Coal still king in 2024

The International Energy Agency (IEA) last week again predicted a decline in global coal use, expecting demand to plateau through 2027 and decline thereafter “as renewable energy sources play a greater role in generating power and coal consumption levels off in China.”

But beyond the headlines, the IEA’s Coal 2024 report actually says something much different: global coal use “has rebounded strongly” since the 2020 pandemic downturn and will grow one percent this year to an all-time high of 8.77 billion tons. Electricity generation from coal will reach an all-time high of 10,700 terawatt-hours (TWh) in 2024. Coal production also “reached an all-time high in 2024,” and international trade by volume “is also set to reach a record in 2024.”

Consumption of coal was “primarily driven by countries heavily reliant on coal, such as China and India,” with China accounting for over 56 percent of global demand in 2023. The power sector “has been the main driver of coal demand growth.” The IEA writes:

Coal is often considered a fuel of the past, but global consumption of it has doubled in the past three decades. At the height of lockdowns related to the Covid-19 pandemic in 2020, demand declined significantly. Yet the rebound from those lows, underpinned by high gas prices in the aftermath of Russia’s full-scale invasion of Ukraine, has resulted in record global coal production, consumption, trade and coal-fired power generation in recent years.

It’s hard to square the fact that coal, despite its downsides, is driving electricity production in developing economies, with the prediction that coal consumption will peak a few short years from now.

In the U.S., coal-producing areas such as Montana and Wyoming’s Powder River basin have been closed off to new leases. Coal-fired power plants are on the chopping block with Environmental Protection Agency (EPA) regulations to force them to capture 90 percent of carbon dioxide emissions by 2032 if they hope to operate beyond 2039, or shut down by 2032.

But that’s just the U.S., driven largely by federal policies that could change. Plateauing coal demand would require massive renewable infrastructure buildout in major coal consumers like China and India, and probably stable electricity demand, too — unlikely, at a time when data center construction is fueling electricity demand growth. The IEA report predicts plateauing demand “depending on China”:

Despite increasing renewable electricity generation, India is expected to see the largest increase in coal use in the coming years, driven by consumption from the power sector and industry. Still, as has been the case for 25 years, China, which consumes 30% more coal than the rest of the world put together, will continue to define global trends… electricity demand in China is increasing strongly, growing at a faster rate on average than GDP since 2021. Two major drivers are underpinning power demand growth in China: the electrification of services previously provided by other fuels, such as mobility and industrial heat, and emerging industries such as data centres and AI. 

It seems that King Coal still has some life left in him after all.