A new International Energy Agency (IEA) market report reveals increasing competition from other power sources, with developments in China’s electricity sector remaining key to coal’s prospects.
Global coal demand is forecast to edge down through the end of this decade as competition intensifies with other power sources, including renewables, natural gas, and nuclear, according to the 2025 edition of the IEA’s annual market report.
Coal 2025 explores current market dynamics and provides forecasts through 2030 for demand, supply, and trade at the global and regional levels. It also examines key trends in investment, costs, and pricing.
The report finds that global coal demand is on course to rise by 0.5% in 2025, reaching a record 8.85 billion tonnes. In several major markets, consumption patterns diverged from recent trends.
In India, an early and intense monsoon season resulted in a decline in annual coal use for only the third time in five decades.
In the United States, higher natural gas prices and policy measures that slowed coal plant retirements lifted coal consumption, which had been on a downward trajectory for the previous 15 years.
After two years of double-digit declines, coal demand in the European Union shrank only modestly.
Meanwhile, in China, coal use remained broadly unchanged from its 2024 level. By 2030, global coal demand is expected to tick lower, returning to the same level as in 2023.
This is largely driven by shifts in the power sector, which accounts for two-thirds of total coal consumption today.
With renewable capacity surging, nuclear expanding steadily, and a huge wave of liquefied natural gas coming to market, coal-fired power generation is forecast to decline from 2026 onward. Coal demand from industry is expected to remain more resilient.
In China, which currently accounts for more than half of global coal use, demand is expected to fall slightly by the end of the decade.
“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,” said IEA Director of Energy Markets and Security Keisuke Sadamori.
The largest absolute increase in coal consumption to 2030 is expected to take place in India, where demand is set to rise by 3% per year on average, leading to an overall increase of over 200 million tonnes.
Southeast Asia is forecast to see the fastest growth, with demand increasing by over 4% per year to 2030.
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