IEA forecasts global coal demand near record 8.8 billion tonnes through 2026
The IEA's Coal Mid-Year Update projects global coal demand staying near the 2024 record of 8.8 billion tonnes through 2025 and 2026, shaped by China and India. Continued coal reliance in key markets challenges net-zero alignment, with direct relevance to India's energy-security and decarbonisation balancing.
The International Energy Agency's Coal Mid-Year Update, released July 2025, projects global coal demand staying near the all-time high of 8.8 billion tonnes recorded in 2024 through 2025 and 2026, with a broadly flat trajectory shaped by China and India. The 2024 record was driven by rising consumption in China, India, Indonesia, and other emerging economies, offsetting declines across the EU, North America, and northeast Asia. In the first half of 2025, coal demand declined in China and India amid weaker electricity growth and surging renewable generation.
Coal-reliant emerging economies, particularly China and India, plus producers and traders are directly affected. US coal consumption grew approximately 10% in early 2025 amid higher electricity demand and elevated natural gas prices, while EU demand stayed mostly stable. China alone consumes nearly 30% more coal than all other countries combined, reinforcing its outsized influence. The IEA forecasts a full-year US coal demand increase of 7%, an EU decline of nearly 2%, and a modest Chinese decrease under 1%.
ESG stakeholders should closely monitor geopolitical and economic signals plus policy changes affecting energy-transition timelines, since continued coal reliance challenges net-zero alignment where renewables grow but are not yet dominant. While production is projected to hit a new record in 2025 driven by China and India, global coal trade volumes are set to contract for the first time since 2020, potentially marking the first two-year downturn this century. Indonesia faces the sharpest production cuts by volume, while Russian exporters face mounting economic pressures.
Key figure — Coal demand: near 2024 record of 8.8 billion tonnes through 2026 (IEA)
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