‘Decade of stagnation’ predicted for global coal consumption

Worldwide demand for coal should remain nearly flat until 2022, continuing a trend that has persisted since 2012, according to research by the International Energy Agency (IEA).

The organisation’s annual coal market report reveals that demand dropped in China, the US and EU in 2016, but increased in India and many parts of Southeast Asia, and shows no signs of slowing down.

This is despite lower gas prices, a surge in renewables, and improvements in energy efficiency resulting in overall global consumption falling for the second year running.

“The energy system is evolving at a rapid pace all around us, with a more diversifying fuel mix, and the cost of technologies going down,” said Keisuke Sadamori, IEA director for energy markets and security.

“But while everything else is changing, global coal demand remains the same.”

The report reveals that demand has fallen 4.2% over the last two years, but is expected to reach 5,357 million tonnes of coal equivalent in 2022 – the same average amount it has been over the last five-year period.

This would mean that coal use would have had a decade-long period of stagnation.

The report highlights how India will be increasingly important to global markets, with its coal-fired power generation expected to grow almost 4% a year through to 2022.

However, it is China that is predicted to be me the key driver, with the country’s supply-side reforms thought to be critical for coal prices in the coming years, while the EU is set to become a more marginal player.

The IEA argues that urgent action is needed to support carbon capture utilisation and storage (CCUS), which it said made important strides in 2016, but continues to lag far behind other technologies.

“This serves as a critical reminder why technologies like CCUS are so important, and why governments and companies need to step up their policy support and investments in that sector in order to meet global climate goals,” Sadamori continued.

“Indeed, without CCUS, coal use will be seriously constrained in the future.”