Global Coal Demand Expected to Remain Steady Through 2025-2026, Analysis Reveals

2 min readJul 31, 202510:13 AM

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China’s coal demand is anticipated to experience a modest decline this year, a turn of events that reflects broader trends in the global energy landscape. The International Energy Agency (IEA) projects that overall global coal consumption will remain stable, continuing on a plateau throughout 2024 and 2025, despite some short-term market fluctuations seen in the first half of 2025.

Global Coal Demand Holds Steady

“We expect the world’s coal consumption to remain broadly flat this year and next, as previously forecasted,” stated Keisuke Sadamori, the IEA Director of Energy Markets and Security. However, he cautioned that fluctuations related to weather and the unpredictable economic and geopolitical landscape could still arise.

The IEA’s recent Coal Mid-Year Update revealed that global coal demand surged to an unprecedented high in 2024, climbing by 1.5% to reach 8.8 billion tonnes. This spike was largely fueled by increased usage in major coal-hungry nations like China, India, and Indonesia, effectively outweighing declines in advanced economies throughout Europe, North America, and Northeast Asia.

“Looking forward, global coal production is set to reach a new peak in 2025, propelled by ongoing growth in output from China and India.”

Shifts in Energy Consumption Patterns

Yet, the narrative took a twist in the first half of 2025, as demand in China and India softened, attributed to a slowdown in electricity consumption and a robust surge in power generation from renewable sources. On the other side of the globe, coal consumption in the United States saw an approximately 10% increase, driven by rising electricity demand and escalated natural gas prices prompting greater reliance on coal for power generation. Meanwhile, the European Union’s coal demand remained steady, balancing declines in industrial usage with heightened electricity generation needs.

What Lies Ahead for Coal Production

While the report acknowledges these transient shifts in demand, it underscores that the fundamental factors influencing global coal consumption are largely unchanged. The IEA forecasts a slight uptick in coal demand for 2025, followed by a subtle decrease in 2026, nudging demand just below 2024 levels. Specifically for China, coal demand is expected to dip slightly by less than 1% this year, maintaining the power sector as the primary driver for coal use both domestically and internationally.

Looking forward, global coal production is set to reach a new peak in 2025, propelled by ongoing growth in output from China and India. However, by 2026, production is likely to decline as soaring stock levels and plummeting prices begin to impact supply. It appears that as renewables take the stage, coal may find itself igniting a slow fade.

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Questions & Answers

What is the projected trend for China’s coal demand this year?

Coal demand in China is expected to decline slightly by less than 1% this year, influenced by weaker electricity consumption and stronger growth in renewable energy sources.

How did global coal demand perform in 2024?

Global coal demand reached an all-time high in 2024, increasing by 1.5% to a total of 8.8 billion tonnes, largely due to rising consumption in major markets like China, India, and Indonesia.

What are the expectations for coal production globally in the coming years?

Global coal production is anticipated to hit a new record in 2025, propelled by ongoing increases in China and India, but is expected to decline by 2026 due to high stock levels and decreasing prices impacting supply.

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