Can the world really wean itself off coal?

Consumption of coal, the world's biggest source of electricity and foremost human driver of carbon dioxide emissions, has reached record highs.

Global consumption rose by 1.4% in 2023 and surpassed 8.5 billion tonnes for the first time, according to the latest annual report by energy watchdog the International Energy Agency (IEA). The "staggering" quantities are behind 2023's record-high temperatures, said The Washington Post, and represent the gravest threat to humanity.

This increase "masks stark differences" among regions, said Mining Review, and is largely due to the two most populous countries. India's emissions are projected to have risen by 8.2% in 2023, according to the Global Carbon Budget, while China's are expected to have climbed by 4%. That consumption is projected to increase again by similar amounts this year – despite "ambitious" renewable energy targets – due to rising demand. 

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But for the first time in its forecasting history, the IEA predicts that global coal demand will decline overall – by 2.3% by 2026. Consumption will fall "sharply" in advanced economies this year, including "record drops" in the EU and US of about 20% each, said the report. 

Previously, declines in coal demand were "brief and caused by extraordinary events", said Keisuke Sadamori, IEA director of energy markets and security, such as the collapse of the Soviet Union or the Covid-19 pandemic. This time "appears to be different". The projected decline "could mark a historic turning point".

What the papers said

At the recent Cop28 climate summit in Dubai, a new global deal made "an unprecedented call for countries to transition away from fossil fuels", said CNN. But the agreement fell short of requiring the world to "phase out" coal – despite calls from more than 100 countries and many climate groups. The "vague" language could allow some governments to take "minimal action".

China, the world's largest energy consumer, relies on coal to generate about 60% of its electricity. In December, the government promised to develop new and clean energy and control coal use. But its share of the global electricity consumption is set to jump a third by 2025, according to the IEA.

India, the world's second largest coal producer after China and the third largest energy consumer, also depends on coal for more than three-quarters of its power, said the Financial Times – a reliance that has proved "a point of contention" during Cop summits.

Coal "plays a key role" in India's "high-orbit growth trajectory", an official at the coal ministry told the FT, despite the country's plan to triple renewable energy capacity by 2030, and its Cop commitment in 2021 to phase down the use of coal. India's demand will rise from about 1 billion tonnes a year to 1.5 billion tonnes, the coal ministry said. In December, the government outlined plans to triple output from underground mines by 2028. 

The Indian government argues that without "major advances to renewable technologies" the country "lacks an alternative" to provide energy security, said the FT. The government also argues that rich nations, which contributed the bulk of emissions, carry the greater responsibility.

For example, the US, the world's second largest coal consumer, is responsible for double the consumption per capita of India, according to the Centre for Social and Economic Progress (CSEP). India's coal is also high ash, according to the Brookings Institution, meaning a tonne of US coal emits a third more CO2 than Indian coal. 

What next?

"If India and China are still growing economically at decent rates for the next decade, we're not going to see coal demand disappearing anytime soon," Ian Roper, commodity strategist at Astris Advisory Japan KK, told CNBC.

Although the world is "near peak steel", production will remain steady for "many years", said The Strategist. And decarbonising the industry will require "stupendous" levels of investment – trillions, not billions, of dollars. "It will take decades," said the news site, and will require "massive" Asian participation.

Major expansion of renewable energy capacity – more than half of which is set to occur in China – is behind the projected decrease in coal consumption. But that is subject to China's clean energy roll-out, as well as its weather conditions and shifts in the economy.

"The bottom line," said The Strategist, "is that the world needs Asia to prioritise the energy transition over green steel."