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Global coal demand is expected to remain relatively stable over the next two years, despite notable shifts in major markets during the first half of 2025, according to the International Energy Agency’s (IEA) latest Coal Mid-Year report.
By Ryan Chigoche
The report shows that coal use worldwide reached a record high of approximately 8.8 billion tonnes in 2024 — a 1.5% increase from the previous year.
This was largely driven by increased consumption in China, India, Indonesia, and other emerging economies, which more than offset declines recorded in advanced economies such as Europe, North America, and Northeast Asia.
However, some of these dynamics shifted in early 2025. In China and India, coal demand softened, largely due to slower growth in electricity consumption and a surge in renewable energy generation.
In contrast, coal use in the United States surged by around 10%, as robust electricity demand and higher natural gas prices drove a renewed reliance on coal-fired power. Meanwhile, demand in the European Union remained broadly flat, with declining industrial use offset by a rebound in coal-fired electricity generation.
Despite these regional fluctuations, the IEA notes that the structural factors underpinning global coal consumption remain largely unchanged.
As such, it projects a slight increase in global coal demand in 2025, followed by a modest decline in 2026 — bringing overall usage just below the 2024 peak.
This outlook is consistent with the IEA’s Coal 2024 report published last December, though updated figures reflect weaker global economic growth and a renewed policy shift in the United States favouring coal.
Looking at regional forecasts, coal demand in China is expected to decline slightly in 2025 — by less than 1%. In contrast, the United States is forecast to see a 7% increase, while the European Union is projected to record a nearly 2% decline.
“While we have seen contrasting trends in different regions in the first half of 2025, these do not alter the underlying trajectory of global coal demand,” said IEA Director of Energy Markets and Security Keisuke Sadamori.
“We expect the world’s coal consumption to remain broadly flat this year and next, in line with our previous forecast, although short-term fluctuations remain possible in different regions due to weather conditions and the high degree of economic and geopolitical uncertainty. As in past years, global coal trends continue to be shaped overwhelmingly by China, which consumes almost 30% more coal than the rest of the world combined,” Sadamori added.
The report highlights that electricity generation continues to be the primary driver of coal demand globally, particularly in China. However, the industrial sector — especially steel and chemicals — also plays a substantial role in shaping coal use patterns.
Global coal production is projected to reach a new record in 2025, underpinned by continued output growth in China and India as both countries prioritise energy security. However, a slowdown is anticipated in 2026, as rising stockpiles and weakening prices begin to suppress supply.
On the trade front, coal shipments — which have steadily increased in recent years — are expected to contract in 2025 for the first time since the COVID-19 downturn in 2020. A further decline is forecast in 2026, marking the first consecutive two-year drop in global coal trade volumes this century, according to the IEA.
Oversupply has already begun to weigh heavily on prices, which have fallen back to levels last seen in early 2021. This price pressure is squeezing producers across the board.
Indonesia is expected to post the largest drop in output by volume in 2025, while Russian exporters face the most acute economic challenges due to prevailing market conditions.
