By Mark Jaffe, EUCI energy writer
Global demand for coal is projected to decline slightly by 2030 as coal-fired generation faces increasing competition from renewables, natural gas and nuclear generation, according to the International Energy Agency (IEA).
Global coal demand rose 0.5% to a record 8.85 billion tons in 2025. China, which accounts for half of all global demand, India and Southeast Asia are principal consumers.
Still, an early and intense 2025 monsoon season in India resulted in a decline in annual coal use for only the third time in five decades, while China showed no significant increase in demand.
In the U.S., high natural gas prices and a shift in policy by the Trump administration, which included issuing orders to keep open coal-fired plants slated for closure, led to the country posting an 8% increase in demand in 2025 and the largest absolute gain – approximately 37 million tons.
During the past 15 years, U.S. coal demand has been dropping at an average rate of about 6% a year. The IEA projects that 6% annual decline to continue through 2030 as renewable generation continues to grow and coal-fired plants are retired.
The agency cautions higher demand for electricity than expected, coal plant retirements stalling or high natural gas prices could affect the U.S. rate of decline in demand for coal.
After two years of double-digit declines, lower hydropower and wind output in the European Union pushed up coal power generation in the first half of the year, leading to a modest 2% drop in coal demand for the year.
China consumes 30% more coal than the rest of the world combined, but in 2025, it reduced imports as it faced an oversupply and sluggish demand. The IEA expects that trend to continue.
Chinese coal production grew by 1% and in India, facing difficult weather conditions and weaker demand, production was flat. Indonesian coal production is expected to decline in 2025 for the first time since the COVID-19 pandemic due to shrinking international coal trade.
In contrast, U.S. coal production is set to increase, spurred by domestic demand and policy support, which included opening more federal land for coal leasing and reducing royalty rates.
Prices for thermal coal have also dropped over the past two years after spiking to record highs during the energy crisis linked to Russia’s invasion of Ukraine in 2022. Prices were about 10% lower in Europe and 20% lower in Asia compared with 2024.
The main increase in coal demand over the next five years is projected to come from India with a 3%-a-year average growth rate, leading to cumulative growth of 200 million tons.
Southeast Asia is forecast to see the most rapid rate of increase with demand growing more than 4% per year.
By 2030, global coal demand is expected have dropped by 3% from 2025 levels to 8.58 billion tons – the same level as in 2023.
“This is largely driven by shifts in the power sector, which accounts for two-thirds of total coal consumption today,” the IEA said. Coal demand from industry is expected to remain more durable.
“There are many uncertainties affecting the outlook for coal, most notably in China, where developments – from economic growth and policy choices to energy market dynamics and weather – will continue to have an outsize influence on the global picture,” Keisuke Sadamori, IEA director of energy markets and security, said in a statement.
“More broadly, trends in electricity demand growth and the integration of renewables worldwide could impact coal’s trajectory,” Sadamori said.
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