Global coal consumption rose to an all-time high in 2022 and is potentially set remain at similar levels for the next few years, as growth in Asia picks up and the EU looks for an alternate fuel to replace Russian gas and oil.
As per a recent report by the IEA, coal demand grew by 1.2% in 2022, 𝘳𝘦𝘢𝘤𝘩𝘪𝘯𝘨 𝘢𝘯 𝘢𝘭𝘭-𝘵𝘪𝘮𝘦 𝘩𝘪𝘨𝘩 𝘢𝘯𝘥 𝘴𝘶𝘳𝘱𝘢𝘴𝘴𝘪𝘯𝘨 8 𝘣𝘪𝘭𝘭𝘪𝘰𝘯 𝘵𝘰𝘯𝘯𝘦𝘴 𝘧𝘰𝘳 𝘵𝘩𝘦 𝘧𝘪𝘳𝘴𝘵 𝘵𝘪𝘮𝘦 𝘦𝘷𝘦𝘳.
This demand is expected to remain steady till 2025 with consumption set to hover around these levels for the coming 3 – 4 years (see chart)
The use of coal will reach a record high despite a number of nations across the world making significant climate pledges as it appears that economies are unable to kick their coal addiction (once again).
Even as countries and host governments have adopted climate change policies that call for the gradual phasing out of coal production and use over the ensuing decades, but due to gas shortages and the difficulty of ramping up enough renewable energy production to meet global demand, many still rely on coal for both industry and power.
Since China makes up more than half of the world’s coal demand (nearly 4250 MT), its consumption patterns have the biggest influence on global coal demand.
One-third of the world’s coal use is accounted for by China’s power industry alone.
In spite of the fact that China’s coal consumption increased significantly in 2021, growth is predicted to slow to an average of 0.7% per year through 2025, mostly due to the rise in the production of renewable energy.
The invasion of Ukraine by Russia in February last year has changed estimates of energy consumption in Europe and other areas of the world since sanctions against Russian energy caused a significant volumes of oil and gas supply to abruptly go offline.
Many European nations, which relied heavily on piped gas from Russia for their heating and industry needs, found themselves unexpectedly struggling for their energy security and resorting to traditional sources, such coal and nuclear power.
Coal consumption in the EU is expected to jump nearly to nearly 21% to 476 MT from its 2020 lows
India’s coal consumption rose to 1033 Mt in 2021, a 14% rebound from a pandemic low in 2020. About 93% (~959 Mt) of the country’s coal demand was thermal coal (including lignite), mainly for electricity generation as thermal power makes up for nearly 60% of its installed power capacity.
Consumption is expected to grow significantly in the country as it looks at rapid industrial growth in the coming years and demand for electricity will sky rocket.
𝘊𝘰𝘢𝘭 𝘪𝘵 𝘴𝘦𝘦𝘮𝘴 𝘪𝘴 𝘴𝘵𝘪𝘭𝘭 𝘢𝘭𝘪𝘷𝘦 𝘢𝘯𝘥 𝘬𝘪𝘤𝘬𝘪𝘯𝘨 (..𝘱𝘰𝘭𝘭𝘶𝘵𝘪𝘯𝘨?)
Source: Rajat Kapoor (LinkedIn)
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