Global coal demand peaked by 2024 as clean energy gains momentum, IEA says
Global coal demand is set to decline after reaching an all-time high in 2023, with a structural shift now underway as clean energy technologies begin to outpace fossil fuel consumption, according to a new report by the International Energy Agency (IEA) published on January 8.
The Coal 2025 report forecasts that coal consumption will fall by 2.3% in 2025 and continue declining through 2026, marking what the IEA calls a "historic turning point" in the global energy system. The drop is driven primarily by rapid deployment of renewables, slower economic growth in China, and reduced coal use in advanced economies.
“After plateauing for a decade, global coal demand has moved onto a downward trajectory,” the IEA said, projecting a cumulative decline of over 270 million tonnes of coal equivalent (Mtce) by 2026, compared to the 2023 peak.
Global coal demand rose by 1.4% in 2023 to a record 8.54bn tonnes, but the agency expects it to fall below 8.3bn tonnes by 2026. Consumption is set to drop in all major coal-consuming regions except Southeast Asia, where demand is still rising due to growing energy needs and limited alternatives.
China, which accounted for over half of global coal use in 2023, is forecast to see a gradual decline after 2024 as renewables, nuclear and hydro capacity increase. However, the IEA noted that the pace of the decline remains highly sensitive to China’s economic trajectory.
“Strong renewables deployment, combined with structural economic shifts in China, means we are close to a peak in coal use,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security. “But the transition away from coal is not happening fast enough to align with global climate goals.”
In India, coal demand is projected to continue growing through 2026, though at a slower pace, as the country seeks to balance its expanding power needs with growing investments in solar and wind capacity.
The report also highlights diverging trends between advanced economies and emerging markets. OECD countries saw coal demand fall by over 20% between 2018 and 2023 and are expected to reduce consumption by a further 17% by 2026. In contrast, non-OECD demand rose by 11% over the same five-year period.
The IEA warned that while coal’s decline marks progress, it remains the single largest source of energy-related CO₂ emissions globally. The agency called for stronger policy action to ensure the shift away from coal is accelerated and supported by investment in clean energy and grid infrastructure.
“Without greater policy support and investment, especially in developing economies, coal could remain entrenched for longer than the world can afford,” Sadamori said.
Coal-fired power generation is forecast to drop by 3.2% in 2024, despite still accounting for more than one-third of global electricity generation. The report stresses that new investments in solar, wind and battery storage are now often cheaper than new coal plants, even in emerging markets.
Coal production is also expected to begin declining after surging in 2022 and 2023 in response to high prices and energy security concerns following Russia’s invasion of Ukraine. Output is projected to fall by 3.9% globally by 2026, with the sharpest reductions in the United States and European Union.
The report concludes that while global coal use may now be in structural decline, the pace remains too slow to meet the Paris Agreement targets, particularly if new coal plants continue to be approved and financed in parts of Asia and Africa.
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