This article discusses the rising global demand for coal, despite declining domestic consumption in countries like the US. The primary drivers of this trend are rising demand in Asia, particularly China and India, and the difficulty of transitioning away from coal due to factors like energy security concerns, grid integration challenges, and the increasing need for energy from sectors like data centers.
U.S. coal exports have been steadily increasing to satisfy the growing global demand for this dirtiest fossil fuel, even as domestic consumption has declined. This trend is driven by rising demand in Asia, particularly in countries like China and India, while Europe and the U.S. witness significant reductions in coal usage. Global coal demand is projected to reach a record high of 8.77 billion tonnes in 2024 and remain at similar levels until 2027.
China, the world's second-largest economy and largest coal consumer, accounts for over 56% of global demand. Its record-high coal stockpiling strategy aims to prepare the nation for potential power shortages caused by extreme weather events. When hydropower output drops due to insufficient rainfall, the Chinese government often relies on coal power to ensure energy security. Another obstacle to a global shift away from coal is the difficulty of transmitting solar and wind power across provinces within China, despite the availability of renewable energy infrastructure. Coal will likely remain a 'critical energy backbone' in China until grid integration and management are fully developed nationwide. India's climate-induced extreme heat has led to soaring energy demand for cooling, and clean energy sources are not being developed quickly enough to meet the country's growing power needs. India's focus on economic and infrastructure development has also boosted the consumption of cement and steel, industries heavily reliant on coal. The South Asian nation's demand for steel is projected to grow by 8-9% in 2025, outpacing other economies, due to a surge in steel-intensive construction in the infrastructure and residential sectors.While India is focused on economic development, it has set an ambitious goal of achieving net-zero emissions by 2070. Beyond China and India, other major countries constructing new coal plants include Bangladesh, Indonesia, and Vietnam. The Philippines' coal consumption rose to around 831 million tons last year, reaching a new high. The share of coal in the Philippines' electricity mix surpassed that of China in 2023, making it Southeast Asia's most coal-dependent country. The surge in gas prices since Russia's invasion of Ukraine has also contributed to strong coal demand in Asia. Many major thermal coal importers, including China, India, and Vietnam, scaled back plans for gas-based power buildouts due to high gas prices. The increasing demand for energy globally, driven by factors such as economic growth and the rise of artificial intelligence, is further prolonging the need for coal. AI data centers are significant energy consumers, making it challenging to phase out reliable and affordable energy sources like coal. By 2030, electricity demand from data centers could exceed 35 GW, more than double the 17 GW recorded in 2022.
COAL DEMAND GLOBAL ENERGY CLIMATE CHANGE RENEWABLE ENERGY CHINA INDIA POWER GENERATION
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