Global coal demand set to remain stable through 2023, despite headwinds

18/12/2019 08:54 Coal

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While global coal demand looks set to rise for the second year in a row in 2018, it is forecast to remain stable over the next five years, as declines in Europe and North America are offset by strong growth in India and Southeast Asia, according to the International Energy Agency’s latest coal market report, Coal 2018.

Air quality and climate policies, coal divestment campaigns, phase-out announcements, declining costs of renewables and abundant supplies of natural gas are all putting pressure on coal. As a result, coal’s contribution to the global energy mix is forecast to decline slightly from 27% in 2017 to 25% by 2023.

 

But coal demand grows across much of Asia due to its affordability and availability. India sees the largest increase of any country, although the rate of growth, at 3.9% per year, is slowing, dampened by a large-scale expansion of renewables and the use of supercritical technology in new coal power plants. Significant increases in coal use are also expected in Indonesia, Vietnam, Philippines, Malaysia and Pakistan.

 

Coal in China accounts for 14% of global primary energy, the largest around in the world. Developments in the Chinese coal sector have the potential to affect coal, gas and electricity prices across the world, for instance through inter-fuel substitution or regional arbitrage. This puts China’s coal sector at the centre of the global energy stage. While China accounts for nearly half of the world’s coal consumption, its clean-air measures are set to constrain Chinese coal demand going forward. We forecast Chinese coal demand to fall by around 3% over the period.

Source: iea.org

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