In 2022, global coal demand was expected to increase and reach an all-time high exceeding 8 billion tonnes due to the energy crisis caused by the war and other factors.
The past year is predicted to have seen the highest coal consumption on record, with total consumption exceeding 8 billion tonnes for the first time, a new record high surpassing 2013's consumption record. This reflects a 1.2% increase in consumption over the previous year. Currently, coal is the single most significant contributor to global carbon dioxide emissions.
“Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions. At the same time, there are many signs that today’s crisis is accelerating the deployment of renewables, energy efficiency, and heat pumps – and this will moderate coal demand in the coming years. Government policies will be key to ensuring a secure and sustainable path forward.”
- Keisuke Sadamori, the IEA’s Director of Energy Markets and Security.
Coal consumption is forecast to maintain its present levels through 2025. Although it is anticipated that wealthy nations will dramatically reduce their coal consumption, rising demand in developing Asian economies will more than likely offset this trajectory.
Who is the Biggest Consumer?
Overall Asian countries rely heavily on coal as an energy source, therefore, being the largest contributors to coal consumption, with China, India, and Indonesia being the largest consumers.
China remains the largest consumer of coal in 2022, with a 0.4% increase and accounting for 53% of the global demand. China has recently declared it will be increasing its coal production from now till 2025 to minimize the risk of a repeat of the energy crisis faced over the past year.
India, however, has the largest increase of 7%, accounting for a total of 13%.
The figures for Europe and the United States are considerably lower, contributing to only 6% of the global statistics. While the United States is reducing its figures due to an exchange from coal to gas-fired generators, Europe’s figures are increasing.
Many closed-down coal-powered plants have reopened in large European countries due to their current energy crisis.
What has caused the energy crisis?
The energy crisis began with the spread of COVID-19. This was the result of a drop in consumer expenditure during lockdowns and then a subsequent spike in consumer demand for products and services, for which producers were unprepared due to pandemic-related budget cuts. This saw a rise in demand that could not be met, leading to a price surge.
“Europe – and the European Union in particular – has been one of the regions hardest hit by the energy crisis, given its reliance on Russian pipeline supplies of natural gas.”
The conflict between Russia and Ukraine has now intensified. Numerous European countries have imposed severe sanctions on Russia following their attack on Ukraine, including buying their natural gas.
As a result of the pressures brought on by the global energy crisis, particularly the increases in natural gas prices, coal prices reached unprecedented levels in March and then again in June.
Reduction in Natural Gas Production
With the conflict between Russia and Ukraine, European countries have to switch from natural gas to coal production. There has been a sharp increase in natural gas prices, causing consumer countries to search for substitute energy sources leading to the rise in coal consumption.
Weak nuclear power generation and extreme weather have also contributed to a reduction in natural gas production. Australia is currently one of the largest natural gas suppliers; however, due to extreme weather conditions, including forest fires and torrential rain, there has been a decrease in natural gas production.
Extreme weather has also been seen in China. Coal consumption increased over the summer of 2022 due to a heat wave and a drought creating a higher coal demand.
Coal is considered an attractive energy source because it is a cheap way to generate power. However, it is the biggest contributor to the climate crisis and the largest source of carbon dioxide emissions, accounting for an estimated 40% of global greenhouse gas emissions.
Is renewable energy the future?
Counteracting Coal Consumption
Large organizations, including the G7, have started to take action. G7 has previously reached an $8.5 billion agreement with South Africa, known as Just Energy Transition Partnership, to close down its thriving coal industry.
Current negotiations with Vietnam and Indonesia include initial monetary offers of approximately $5 billion and $10 billion, respectively. The pace of negotiations with India has slowed because settlement numbers have yet to be mentioned.
"Additional time may be required to finalize a JETP, with development more probable during India's G20 presidency."
Multiple nations, such as Norway and Denmark, are contributing privately and publicly, and New Zealand is contemplating joining the effort.
What Does the Future Hold for Coal?
It is already forecasted that renewables will be sought-after, and coal demand will fall in wealthy countries in the next few years. However, there is a long way to go, particularly within developing countries in Asia.
They are set to increase coal use to increase their economy, with China and India having the biggest impact on global coal demand.
European coal demand is expected to decline by 2025 to below the figure that it was in 2020.
It is anticipated that renewable energy sources will increasingly substitute coal for electricity generation in affluent economies.
A new IEA report suggests that the world needs to considerably reduce coal's carbon dioxide emissions to avoid the severe consequences of climate change. The report urges drastic action to mobilize funding for clean energy alternatives, which are safe and affordable, especially in developing nations.
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Rachel Brown is an English Literature and Creative Writing student at Keele University. She is also a content writer at the International Youths Organization for Peace and Sustainability.
Inputs and Edits by Sovena Ngeth.