By 2022, global coal demand is expected to reach 5.53-billion tonnes of coal equivalent, the same as the average of the last five-year period, which means that coal use will have had a decade-long period of stagnation, according to nonprofit organisation that advocates for a clean and affordable energy the International Energy Agency (IEA).

“Global demand for coal should remain nearly flat until 2022, resulting in a . . . stagnation for coal consumption,” states the IEA yearly coal market report.

According to the IEA’s ‘Coal 2017’ report, global coal consumption fell 1.9% to 5.357-billion tonnes last year, the second year of decline, because of lower gas prices, a surge in renewables and improvements in energy efficiency. Further, coal demand is down 4.2% over the last two years, nearly matching the two-year decline in the early 1990s.

Meanwhile, the share of coal in the global energy mix is forecast to decline to 26% in 2022, from 27% in 2016 as a result of sluggish demand, compared with other fuels. Although coal-fired power generation increases by 1.2%/y through 2016 to 2022, its share of the power mix falls to just below 36% by 2022, which would be the lowest level in 40 years.

“The energy system is evolving at a rapid pace all around us, with a more diversifying fuel mix, and the cost of technologies going down. But, while everything else is changing, global coal demand remains the same,” IEA director for energy markets and security Keisuke Sadamori says.

Despite coal demand dropping in China, the US and the European Union (EU) in 2016, demand increased in India and across many parts of South-East Asia, and shows no signs of slowing down. “For instance, despite the rapid growth in renewables, Indian coal-fired power generation is expected to grow almost 4% a year through to 2022.”

While India will be increasingly important to global coal markets, China will remain the key driver. The potential for coal demand growth in China is limited, but the country’s supply-side reforms will be critical factors for coal prices in the coming years. Meanwhile, the EU, which accounts for just 6% of global demand, is set to become an increasingly marginal player, Sadamori explains in a statement.

Low-Carbon Technologies
The IEA further highlights that urgent action is needed to support carbon capture, utilisation and storage (CCUS) technologies, which made important strides last year but still lag far behind other low-carbon technologies.

Sadamori says there is a broad agreement among global energy leaders from governments and industry that urgent action is needed to support CCUS, without which the climate challenge will be much more difficult to tackle.

“This is why the IEA is working to give a new momentum to this essential technology, and is committed to pushing the global dialogue forward.”

Consequently, in November last year, the IEA organised a global CCUS summit in Paris that was co-chaired by US Secretary of Energy Rick Perry and IEA executive director Dr Fatih Birol, and that brought together more than 20 countries and CEOs of the world’s top energy companies to focus on CCUS technology.

Sadamori concludes by stressing that governments and companies need to step up their policy support and investments in the coal sector to meet global climate goals.