Global Coal Consumption Reaches Record High in 2022, Asia Drives Growth

International Energy Agency's July Coal Market Update highlights that coal consumption last year rose by 3.3 per cent to 8.3 billion tonnes. Growth was led by strong momentum in India and China, besides the surprise return of coal to many parts of Europe due to the Riussia-Ukraine war

Global coal consumption climbed to a new all-time high in 2022 and will stay near that record level this year as strong growth in Asia for both power generation and industrial applications outpaces declines in the United States and Europe, according to the IEA’s latest market update. The IEA’s mid-year Coal Market Update highlights that coal consumption last year rose by 3.3 per cent to 8.3 billion tonnes.

Small declines in coal-fired power generation are likely to be offset by rises in industrial use of coal in 2023 and 2024, the report added. Global coal demand is estimated to have grown by about 1.5 per cent in the first half of this year to a total of about 4.7 billion tonnes, lifted by an increase of 1 per cent in power generation and 2 per cent in non-power industrial uses.

In a positive development, the first half of this year saw coal demand fall faster than expected in the United States and the European Union – by 24 per cent and 16 per cent, respectively. However, demand from the two largest consumers, China and India, grew by over 5 per cent more than offsetting declines elsewhere. In 2023, China and India could account for nearly 70 per cent of the world’s global coal consumption, while the United States and the European Union could account for just 10 per cent, the report adds.

“Coal is the largest single source of carbon emissions from the energy sector, and in Europe and the United States, the growth of clean energy has put coal use into structural decline,” said IEA Director of Energy Markets and Security Keisuke Sadamori.

“But demand remains stubbornly high in Asia, even as many of those economies have significantly ramped up renewable energy sources. We need greater policy efforts and investments – backed by stronger international cooperation – to drive a massive surge in clean energy and energy efficiency to reduce coal demand in economies where energy needs are growing fast.”

In recent times, Asia witnessed an increase in the share of coal demand compared to any other region. In 2021, China and India accounted for two-thirds of global consumption, together using twice as much coal as the rest of the world combined. This share is expected to touch 70 per cent this year. On the other hand, the US and the European Union saw their share of coal demand decrease to less than 10 per cent compared to 35 per cent share at the beginning of this century.

The report further reveals that, on the supply side, the three largest coal producers – China, India and Indonesia – all produced record amounts in 2022.

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