear are expected to surpass coal-fired generation in 2025. Solar and wind capacity expansion, coupled with a rebound in hydropower output in China, are putting mounting pressure on coal demand.
While renewable deployment acts to limit growth, sharply rising electricity use in China, India, Indonesia, and Viet Nam prevents outright declines in global coal consumption under current policy. In short: without bigger climate actions, coal use holds steady.
Production Patterns Vary by Region
Coal supply is expected to tick downward slightly in 2024 and remain broadly unchanged in advanced economies. China’s output plateaued after two years of heavy expansion, while India is ramping up supply by about 10 percent in 2024. Overall, global coal production is projected to be stable through 2026.
Particularly notable is the outlook for Russian coal: the IEA forecasts a 3 percent decline in production in 2025, with exports dropping around 7 percent, trends that are expected to persist through 2027, weighed down by sanctions and logistical challenges.
Coal Prices Forecast to Ease
Coal prices are forecast to slide through 2025 and 2026. Analysts expect a roughly 27 percent slide in 2025, followed by another 5 percent drop in 2026, due to weaker demand from Asia and expanding seaborne supply. International coal trade volume is projected to set a record in 2024 but then shrink gradually, especially for thermal coal, while Asia retains its position as the main source of demand.
Industrial Demand Gives Coal Lifeline
While thermal coal faces long-term decline, metallurgical or coking coal, key to steelmaking, remains in demand for infrastructure and construction in emerging economies. Analysts note that industrial coal use will hold steady or grow modestly, particularly in regions with booming steel and chemical sectors.
IEA Warns of Turning Point
Keisuke Sadamori, IEA’s director of energy markets and security, summarised the outlook: “Based on today’s policy settings and market trends, global coal demand is likely to remain broadly flat through 2025. Structural trends mean coal demand is set to reach a turning point and start declining soon.”
However, Sadamori also warned that short-term deviations are possible, especially driven by weather conditions, which could swing China’s demand by as much as ±140 million tonnes by 2027.
Flat Now, But Declines Ahead Without Action
Under current settings, the IEA sees a plateau in coal demand between 2025–26, before a gradual slide appears toward the end of the decade. Yet meeting climate targets, especially under the Paris Agreement, will require faster declines in unabated coal use, as even flat consumption keeps CO₂ emissions too high.
The agency emphasizes that only stronger clean‑energy policies, faster deployment of renewable and nuclear capacity, and greater adoption of carbon‑capture technologies can accelerate the shift away from coal.
In the current policy environment, global coal demand is not set to decline sharply; it will hover close to record levels through 2026. Only stronger climate measures and faster clean‑energy roll‑out can flip the trend toward meaningful reductions.
