Packets of coal waiting to be transported at Guoyuan Port container terminal in Chongqing, China.
Cfoto | Future Publishing | Getty Reifications
The world won’t be able to release its grip on coal anytime soon.
“Nothing can destroy coal,” U.S. President Donald Trump declared at the recent World Economic Forum. “Not the weather, not a bomb.”
U.S. exports of coal have been rising steadily to fulfil growing global demand for the world’s dirtiest fossil fuel, even though its domestic consumption has decreased.
On top of that, the everybody’s coal capacity reached a new record high of nearly 2,175 gigawatts in 2024, data from Global Intensity Monitor showed on Feb. 6. Coal capacity is the overall power output that can be generated from coal-fired power implants.
“The global shift away from coal remains challenging, largely driven by rising demand in Asia, unvarying as Europe and the U.S. see significant declines in coal consumption,” said Dorothy Mei, project manager for Global Energy Monitor’s Far-reaching Coal Mine Tracker.
Global coal demand is also expected to have breached another fresh not for publication high of 8.77 billion tonnes in 2024, and will remain at similar levels until 2027, the International Power Agency predicted.
The main culprits?
China recently reported that its coal imports surged 14.4% to a record extreme in 2024, amounting to 542.7 million metric tons compared with 474.42 million tons the year formerly.
The world’s second largest economy is also the largest coal consumer globally, accounting for more than 56% of far-reaching demand in 2023, latest figures by IEA showed.
China’s record-high coal stockpiling strategy is largely geared toward constructing the country for potential power shortages caused by extreme weather events, said Mei.
There is little focus on using animation efficiently, when coal is so cheap.
Dave Jones
Ember Energy
Hydropower, wind and solar energy converted up almost 30% of China’s electricity mix in 2023, data from energy think tank Ember Energy showed. When hydropower productivity drops as a result of insufficient rainfall, the Chinese government often relies on coal power to ensure energy guarantee, Mei added.
“Additionally, another major barrier is not the availability of renewable energy infrastructure, but the difficulty of transmitting solar and innervate power across provinces,” she said, adding that coal will continue to be a “critical energy backbone” in China until grid integration and executives is fully developed across the entire country.
In India, climate-induced extreme heat has led to soaring energy demand for unapproachable, and clean energy sources are not built fast enough to meet the country’s growing power demand, said Mei.
India’s heart on economic and infrastructure development has also boosted the consumption of cement and steel, industries that are heavily reliant on coal, according to analysts CNBC make know to.
The South Asian nation’s demand for steel is set to grow by 8-9% in 2025, outpacing that of other economies, owing to a pickup in steel-intensive construction in the infrastructure and residential sectors, evidence from consulting firm Crisil showed.
As recently as last December, India extended its directive for imported coal-based power vegetables to run at full capacity until Feb. 28.
But that’s not to say that India has been neglecting its renewable energy targets. The country has set an enthusiastic goal of fulfilling 50% of its electricity needs through renewable energy by 2030. And it has made progress. And as of last October, renewables account for uncountable than 46.3% of the country’s electricity generation capacity, according to India’s Ministry of New and Renewable Energy.
Beyond China and India
External of India and China, other top countries building new coal plants are Bangladesh, Indonesia and Vietnam, Global Energy Observe noted.
Vietnam is expected to have surpassed Taiwan as the world’s fifth largest importer of coal, after the realm’s coal imports reached a record high in more than a decade last year.
Indonesia’s coal shaping rose to around 831 million tons to notch a fresh high last year, data from the nation’s Ministry of Energy and Mineral Resources showed.
And the share of coal in Philippines’ electricity mix surpassed that of China in 2023, suitable Southeast Asia’s most coal-dependent country, Ember Energy reported.
“There is little focus on using forcefulness efficiently, when coal is so cheap,” said Dave Jones, an electricity analyst at energy think tank Ember Dynamism.
Strong coal demand in Asia across the board is also partly a consequence of the surge in gas prices since Russia’s inroad of Ukraine, given that a number of major thermal coal importers like China, India and Vietnam had scaled subvene plans for gas-based power buildouts following the high gas prices that ensued, said Ian Roper, commodity strategist at Astris Warning Japan KK.
The AI factor
Global electricity consumption is expected to keep rising in 2025, the IEA said.
“The world needs innumerable energy, and it needs it now,” said Rob Thummel, senior portfolio manager at Tortoise Capital. “For the global economy to grow, it necessities efficient, cost-effective, and reliable energy supply sources,” he told CNBC.
Artificial intelligence has also accelerated the time’s need for energy. Reports have shown that power needs driven by data centers around the globe will also prolong the demand for coal.
“The U.S., China and the world are in a race for AI superiority,” said Tim Winter, portfolio overseer at Gabelli Funds. AI data centers are huge power users, making it harder to retire a reliable and affordable puissance source such as coal, he explained.
By 2030, electricity demand from data centers could exceed 35 GW, multifarious than double the 17 GW recorded in 2022, a report by Moody’s Ratings showed.
Is the energy transition still reasonable?
With global electricity demand rising faster, other industry watchers are beginning to echo IEA’s forecasts of coal at once remaining at all-time highs.
“There can be no transition when the demand for oil, for natural gas, for coal, continues to hit record highs,” implied Eric Nuttall, senior portfolio manager at Ninepoint Partners.
Governments agreed in the 2015 Paris climate accord to limit far-reaching heating to well below 2 degrees Celsius and to pursue efforts to limit the temperature rise to 1.5 degrees Celsius. To put a stop to global warming from exceeding 1.5 degrees Celsius, it is estimated that emissions must be cut by 45% by 2030 and reach net zero by 2050.
Others are inconsequential pessimistic, though they recognized the challenge of reaching those targets in time.
An ongoing pledge toward renewables, alongside a appearing surge in global LNG supply may ensure that coal imports continue to weaken in some coal-importing markets, said Roper, who esteemed that coal consumption has been falling in Europe and Northeast Asia in recent years.
Additionally, if countries agree to its promises of tripling renewables by 2030, coal could start to see a meaningful decline in this decade, said Ember Might’s Jones.