The International Energy Agency stated on Friday that the demand for coal is expected to have peaked globally this year. And may decline by roughly 2% over the following three years as China increases the use of renewable energy sources. This is the first time the Paris-based organization has forecast a three-year decline in demand for the dirty fuel.
According to the IEA’s annual coal market report, demand is expected to peak at 8.54 billion metric tonnes (9.4 billion tonnes) this year. It exceeded the previous record of 8.42 billion metric tonnes set in 2022.
According to the agency, demand will begin to decline in 2024. It will do so by 2.3% by the end of 2026.
The IEA’s director of energy markets and security, Keisuke Sadamori, stated that the prediction indicated that “a turning point for coal is clearly on the horizon.”
A press release from him stated, “We have seen brief declines in the global demand for coal, but they were caused by extraordinary events like the collapse of the Soviet Union or the Covid-19 crisis.
“This time seems different because the decline is more structural and is being fueled by the persistent and powerful growth of clean energy technologies.”
According to the IEA, China will account for more than half of the renewable energy capacity that comes online over the next three years. The nation currently supplies more than half of the world’s coal needs, according to the agency.
A historic call to move away from fossil fuels was made in a new global climate agreement that was reached on Wednesday at the COP28 summit. However, the agreement’s ambiguous wording may allow some governments to take only minimal action.
The agreement does not mandate the global “phase out” of natural gas, coal, and oil, as many climate groups and over 100 countries have demanded.
China is going to “have the last say.”
The demand for coal is predicted by the IEA to have decreased this year in almost all advanced economies, primarily due to a record decline of about 20% in the US and the EU.
Due to low hydropower output and rapid growth in electricity needs, demand is expected to increase by more than 8% in India. By roughly 5% in China this year.
According to the IEA, while global demand for coal is expected to decline over the next three years. China’s ability to increase its share of clean energy is a major factor.
In its report, the agency stated that China would “have the last word” and that “the availability of hydropower is a key variable in the short term since coal is used as a substitute when hydro underperforms in the country.”
The Chinese government promised to “vigorously develop” an action plan to improve air quality last week.
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