The International Energy Agency (IEA) forecasts that global coal demand will plateau and begin to decline by 2030, increasingly challenged by the rapid growth of renewable energy, natural gas, and nuclear power. According to the recently released “Coal 2025” report, coal demand is expected to rise by 0.5% in 2025 to a record 8.85 billion tonnes, though shifts in market dynamics suggest a downward trend ahead.
The IEA’s analysis highlights varying demand patterns across major coal-consuming regions. India experienced a rare annual decline in coal usage due to an early and intense monsoon, while the United States saw a rebound in coal demand following years of decline, influenced by high natural gas prices and slower power plant retirements. China, which accounts for over half of global coal use, maintained steady demand from 2024 levels, whereas Europe’s decrease in coal use slowed significantly after years of steep drops.
The projected fall in demand comes primarily from the power sector, which consumes around two-thirds of all coal globally. The surge in renewable energy capacity, steady expansion of nuclear energy, and new supplies of liquefied natural gas are set to drive coal-fired power generation down from 2026 onwards. Industrial demand for coal is expected to be more resilient, though not enough to offset the decline from power generation.
China remains pivotal to coal’s global outlook. The report states that Chinese coal demand will slightly decrease by 2030, as the nation accelerates renewable energy deployment and targets peak coal consumption by the end of the decade. However, uncertainties in China’s economic growth, policy choices, and energy market evolution could reshape the global scenario.
India is set to record the largest absolute growth in coal demand—up over 200 million tonnes by 2030, averaging a 3% increase annually—amidst rising steel production and continued reliance on imports. Southeast Asia is projected to show the fastest relative growth, exceeding 4% yearly through the decade.
IEA warns that global demand could surpass projections if China sees rapid consumption growth or slower renewable integration. Meanwhile, reduced Chinese imports point to a shrinking international coal trade, impacting major exporters like Indonesia.
In summary, with abundant supply, weak prices, and declining production expected in most key regions except India, the global coal sector is entering a period of unprecedented transformation.
