Globally, the appetite for coal hits unprecedented peaks.
Globally, various nations are treading different paths towards energy stability. Some are banking on sustainable energy sources, while others are banking on nuclear power. Surprisingly, coal is not only making a comeback but is also in greater demand than before, as per an analysis.
As per the International Energy Agency (IEA), the demand for coal is projected to hit an unprecedented peak this year, growing by 1% to reach 8.77 billion tonnes. Since 2020, the world's coal consumption has escalated by over 1.2 billion tonnes. Experts predict that this demand will level off within the next three years, hovering around 8.87 billion tonnes by 2027.
The energy agency underscores that there's a notable disparity in coal demand between developed and developing nations. While coal consumption in the EU is predicted to dip by 12% and in the US by 5% this year, it's expected to increase by 1% in China and 5% in India.
China's power sector drives demand
China's electricity sector plays a pivotal role in global coal markets, as around one-third of the world's coal is burned in Chinese power plants, according to the IEA. Nevertheless, the construction of nuclear power plants and the advancement of renewable energy in China should help curb the rise in coal consumption until 2027.
Given the ongoing political climate and market trends, a decrease in CO2 emissions from coal usage is not anticipated during this period. This is because advancements in carbon capture and storage are moving at a snail's pace.
As coal consumption wanes in developed economies, this downturn might be compensated by the growth in some developing nations such as India, Indonesia, and Vietnam. Weather conditions, particularly in China, and the speed at which electricity demand rises will also have an impact on actual coal consumption in the forthcoming years.
The United States, despite showing a 5% decrease in coal consumption this year, remains a significant player in the global coal market, being one of the nations contributing to the continued demand for coal. China, on the other hand, with around one-third of the world's coal being burned in its power plants, plays a crucial role in driving the global coal markets.
