Global coal demand headed for all-time high

The world’s consumption of coal is set to return this year to match the record level it reached nearly a decade ago, then go beyond that high in 2023, according the International Energy Agency (IEA). The IEA forecasts a 0.7 per cent rise in global consumption 8 billion tonnes in 2022, assuming the Chinese economy recovers as expected in the second half of the year. This would match the annual record set in 2013, and coal demand was likely to increase further next year to a new all-time high, the agency said in a new report. "As soaring natural gas prices have made coal more competitive in many markets, international coal prices have risen in turn, hitting three all-time peaks between October 2021 and May 2022," the IEA said. "Sanctions and bans on Russian coal following Russia’s invasion of Ukraine have disrupted markets, and issues in other major exporters have contributed to supply shortages. "With other coal producers facing constraints in replacing Russian output, prices on coal futures markets indicate that tight market conditions are expected to continue well into next year and beyond." Worldwide coal consumption rebounded by about 6 per cent in 2021 as the global economy recovered rapidly from the initial shock of the COVID pandemic. The IEA said that rise contributed significantly to the largest ever annual increase in global energy-related CO2 emissions in absolute terms, putting them at their highest level in history. "Demand for coal in India has been strong since the start of 2022 and is expected to rise by 7 per cent for the full year as the country’s economy grows and the use of electricity expands," the IEA said in a statemnet on its latest report. "In China, coal demand is estimated to have declined by 3 per cent in the first half of 2022 as renewed COVID lockdowns in some cities slowed economic growth. "But an expected increase in the second half of the year is likely to bring coal consumption for the full year back to the same levels as last year. "China and India together consume double the amount of coal as the rest of the world combined, with China alone accounting for more than half the world’s demand." Coal consumption in the European Union is expected to rise by 7 per cent in 2022 on top of last year’s 14 per cent jump. The IEA said this was being driven by demand from the electricity sector, where coal was increasingly being used to replace gas, which was in short supply and has experienced huge price spikes following Russia’s invasion of Ukraine. "Several EU countries are extending the life of coal plants scheduled for closure, reopening closed plants or raising caps on their operating hours to reduce gas consumption. However, Europe only accounts for about 5 per cent of global coal consumption," the IEA noted.

Global coal demand headed for all-time high

Industry Queensland

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