At a glance
Coal 2024, International Energy Agency (IEA), December 2024.
Coal powered the first Industrial Revolution, beginning in Britain in 1760. Last year, the U.K. closed down its last coal-fired power station, contributing to its cleanest electricity year ever. This is typical of broader trends as developed countries switch to renewables. However, rapid growth in China, India and ASEAN countries has offset this decline, doubling global coal use over the last 30 years. The International Energy Agency (IEA) expects demand to have hit a record 8.77 billion tonnes in 2024 before plateauing through 2027, challenging efforts to limit warming to 1.5 C.
The IEA projects that coal use, production and trade hit record levels in 2024, with China and India consuming three-quarters of global supply. While China’s demand growth slowed to 1.1 per cent (56 million tonnes), India’s increased by six per cent (70 million tonnes). Both countries also lead global electricity demand growth. But while China met most of its needs through renewables, India relied heavily on coal. Despite COP26 commitments from 190 countries and organizations to phase out coal in 2021, emissions from the most carbon-intensive fuel will likely reach new highs through 2027, highlighting the urgent need for an accelerated energy transition.
Organizations
Topics
Key findings
- Global coal demand will reach an all-time high in 2024 before plateauing: Demand is expected to grow by one per cent in 2024 to reach 8.77 billion tonnes and is expected to plateau over the next three years, reaching around 8.87 billion tonnes by 2027.
- China and India dominate coal demand and consumption: China’s demand is expected to grow by one per cent to reach 4.9 billion tonnes in 2024. India’s demand is set to increase by over five per cent to 1.3 billion tonnes.
- Coal-fired power generation remains the largest global electricity source: It could reach an all-time high of 10,700 terawatt-hours in 2024. The power sector has been the main driver of coal demand growth in recent years.
- Coal demand continues to shrink in most advanced economies: The European Union and U.S. are projected to reduce consumption by 12 per cent and five per cent respectively in 2024. This is a slower rate than in previous years. By 2025, their combined coal consumption will be less than half of India’s usage.
- Weather variability in China could significantly impact global coal demand: Fluctuations in weather that affect renewable energy generation could increase or decrease China’s coal demand by 140 Mt from the forecasted baseline through 2027.
Bigger picture
The Coal 2024 report shows that despite the global push towards cleaner alternatives, coal use continues to grow, albeit at a slower rate. This is being driven by rising electricity demand in China, India, Indonesia, Vietnam, the Philippines and Malaysia outpacing renewable deployment worldwide. China leads global consumption at 56 per cent, with its power sector using one-third of world coal.
Rising electrification in transport, industrial heat, data centres and AI drives China’s power demands. While China’s coal peak date remains uncertain, its massive renewable expansion (216 GW solar, 76 GW wind in 2023) suggests an eventual plateau and decline. After approving 220 GW of new coal plants in 2022-2023 and starting construction on 111 GW through mid-2024, China reduced new approvals to 9 GW in early 2024. China’s expansive renewable energy capacity means weather variability on power generation will play an increasingly key role in coal demand and therefore emissions. This strengthens arguments for more robust storage and advanced grid management technologies to help balance grids with high renewables.
Developed economies show ongoing declining coal use — though the pace is slowing. Consumption in the EU and the U.S. is projected to be less than half of India’s by 2025. U.S. renewable generation surpassed coal for the first time in 2024, with wind and solar producing 17 per cent of electricity compared to coal’s 15 per cent. Steel and cement industries must develop commercially viable low-carbon alternatives through green hydrogen, carbon capture, and improved efficiency.
While the IEA declared 2024 as the start of the Age of Electricity, signalling the end of the Age of Coal and the Age of Oil, this appears limited to North America and Europe. Asia’s growing power demands continue to drive coal consumption as renewable deployment lags behind. This suggests coal’s dominance will persist for several more years. This highlights the need for faster technological advancement and stronger policies to speed its decline globally.
Challenges and opportunities
Key barriers to energy transition progress due to coal identified in the report:
- Persistent coal dependency in emerging Asian economies: Emerging markets like India and ASEAN countries continue to rely heavily on coal for economic growth and industrialization.
- Slowdown of coal reduction in developed countries: In the U.S., coal consumption is expected to have decreased by five per cent betweeen 2023 and 2024. This represents a decline from 386 Mt to 368 Mt, slower than the 17 per cent decrease (or 81 Mt) seen between 2022 and 2023. Persistent use slows the pace of retirements.
- Weather-driven fluctuations in renewable generation: Variability in wind, solar and hydro performance can lead to increased coal use, complicating reduction efforts.
- Slow deployment of carbon capture and storage (CCS): Limited progress in CCS technologies for coal-fired power and industrial sectors delays emissions reductions. CCS retrofits would increase coal consumption due to the energy losses associated with the capture and storage process.
- Geopolitical and trade barriers: Shifts in trade flows, including Russia’s pivot to Asian markets due to international sanctions, low profitability and rail bottlenecks, create supply chain uncertainties that hinder coordinated decarbonization strategies.
- Lack of global policy coordination: Inconsistent national policies for coal phase-out create disparities in progress and add complexity to global decarbonization efforts.
To address these challenges, the report recommends:
- Scaling renewable integration and grid flexibility: Investments in grid infrastructure and energy storage can reduce reliance on coal as backup.
- Accelerating low-carbon industrial technologies: Governments and industries should invest in hydrogen-based steelmaking and alternative fuels for cement to reduce coal reliance.
- Diversifying energy mix in emerging economies: Supporting renewables and natural gas alongside coal can facilitate gradual decarbonization. International financing mechanisms should assist in scaling clean energy investments.
- Strengthening international collaboration on CCS: Faster development and deployment of CCS technologies through global partnerships could mitigate emissions. Joint public-private initiatives could help to reduce CCS deployment costs.
- Policy harmonization across borders: Coordinated coal phase-out strategies and shared carbon-pricing mechanisms can drive global progress. Multilateral frameworks for phasing out coal while ensuring a just transition are needed.
- Enhancing weather-resilient renewable deployment: Advanced forecasting tools and regional resource sharing can stabilize renewable output. More support could facilitate the development of robust forecasting technologies and cross-border renewable energy trading.
In their own words
After having grown by more than 1.2 billion tonnes since 2020, global coal demand is set to plateau in the next three years, reaching around 8.87 billion tonnes by 2027. Given the slow progress of deploying carbon capture, utilisation and storage (CCUS) technologies in the sector, carbon dioxide emissions from coal are not expected to decline in that period…
IEA (2024), Coal 2024, IEA, Paris, Licence: CC BY 4.0
Final thoughts
The IEA’s Coal 2024 report highlights both coal’s persistent role in global energy systems through 2027 as well as its long-term decline. Its projection that coal use reached record highs last year and will persist for the next three is environmentally devastating. Still, the demand reduction slowing growth followed by a plateau suggests we are at a tipping point. To ensure that all countries follow the trajectory of replacing coal with renewables whilst meeting energy needs, significant advances in energy efficiency, renewable energy production, storage capacity and technological developments are needed at an unprecedented pace.
The report could benefit from a deeper analysis of equitable transition pathways for coal-dependent economies and industries. There are plenty of examples from developed countries, including the U.K. Contrasts between the coal demand trajectories in developed and developing countries underscore the importance of strategies that address climate goals and economic development needs. The report could have offered more detailed recommendations for reducing energy demand — identified as the primary driver of coal growth. Improving energy efficiency should be a top priority; according to the IEA, it could deliver over one-third of all CO2 emission reductions by 2030.
Download the full report originally published by the International Energy Agency in December 2024.
