Home Energy and Economy Record High Coal Consumption Projected for 2024 Worldwide

Record High Coal Consumption Projected for 2024 Worldwide

by Republican Digest Team
Global Coal Usage To Reach New Historic Record In 2024

Global Coal Consumption: Trends and Projections

According to the International Energy Agency (IEA), coal consumption reached an unprecedented level of 8.77 billion tonnes last year, propelled by a significant increase in coal usage in China and India. The demand for coal on a global scale is anticipated to rise by approximately 1% in 2024, slightly decreasing from the 2.4% growth observed in 2023. While industrial consumption is on the upswing, the primary contributor to the rising coal demand remains the power sector. Projections indicate that coal-based electricity generation will continue to grow, further augmenting the need for coal worldwide. At a regional level, coal demand in China is expected to see a 1% rise in 2024, reaching a staggering 4.9 billion tonnes, while India is poised for a growth exceeding 5%, with demand estimated at 1.3 billion tonnes. Conversely, coal consumption is forecasted to decline in the European Union and the United States, with anticipated reductions of 12% and 5%, respectively, for the same period.

Coal Production Outlook

The growth in coal demand is reflected in global coal production, predicted to achieve a historic high of over 9 billion tonnes in 2024. The bulk of this production is concentrated in three major countries: China, India, and Indonesia. Notably, China dominates the global coal landscape, accounting for approximately half of worldwide coal production. The IEA indicates that coal production in China is expected to increase by about 1% in 2024, consistent with their rising consumption rates.

The Impact of China on Global Coal Trends

The influence of China on global coal markets cannot be overstated. Data from the IEA reveals that China consumes 30% more coal than the rest of the world combined. A significant portion of this consumption, roughly one-third, is associated with power generation. China’s robust demand for electricity is linked to ongoing industrial and economic growth, with its electricity demand growing at a rate faster than GDP since 2021. Factors driving this demand include the electrification of services traditionally powered by other fuels and the emergence of new industries, such as data centers and artificial intelligence. The country also continues to leverage its heavy coal usage to manufacture and export various goods, ranging from solar panels to consumer electronics.

India’s Rising Coal Utilization

India’s trajectory in coal consumption presents a similar story. Despite the country’s increasing investment in renewable energy sources, coal usage is projected to be the most significant during the coming years, primarily driven by the power sector and industrial growth. As indicated, coal consumption in India is projected to rise over 5% in 2024. Furthermore, by 2025, India’s coal consumption will nearly triple that of the United States. The Indian government is proactive in promoting domestic coal production to reduce reliance on imports, with significant initiatives supporting companies such as Coal India in ramping up production.

Challenges in Coal Production in the United States

In the United States, the landscape is notably different, where efforts to reduce coal production and demand have been spurred by environmental, social, and governance (ESG) policies. Significant financial entities like BlackRock, State Street, and Vanguard, heavily invested in coal companies, appear to be using their influence to restrict coal production. Texas Attorney General Ken Paxton, along with several other state attorneys general, has initiated legal action against these companies. The allegations include collusion in shareholder governance, which purportedly limits production capabilities of coal firms, particularly affecting smaller producers whose access to financing has been hindered by tight ESG regulations.

Conclusion

The current trajectory of coal consumption and production presents a complex narrative. The IEA’s findings indicate that, despite global efforts to transition towards cleaner energy sources, coal demand is set to rise by 1% in 2024, driven primarily by China and India. Both countries, through their heavy reliance on coal for energy generation, appear to be prioritizing economic growth and export capabilities over commitments made under the Paris Agreement. In stark contrast, Europe and North America are experiencing significant reductions in coal use, driven by governmental policies and support from financial institutions advocating for sustainable practices. With coal combustion accounting for 40% of global energy-related carbon emissions, the transition away from coal remains an ongoing challenge that warrants attention from policymakers worldwide.

FAQs

What are the main drivers of global coal demand?

The primary drivers of global coal demand include electricity generation in the power sector and industrial consumption. In countries like China and India, economic growth and increasing electricity demand are central factors fueling coal consumption.

How does China’s coal consumption compare to the rest of the world?

China consumes 30% more coal than the rest of the world combined, highlighting its dominant position in the global coal market. A substantial portion of this coal is used in power generation.

Is India increasing its coal production?

Yes, India is committed to increasing coal production in an effort to reduce dependency on coal imports. The government is encouraging domestic production, with expectations of significant growth in the coming years.

How are ESG strategies impacting coal production in the United States?

ESG strategies have led to restrictions in coal production in the U.S. as financial firms leverage their influence within coal companies to promote sustainability. This has made it challenging for smaller coal producers to secure financing and expand their operations.

What is the outlook for coal production globally?

Global coal production is projected to reach a record high of over 9 billion tonnes in 2024, with increases anticipated in major producing countries like China, India, and Indonesia.

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