As the war in Ukraine surges in Europe and China, global coal consumption will reach an all-time high.
According to a report from the International Energy Agency (IEA), demand is expected to rise by 1.2pc and surpass eight billion tonnes.
This rise is due to an increase in coal-burning power generation in India, China and Germany, which offsets a decline in the United States.
The IEA expects that coal demand won’t start to fall until 2025. This is due to strong demand from emerging Asian economies.
It stated that coal would continue to be the largest single source of carbon dioxide in the global energy system.
Keisuke Sadamori (director of energy markets security at the IEA) said: “The world is nearing a peak in fossil fuel consumption, with coal set as the first to fall, but we’re not there yet.
“Coal demand is stubborn” and will likely rise to an all-time high in this year’s global emissions, increasing global emissions.
Russia’s restrictions on gas supplies to Europe have raised gas prices and caused concern about gas shortages. This has prompted countries like Germany to use coal to generate electricity.
European electricity supplies are under increasing pressure due to outages at France’s nuclear power stations fleet and low hydropower output from Norway.
Meanwhile, China’s heatwave impacted output at its hydropower stations, and coal power generation in China increased by 15 percent in August 2022, compared to August 2018.
In 2022, coal demand is expected to rise by 7 percent or 70 million tonnes in India and 6 percent or 29 million tonnes respectively in Germany. It will also grow 0.4 per cent or 18 million tonnes, in China.
India’s rise was due to strong economic growth. India’s GDP is expected to grow by 7.3 percent this year, according to the IEA.
The rise in coal use in power plants is despite the Cop26 international climate summit hosted by the UK in Glasgow in November 2021. This was despite the UK’s commitment to eliminate coal in the next 20-30 years.
The IEA however, says that it expects that the European return to coal will be temporary due to efforts to increase wind and solar power as well as improve energy efficiency.
The IEA stated that despite the increase in demand, banks, as well as investors, still show “a lack of appetite to invest in coal” in light of climate goals.
China accounts for more than half of global coal demand. However, the IEA predicts that coal consumption growth will remain “relatively stable” in China, at 0.7% per year, until 2025.
This is due to the increase in renewable power in the country. The IEA expects it to add more renewable capacity in 2025, which would be equivalent to Japan’s total electricity generation.
The UK is also relying on coal. National Grid asked power plants that were scheduled to close in September 2022 for their winter shutdown to remain open during winter so they can provide backup power supplies.
According to the IEA, “Coal markets have been shaken badly in 2022 with traditional trade flows disrupted and prices soaring, and demand set for growth of 1.2pc.”
