Global coal demand to plateau by 2027 as China’s shift to clean energy reshapes market

ASIA: According to the International Energy Agency (IEA) report published by Asian Power, the global demand for coal reached 8.77 billion tons in 2024, with expectations that it will stabilize through 2027 as renewable energy sources take a more dominant role and consumption levels in China slow down.

China, which plays a central role in global coal markets, accounts for one-third of the world’s coal consumption, primarily for power generation.

However, as part of its ongoing energy transition, Beijing has made significant strides this year in diversifying its power sector. The country is accelerating the construction of nuclear plants while also ramping up its solar and wind energy capacities.

These efforts are expected to curb the growth of coal consumption in the coming years.

“The rapid deployment of clean energy technologies is reshaping the global electricity sector, which accounts for two-thirds of the world’s coal use,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security.

“As a result, our models show global demand for coal plateauing through 2027, even as electricity consumption continues to rise sharply.”

However, Sadamori emphasized that short-term coal demand will be highly influenced by weather conditions in China—the world’s largest coal consumer—as well as the rate of electricity demand growth.

In advanced economies, coal demand has already peaked and is expected to decline steadily through 2027.

This trend is driven by robust policies, such as those in the European Union, and the growing availability of alternative energy sources, particularly natural gas, in North America.

On the other hand, coal consumption remains on the rise in several emerging economies, including India, Indonesia, and Vietnam.

Rapid economic growth, population increases, and rising electricity demands are contributing to this surge, with the power sector as the main driver. Industrial coal use is also on the rise in these nations.

The IEA’s latest report indicates that, while the global demand for coal is reaching a plateau, regional variations will continue to shape energy markets, with cleaner energy technologies pushing coal to the periphery in developed nations while fueling its continued demand in emerging markets.