Every pathway that avoids severe impacts from climate change involves early and significant reductions in coal‐related emissions. Coal is both the largest emitter of energy‐ related global carbon dioxide (CO₂) – 15 gigatonnes (Gt) in 2021 – and the largest source of electricity generation, accounting for 36% in 2021, and a significant fuel for industrial use. Comprehensive, integrated policies addressing emissions from all sources are essential for climate action, but reducing emissions from coal needs to be a first‐order priority.

Coal transitions require a special focus because of coal’s high emissions intensity, growing competition from cost‐effective clean energy technologies like renewables, and deep links to jobs and development in coal‐producing regions. Coal is second only to oil in the global energy mix, and coal demand – far from declining – has been hovering at near‐record highs for the past decade. Today’s global energy crisis has led to modest increases in coal consumption in a number of countries, at least temporarily, mainly in response to sky‐high prices for natural gas. Continued high coal use is one of the most visible symbols of the challenge of aligning the world’s actions with its climate ambitions: more than 95% of current global coal consumption occurs in countries that have pledged to achieve net zero emissions. This World Energy Outlook Special Report maps out how to achieve a rapid reduction in emissions from coal while maintaining affordable and secure energy supplies, and tackling the resulting consequences for workers and communities.

The new IEA Coal Transition Exposure Index highlights countries where coal dependency is high and transitions are likely to be most challenging: Indonesia, Mongolia, China, Viet Nam, India and South Africa stand out. A range of approaches, tailored to national circumstances, is essential for the power sector, where almost two‐thirds of global coal is consumed, and in the industry sector, which accounts for another 30%. The social implications are often concentrated in specific regions: coal mining typically accounts directly for less than 1% of national employment, but around 5‐8% in coal‐intensive regions such as Shanxi in China, East Kalimantan in Indonesia, and Mpumalanga in South Africa.

The geographical concentration of coal use marks it out from other globally‐used fuels: China accounts for over half of global coal demand and the share of all emerging market and developing economies exceeds 80%, up from half in 2000. China’s power sector, on its own, accounts for one‐third of global coal demand. China produces more than half of the world’s steel and cement, and so also plays a dominant role in coal use in industry. During this decade, emerging market and developing economies’ share of historical emissions from coal‐fired power generation will overtake that of advanced economies.

Achieving clean energy transitions on the scale and speed required by national climate goals and the global 1.5°C target has dramatic implications for coal. Our analysis considers how the necessary changes can be achieved, using two key scenarios from the World Energy Outlook 2022. The Announced Pledges Scenario (APS) assumes that all net zero pledges announced by governments are met on time and in full. In the APS, global coal demand drops by 70% by mid‐century, alongside declines in oil and gas of around 40%. The Net Zero Emissions by 2050 (NZE) Scenario illustrates a path to achieve the goal of 1.5°C stabilisation in the rise in global average temperatures. In the NZE Scenario global coal use falls by 90% by 2050, and the global power sector is completely decarbonised in advanced economies by 2035, and worldwide by 2040.

A massive scale up of clean sources of power generation, accompanied by system‐wide improvements in energy efficiency, is key to reducing coal use for power and cutting emissions from existing assets. In the APS, global output from existing unabated coal‐fired plants is reduced by nearly 2 500 terawatt‐hours from 2021 to 2030 to get on track for national climate pledges, and 75% of this is replaced by solar PV and wind. Many of the transitions away from coal observed so far have been driven by rapid uptake of solar PV and wind; however, these have typically been in countries where electricity demand was flat or in decline. A key challenge ahead is to achieve such transitions in fast‐growing emerging market and developing economies such as India and Indonesia, where demand for electricity causes generation from coal to increase until the early 2030s in the APS even with a speedy deployment of renewables.

In the APS, around USD 6 trillion in investment is required to 2050 to reduce emissions from coal‐fired power in line with national climate targets. Around 90% of this sum is spent on low‐emissions generation, mainly renewables but also nuclear power, with the remainder for energy storage and expanding and modernising electricity grids. Governments need to set the right policy and regulatory frameworks while the private sector can provide much of the necessary investment. In the NZE Scenario, the cumulative investment required for coal transitions in the electricity sector reaches USD 9.5 trillion to 2050.

Over the period to 2030, emerging market and developing economies outside China require about USD 500 billion in investment to put them on a path to transition securely away from unabated coal in the APS and well over a trillion dollars in the NZE Scenario. The majority of this spending needs to take place in the electricity sector, where clean energy technologies are proven and often competitive. Nonetheless, emerging market and developing economies will require international capital to cover around one‐third of total investment in coal transitions. Public international actors, such as multilateral development banks, can play a vital catalytic role in raising domestic sources of finance and encouraging domestic public investment in clean energy. The transition also requires investment in the coal sector to repurpose or retrofit coal assets and to support coal‐dependent regions; financial channels need to be open to support credible transition plans. Packaging together different elements of coal transitions, as with the Just Energy Transition Partnerships in Indonesia, South Africa and other countries, can be an effective way to gain momentum, mobilise international support, and ensure overall policy coherence.

Unlike the power sector, clean alternatives to coal in some key industrial applications such as steel and cement are not yet readily available. In the short term, efficient use of materials and energy, alongside with some fuel switching, are the best ways to reduce emissions in the industry sector. But it is crucial to use the coming decade to drive the development and commercial deployment of innovative new clean energy technologies. Progress depends to a large extent on public finance to accelerate technology demonstration and diffusion. Advanced economies need to take the lead: the commitment taken at the Global Clean Energy Action Forum in September 2022 to mobilise USD 94 billion for clean energy demonstration projects is a welcome step.

Industrial materials and products are traded in global markets and producer margins tend to be thin; switching to zero or near‐zero emissions technologies could lead to a loss of competitiveness without mechanisms to compensate for the increased risks and costs. Some USD 6 trillion is required to reduce coal emissions from industry in the APS to 2050 by rolling out near‐zero emissions technologies and infrastructure, for example, to transport CO₂ or low‐emissions hydrogen. Government co‐ordination and support is essential, for example via carbon contracts for difference or through policies – such as sustainable procurement – that can create demand for industrial products with a substantially lower emissions footprint.

International co‐operation, public financial support and well‐designed integrated approaches that incorporate the need for people‐centred transitions will be essential in the move away from unabated coal. Coal transitions are not just about coal: they are about building the clean alternatives that can provide the same energy services affordably and securely, but without the emissions. They are also fundamentally about people, and making sure that the promise of a more secure and sustainable energy sector does not leave coal‐ dependent communities behind. This is a global effort, and there is no more important task in energy transitions than to get coal transitions right.