Geneva DryTMS Awards 2023IMPA EventsViganTelestackSailors Society
  • Port of South Louisiana
  • Geneva Dry
  • TBA Group
  • Sailors Society
  • Vigan
  • Port of Stockton

2021 Coal demand rebound set to be short-lived

2021 Coal demand rebound set to be short-lived

(Posted on 22/12/20)

A global economic recovery in 2021 is expected to drive a short-lived rebound in coal demand following the major drop this year triggered by the Covid-19 crisis, according to a new report from the International Energy Agency.

However, there is little sign that the world’s coal consumption is set to decline substantially in the coming years, with rising demand in some Asian economies offsetting declines elsewhere. As coal is by far the single largest source of global energy-related carbon emissions, the trends outlined in the report pose a major challenge to efforts to put those emissions on a path compatible with reaching climate and sustainable energy goals.

The past two years have seen historic falls in global coal demand, led by unprecedented drops in the United States and Europe, says Coal 2020, the latest edition of the IEA’s annual market report on the sector. A 1.8% decline in coal demand in 2019 resulted mainly from weak growth in electricity demand and low natural gas prices. Latest estimates from the IEA suggest coal demand will have plunged by a further 5% in 2020 on the economic fallout from Covid-19.

“The Covid-19 crisis has completely reshaped global coal markets. Before the pandemic, we expected a small rebound in coal demand in 2020, but we have since witnessed the largest drop in coal consumption since the Second World War,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security. “The decline would have been even steeper without the strong economic rebound in China – the world’s largest coal consumer – in the second half of the year.”

Based on the assumption of a recovery in the world economy, the IEA report forecasts a 2.6% rise in global coal demand in 2021, driven by higher electricity demand and industrial output. China, India and Southeast Asian economies account for most of the growth, although the United States and Europe may also both see their first increases in coal consumption in nearly a decade. However, global coal demand in 2021 is still forecast to remain below 2019 levels and could be even lower if the report’s assumptions for the economic recovery, electricity demand or natural gas prices are not met.

The rebound in coal demand in 2021 is set to be short-lived, with coal use forecast to flatten out by 2025 at around 7.4 billion tonnes. This would make 2013, when global coal demand reached 8 billion tonnes, coal’s all-time peak. But while coal’s share in both the electricity mix and the overall energy mix are in steady decline, coal use in absolute terms is not set for a rapid decline in the immediate future.

“Renewables are on track to surpass coal as the largest source of electricity in the world by 2025. And by that time, natural gas will likely have taken over coal as the second largest source of primary energy after oil,” said Mr Sadamori. “But with coal demand still expected to remain steady or to grow in key Asian economies, there is no sign that coal is going to fade away quickly.”

The future of coal will largely be decided in Asia. Today, China and India account for 65% of global coal demand. With Japan, Korea, Taiwan and Southeast Asia included, that share rises to 75%. China, which currently accounts for half of the world’s coal consumption, will be especially influential. By 2025, the European Union and United States will account for less than 10% of global coal demand, down from 37% in 2000. This will make the impacts of any further changes in demand in these markets very limited.

After a major drop in recent years, global coal demand is forecast to rise by 2.6% in 2021 before flattening out to 2025.

Latest News

Rio Tinto progresses Rhodes Ridge to next study phase

(Posted on 07/12/23)

Rio Tinto has approved a $77 million (A$110 million) pre-feasibility study (PFS) to progress development... Read more


Rio Tinto and Giampaolo complete aluminium recycling transaction

(Posted on 03/12/23)

Rio Tinto and Giampaolo Group have completed a transaction to form the Matalco joint venture, combining... Read more


Partnership creates UAE’s largest galvanising pool in KEZAD

(Posted on 03/12/23)

Khalifa Economic Zones Abu Dhabi – KEZAD Group, the largest operator of integrated and purpose... Read more


ADM launch of regenerative agriculture programme in Brazil

(Posted on 26/11/23)

ADM, a leader in sustainable agriculture supply chains, has announced an important expansion of its... Read more


$140m Investment agreement to build all-in-one nickel refinery

(Posted on 17/11/23)

Trafigura, a market leader in the global commodities industry, has agreed to invest in an all-in-one... Read more


ADM and Marathon take next step in meeting renewable fuels demand

(Posted on 17/11/23)

ADM and Marathon Petroleum Corp. have celebrated the opening of their joint venture soybean processing... Read more


US Grains Council bids farewell to Castillo

(Posted on 13/11/23)

Former U.S. Grains Council (USGC) Director of Global Programmes Alejandra Castillo was named the successor... Read more


Rio Tinto and Codelco complete Nuevo Cobre exploration agreement

(Posted on 13/11/23)

Rio Tinto has completed the acquisition of PanAmerican Silver’s stake in Agua de la Falda and... Read more


New Cargill soybean processing plant connects farmers to growing demand

(Posted on 05/11/23)

Cargill has completed an expansion and modernization project at its integrated soybean crush and refined... Read more


BHP approves US$4.9bn investment in stage two of Jansen potash project

(Posted on 31/10/23)

BHP has approved an investment of US$4.9 billion (C$6.4 billion) for stage two of the Jansen potash... Read more


Port of South LouisianaTBA GroupPort of StocktonVan AalstBühler GmbHCimbria
  • Van Aalst
  • Telestack

Subscribe to our newsletter

Keep up to date with the latest global news in bulk cargo handling and shipping