Global coal demand is expected to reach a record level of 8.85 billion tons in 2025, which is 0.5% higher than the previous year; however, a gradual decline is anticipated in the following years. This data is included in the December report from the International Energy Agency (IEA).
This is reported by Finway
Key Factors Influencing Global Demand
In 2025, various factors influenced coal consumption worldwide, including weather conditions, fuel prices, and government energy policies. In certain regions, these factors caused unexpected fluctuations in demand, sometimes contradicting usual trends.
Specifically, a strong and early monsoon season in India led to a decrease in electricity demand and contributed to an increase in hydropower production. By the end of the year, coal-fired electricity generation in India is expected to decline year-on-year — this marks only the third such occurrence in the last fifty years.
In the European Union, a decrease in hydropower and wind energy production forced an increase in the use of coal-fired power plants in the first half of the year. However, by the end of 2025, coal demand in the EU is projected to decrease by approximately 2% compared to the previous year.
“The early and strong monsoon season in India reduced electricity demand and increased hydropower production. Annual coal-fired electricity generation in the country is expected to decline year-on-year by the end of 2025 — only the third time in the last 50 years.”
Forecast for Future Energy Market Development
According to the IEA’s forecasts, global coal demand is expected to stabilize in the coming years, with a gradual reduction of 3% anticipated by 2030 compared to the 2025 level. By the end of the current decade, coal-fired electricity generation worldwide is projected to fall below 2021 levels.
At the same time, significant growth in electricity demand may support coal consumption in the short term. However, the development of renewable and nuclear energy, along with increased liquefied natural gas volumes in the market, will gradually displace coal from the energy mix.
Coal use in industry is expected to decline by less than 1% annually until 2030, and this decline is anticipated to be offset by an increase in coal gasification facilities, primarily in China.