Global coal demand set to fall as China uses more renewable resources

Global coal demand is likely to have peaked this year, and could drop by about 2 per cent over the next three years as China brings more renewable energy sources online, the International Energy Agency said, according to a media report.

It's the first time the Paris-based agency has predicted a drop in appetite for the dirty fuel over a three-year period, CNN reported.

Demand is on track to peak at 8.54 billion metric tonnes (9.4 billion tonnes) this year, surpassing the previous record of 8.42 billion metric tonnes hit in 2022, the IEA said in its annual coal market report.

The agency expects demand to start falling in 2024, and drop by 2.3 per cent by the end of 2026.

Keisuke Sadamori, the IEA's Director of Energy Markets and Security, said the forecast showed that “a turning point for coal is clearly on the horizon”, CNN reported.

“We have seen declines in global coal demand a few times, but they were brief and caused by extraordinary events such as the collapse of the Soviet Union or the Covid-19 crisis,” Sadamori said in a press release.

“This time appears different, as the decline is more structural, driven by the formidable and sustained expansion of clean energy technologies.”

More than half of the renewable energy capacity coming online in the next three years will be in China, the IEA said. The country currently accounts for over half of global demand for coal, according to the agency, CNN reported.