Global coal demand hit a record high in 2025 but demand is stalling and will gradually decline over the next five years as competition from alternative energy sources rise, according to a report from the International Energy Agency (IEA).
According to the IEA’s Coal 2025 report, global coal demand is set to rise by 0.5 per cent in 2025 to reach a record 8.85 billion tonnes.
However, global coal demand will likely decrease, returning to the same level as 2023, as renewable capacity increases, nuclear energy generation expands and liquefied natural gas comes to market.
In China, coal demand is expected to fall slightly by the end of the decade.
China continues to deploy renewable energy capacity at a rapid pace and the government is looking to reach peak domestic coal consumption in 2030.
EA Director of Energy Markets and Security Keisuke Sadamori said: “Despite uncharacteristic trends in several key coal markets in 2025, our forecast for the coming years has not changed substantially from a year ago: we expect global coal demand to plateau before edging down by 2030.
“That said, there are many uncertainties affecting the outlook for coal, most notably in China, where developments – from economic growth and policy choices to energy market dynamics and weather – will continue to have an outsize influence on the global picture.
“More broadly, trends in electricity demand growth and the integration of renewables worldwide could impact coal’s trajectory.”
India is forecast to account for the largest absolute increase in coal consumption by 2030.
Demand for coal in the country is set to rise by 3 per cent on average, leading to an overall increase of 200 million tonnes.
The fastest growth is forecast to happen in Southeast Asia, where coal demand is set to increase by 4 per cent per year to 2030.
The IEA warns that global demand could surpass projections if China sees faster-than-expected growth in electricity consumption, slower integration of renewables or strong investment in coal gasification.