Record global coal consumption threatens 'Net Zero' pledges

Global leaders and their governments may have pledged to reduce coal consumption to make the world greener, but coal power’s sharp rebound has taken it to a new record in 2021 and will further go up till 2024, threatening net zero goals. Mainly driven by power demand in China and India, global power generation from coal jumped by 9% in 2021 to an all-time high of 10,350 terawatt-hours, undermining efforts to reduce global greenhouse gas emissions, estimates the International Energy Agency (IEA).

It estimates the global coal consumption increased by 6% to about 7,906 million tonnes (MT) in 2021, similar to the 2010 increase that followed the global financial crisis. Global coal consumption in 2019 before Covid-19 was 7,801 MT. With the impact of the Covid-19 pandemic, total coal consumption had declined 4.4% in 2020, to 7,456 MT. In China, where more than half of global coal-fired electricity generation takes place, coal power was estimated to grow by 9% in 2021 despite a deceleration at the end of the year. Demand for coal fired power in India was estimated to grow by 12% in 2021, said IEA.

Further, the global energy agency estimates although coal demand is anticipated to grow slower after the strong recovery of 2021, it will further rise to an all-time high of 8,031 MT in 2024. China’s coal consumption is expected to increase by 159 MT (+4%), while demand rises 125 MT (+13%) in India and 74 MT (+17%) in the United States. Coal consumption is also expected to recover in other regions, including the European Union (+45 MT) and Southeast Asia (+14 MT).

IEA also estimates coal-fired power generation during 2021-2024 to increase 4.1% in China, 11% in India and 12% in Southeast Asia, and a return to declining trajectories is expected in the United States (-21%) and the European Union (-30%).

“The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action,” said Keisuke Sadamori, Director of Energy Markets and Security at the IEA. “Asia dominates the global coal market, with China and India accounting for two-thirds of overall demand. These two economies – dependent on coal and with a combined population of almost 3 billion people – hold the key to future coal demand,” he said.

The rebound of coal demand in 2021 was being driven by rapid economic recovery after Covid-19 slowdown which has pushed up electricity demand much faster than low-carbon supplies can keep up. The steep rise in natural gas prices has also increased demand for coal power by making it more cost-competitive. In 2020, the decline in worldwide electricity consumption (-0.5%) and low natural gas prices caused coal-fired generation to drop 3.8% (‑380 TWh), which reduced consumption of both steam coal (-3.6% to 5,735 MT) and lignite (-13% to 621 MT).