China's Increasing Reliance on Renewables Expected to Reduce Global Coal Demand
China's increasing reliance on renewable energy sources is projected to reduce global coal demand by around 2% over the next three years, as per the International Energy Agency This shift indicates a peak in coal demand, with China leading the way towards a cleaner and more sustainable energy future
The International Energy Agency announced on Friday that global coal demand may have reached its peak this year and is expected to decrease by approximately 2% over the next three years. This projection comes as China continues to invest in renewable energy sources. This marks the first time the Paris-based agency has forecasted a decline in coal consumption over a three-year period.
The International Energy Agency (IEA) reported that demand for coal is projected to reach a peak of 8.54 billion metric tons (9.4 billion tons) this year, exceeding the previous record of 8.42 billion metric tons in 2022. However, the agency anticipates a decline in demand starting in 2024, with a 2.3% drop expected by the end of 2026.
The forecast indicates that there is a clear turning point for coal on the horizon, according to Keisuke Sadamori, the IEA's director of energy markets and security. He stated in a press release that while global coal demand has experienced declines in the past, they were short-lived and typically due to extraordinary events such as the collapse of the Soviet Union or the Covid-19 crisis.
The current decline seems to be more permanent this time, thanks to the ongoing growth of clean energy technologies. According to the IEA, China will be responsible for more than half of the renewable energy capacity added in the next three years, despite currently being the largest global consumer of coal.
At the COP28 summit on Wednesday, a new global climate agreement was reached that includes an unprecedented push for countries to move away from fossil fuels. However, the agreement's ambiguous language may still allow certain governments to only take minimal action. Despite this, the agreement does not go as far as requiring the world to completely eliminate oil, coal, and natural gas, which had been advocated for by over 100 countries and numerous climate organizations.
China will have the last word
The IEA expects coal demand to have fallen this year in nearly all advanced economies, driven by a record plunge of around 20% in both the European Union and the United States.
The demand for coal is shifting towards the east, with an expected 5% increase in China and a more than 8% rise in India due to growing electricity needs and low hydropower output. The IEA stated that the global reduction in coal consumption depends largely on China's ability to expand its clean energy capacity in the next three years.
"The presence of hydropower plays a crucial role in the short term, as coal is utilized as an alternative when hydropower falls short in China," stated the agency in its report, emphasizing that the country would have the final say.
Recently, the Chinese government released a plan of action to enhance air quality, pledging to "actively pursue the development of new and clean energy" and tightly regulate the use of coal.
The plan aims to reduce hazardous airborne particles known as PM2.5 by 10% by 2025 compared to 2020 levels. This involves promoting non-fossil fuel energy, electric vehicles, and transporting more freight by rail and waterways instead of roads. According to the IEA, global coal consumption is expected to exceed 8 billion metric tons in 2026, requiring a faster decline in "unabated coal" to limit global warming to 1.5 degrees Celsius above pre-industrial levels.
Unabated coal refers to the burning of coal without capturing and storing its planet-heating carbon dioxide emissions, an IEA spokesperson told reporters.
Laura He contributed to this article.
