In 2022, coal demand reached a new record high of 8 415 Mt, increasing by 4%. The increase was mainly backed by growth in countries that rely heavily on coal, such as China and India. Furthermore, extraordinarily high gas prices and generally weaker nuclear power and hydropower production drove growth in demand for coal to generate power. Coal demand for power generation rose by 4% to 5 687 Mt. Coal use for non-power purposes rose by 3.7% to 2 728 Mt.

Accounting for more than half of global coal demand, China is by far the world’s largest coal consumer. In 2022, the country’s overall coal demand rose by 4.6% to a total of 4 520 Mt, with coal taking a share of more than 60% in power generation. India, the world’s second-largest coal consumer comprising about 14% of global coal demand, recorded an increase of 9%, totalling 1 162 Mt.

In 2023 global coal demand is expected to have increased only marginally by 1.4%, albeit reaching a new all-time high of about 8 536 Mt. Coal demand growth is losing momentum due to lukewarm economic prospects paired with the weakening of the factors that pushed coal-fired power generation in 2022. Meanwhile, global coal demand is expected to continue moving eastwards, with China, India, and ASEAN countries combined consuming three-quarters of global demand. At the start of the century, that share was around 35%, lower than the combined share of the European Union and the United States at that time.

In absolute terms, coal demand in 2023 is estimated to have increased most strongly in China (up 220 Mt, or 4.9%), followed by India (up 98 Mt, or 8%) and Indonesia (up 23 Mt, or 11%). The largest declines are expected in the European Union (down 107 Mt, or 23%) and the United States (down 95 Mt, or 21%), driven mainly by the electricity sector, but also by weak industrial activity. Data and forecasts for Russia, currently the fourth largest coal consumer, are difficult to estimate, given ongoing war against Ukraine. Likewise, Ukraine’s forecast is quite uncertain.

For our forecast period until 2026 we expect to see a trend emerging of declining worldwide coal demand, starting in 2024. With growth in India and ASEAN offsetting declines in the European Union and the United States, China remains the decisive player for setting the trend of global coal demand. Higher renewable growth than overall electricity demand growth is likely to push global coal consumption on a downward trajectory. This would imply that coal is likely to peak in 2023.