Context: In a recently released report, the International Energy Agency (IEA) has said that the global coal demand is expected to decline by 2026.
Key Highlights of IEA Report on Global Coal Demand
- Reasons for Decline: Due to structural changes like shift towards renewables and plateauing demand from China, the largest coal-using country.
- Delay in Decline: However, till 2026, the demand for coal will be rising. The global demand for coal will be rising by 1.4% in 2023.
- India is expected to remain the “driving force” for the fuel until 2026.
- Regional Inequality: Demand in the European Union and United States is expected to drop 20% each and demand is expected to rise 8% in India and 5% in China in 2023.
About International Energy Agency (IEA)
- IEA was created in 1974 under the framework of the Organisation for Economic Co-operation and Development (OECD) to help coordinate a collective response to major disruptions in the supply of oil.
- Membership: 31 member countries, 13 association countries
- India: India is an association country in the IEA.
- Reports: World Energy Outlook ; Energy Efficiency Report; Net Zero Roadmap: A Global Pathway to keep the 1.5 degree Goal in reach.
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Factors Influencing Decline in Global Coal Demand
- Rise in Renewable: A steep upward trend in low-cost solar photovoltaic deployment is expected to aid renewable power generation.
- Nuclear generation is also set to see moderate increases, especially in China, India, and the European Union.
- Change in Climate: Expected La Nina conditions in 2024-26 is expected to translate to greater hydropower output.
- Progress in COP: Reducing use of ‘unabated’ coal, or coal-burning without technologies to capture carbon, is among the explicit agreements of latest COP28.
- Prior Declines: Temporary declines due to Collapse of the Soviet Union or Covid-19 have taken place in the past; this time decline is more structural, driven by clean technologies and international obligations.
Global Coal Use
- Demand: The global demand for coal rising by 1.4% in 2023, surpassing 8.5 billion tonnes for the first time. Currently, a little over half the world’s coal demand comes from China.
- Production: China, India, and Indonesia – the three largest coal producers globally – are expected to break output records in 2023, pushing global production to a new high in 2023.
Predicted Future of Coal Use
- With a major expansion of renewable energy, a 2.3% fall in global coal demand by 2026 is expected.
- Decline in Developed Economies: Demand in the European Union and United States is expected to drop 20% each,
- Increase in Developing Economies: It is expected to rise 8% in India and 5% in China in 2023 due to demand for electricity and diminished electrical generation from hydropower.
Must Read: World Energy Outlook 2023
Source: IEA ; The Hindu
December 18, 2023