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Global Coal Demand Expected To Hit All-Time High Next Year

The amount of electricity generated worldwide from coal is surging towards a new annual record in 2021, new data has revealed, just weeks after countries pledged at the COP26 climate conference to reduce their usage of the fossil fuel.

According to the International Energy Agency (IEA), the trend could elevate global coal demand to an all-time high next year.

There was significant rhetoric over the damaging impact of coal on the environment at COP26, although the deal ultimately watered-down proposals to eliminate its use entirely.

After falling in 2019 and 2020, the IEA said global power generation from coal is expected to jump by 9 per cent in 2021 to an all-time high of 10,350 terawatt-hours.

According to the IEA’s ‘Coal 2021’ report, the rebound is being driven by this year’s economic recovery, which has pushed up electricity demand faster than low-carbon supplies can keep pace. The steep rise in natural gas prices has also increased demand for coal power by making it more a cost-competitive alternative.

Overall, coal demand worldwide – including uses beyond power generation, such as cement and steel production – is forecast to grow by 6 per cent in 2021.

That increase will not take it above the record levels it reached in 2013 and 2014. Depending on weather patterns and economic growth, overall coal demand could reach new all-time highs as soon as 2022 and remain at that level for the following two years, underscoring the need for fast and strong policy action.

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“Coal is the single-largest source of global carbon emissions and this year’s historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero,” said IEA executive director Fatih Birol.

In China, where more than half of global coal-fired electricity generation takes place, coal power is expected to grow by 9 per cent in 2021 despite a deceleration at the end of the year.

The country has made some moves towards lowering its overall use of the fuel, such as a pledge in September to end the construction of new coal-fired projects abroad.

However, in the first half of 2021, China also committed to a series of carbon-intensive steel and coal projects – 18 new blast furnaces and 43 new coal plant units – which could collectively emit carbon emissions equivalent to the total emissions of the Netherlands.

In India, coal is forecast to grow by 12 per cent this year, alongside an almost 20 per cent increase in coal power generation in the US and the EU. However, coal use in the latter two developed markets is expected to go back into decline next year amid slow electricity demand growth and rapid expansion of renewable power.

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“The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal, but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action,” said Keisuke Sadamori, director of energy markets at the IEA.

“Asia dominates the global coal market, with China and India accounting for two-thirds of overall demand. These two economies – dependent on coal and with a combined population of almost three billion people – hold the key to future coal demand.”

Source: E&T

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