India is projected to add the largest percentage increase in coal use in the coming year globally ahead of China and the European Union, a report by the International Energy Agency (IEA) said on Friday.
India is expected to increase use by 7% over the previous year, or about 70 million tonnes (Mt), followed by the European Union (+6%/+29 Mt) and China (+0.4%/+18 Mt). While coal-fired power generation in China and India is rising to keep pace with stronger demand, several European countries have been temporarily switching to coal due to record high prices for natural gas, low hydropower generation, and maintenance-related closures at nuclear plants, according to Coal 2022, the IEA’s annual report on coal trends.
India’s coal consumption has doubled since 2007 at an annual growth rate of 6% – and will be the “growth engine” of global coal demand. China is by far the largest coal-consuming country, accounting for 53% of global demand. Overall, China’s coal consumption increased by 4.6% to 4,232 tonnes in 2021. Coal demand in India, the second-largest consumer, increased by 14%, or 128 Mt, in 2021.
Even though global coal demand is set to increase only marginally by 1.2% from the previous year in 2022, it would be enough to push it to an all-time high -- about 8 billion tonnes in a single year and a record since 2013 -- amid the energy crisis. This doesn’t spell good news for the planet especially in the light of international climate change agreements and attempts to keep temperature rise below 1.5 degrees C. India has, while committing to switch to renewable energy over time, strongly defended its intent to keep using coal given that it is the quickest and cheapest resource it has for powering economic growth.
Though the world’s three largest coal producers – China, India and Indonesia – are expected to hit production records translating into high prices and comfortable margins for coal producers, because of a surge in demand in Europe due the Russia-Ukraine war, there is no sign of surging investment in export-driven coal projects. “This reflects caution among investors and mining companies about the medium- and longer-term prospects for coal,” the report noted.
“The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet,” Keisuke Sadamori, the IEA’s Director of Energy Markets and Security said in a statement. “Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions. At the same time, there are many signs that today’s crisis is accelerating the deployment of renewables, energy efficiency and heat pumps – and this will moderate coal demand in the coming years.”
