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Record demand for coal in 2023

According to estimates by the IEA, demand for coal will be higher than ever in 2023. Demand is increasing, especially in emerging countries. However, the IEA experts expect that the peak has now been reached.

Never before has so much coal been consumed worldwide as this year. The International Energy Agency (IEA) announced on Friday in Paris that total consumption of the fossil and therefore climate-damaging fuel increased by 1.4 percent to 8.5 billion tons. The previous high came from last year.

Europe’s coal consumption is falling significantly

The IEA is optimistic that “the peak could be reached in 2023” and that coal consumption will decline from next year onwards. By 2026, the decline is expected to be 2.3 percent compared to the current year. It is the first time ever that the IEA has predicted falling coal consumption. The reason is the increasing spread of renewable energy sources such as wind and sun.

“We have seen declines in global coal demand a few times, but they were short-lived and caused by extraordinary events such as the collapse of the Soviet Union or the Covid-19 crisis. This time it seems to be different as the decline is more structural in nature and is driven by the impressive and sustained expansion of clean energy technologies,” said Keisuke Sadamori, IEA director of energy markets and security, who speaks of a “tipping point” emerging.

According to the agency, there are big differences between industrialized and emerging countries in developments this year. According to the IEA, coal consumption in Europe fell by a record 23 percent, and in the USA it fell by 21 percent – also a record. This is primarily due to weaker industrial activity and the move away from coal-fired power generation in favor of renewable energies.

China is also facing a change

In other regions of the world, such as Asia, things are looking less positive: in China alone, 220 million tons more coal was consumed than in the previous year, which corresponds to an increase of 4.9 percent. This means that China consumes more than half of the world’s coal production. Around 60 percent of coal is used to produce electricity in China.

According to the IEA, more than half of the global expansion of renewable energy capacity will also take place in China. Experts therefore expect Chinese demand for coal to fall in 2024.

According to the IEA, an increase of eight percent was recorded in India. Consumption in Indonesia increased by eleven percent. Coal consumption there is also boosted by the production of nickel, which is needed for batteries in electric cars. By 2026, India and Southeast Asia will be the only regions in which coal consumption will increase significantly.

Consumption falls too slowly

According to the IEA, coal is still the most important energy source for electricity generation, steel and cement production, and the largest man-made source of the greenhouse gas carbon dioxide. Despite the expected decline, experts assume that coal consumption will continue to be well over eight billion tons per year up to and including 2026. According to the IEA, consumption would actually have to fall significantly faster in order to meet the goals agreed in the Paris Climate Agreement.

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