Mining and Heavy Industries

IEA forecasts stall in global coal demand

Coal. Photo: Shutterstock

The International Energy Agency has delivered a weaker outlook for coal over the next half-decade, with a growth in alternate fuels to drive down global demand.

The international body, whose 29 member countries include Australia, New Zealand, Germany, the UK and the United States, this week handed down its 2016 coal market report for the medium term, which it classes as the next five years.

It said global coal demand will stall between now and 2021, “as the appetite for the fuel wanes and other energy sources gain ground”. The report forecasts the share of coal in global power generation will drop from 41% in 2014 to 36% by 2021, “driven by lower demand from China and the United States, along with fast growth of renewables and strong focus on energy efficiency”.

But the situation is a bit more complex than it seems, the IEA said.

“In a sign of coal’s paradoxical position, the world is still highly dependent on coal,” the body said. “While coal demand dropped in 2015 for the first time this century, the IEA forecast will not reach 2014 levels again until 2021.

“However such a path would depend greatly on the trajectory of China’s demand, which accounts for 50% of global coal demand – and almost half of coal production – and more than any other country influences global coal prices.”

IEA energy markets and security directorate Keisuke Sadamori expanded on the multiple factors pulling coal in separate directions.

“Because of the implications for air quality and carbon emissions, coal has come under fire in recent years, but it is too early to say that this is the end for coal,” Sadamori said from Beijing.

“Coal demand is moving to Asia, where emerging economies with growing populations are seeking affordable and secure energy sources to power their economies.

“This is the contradiction of coal – while it can provide essential new power generation, it can also lock-in large amounts of carbon emissions for decades to come.”

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