The Turning Tide: Global Coal Demand Set to Decline Despite Record 2023
In a significant shift, global coal demand, which reached a record high in 2023, is poised for a decline over the next two years, driven by the relentless expansion of renewable energy projects in China. The International Energy Agency's analysis suggests that this downturn is distinct from past instances, being more structural and fueled by the sustained growth of clean energy technologies.
According to Keisuke Sadamori, the Director of Energy Markets and Security at the International Energy Agency, previous dips in global coal demand were brief and linked to extraordinary events like the collapse of the Soviet Union or the Covid-19 crisis. However, the current scenario is marked by a more lasting decline.
In 2023, worldwide coal demand witnessed a 1.4 percent growth, with a noticeable divide between developing and developed nations. China and India, leading coal producers and consumers, experienced a 5 percent and 8 percent increase, respectively. In contrast, the U.S. and the EU recorded a substantial 20 percent decrease.
Analysts project a 2.3 percent global decline in coal demand by 2026, even without new policies curbing its usage. This anticipation is attributed to the recovery of hydropower in China following a drought and the integration of new wind and solar projects globally. Notably, China, currently responsible for over half of global coal demand, is expected to contribute more than half of the upcoming renewable power capacity in the next three years. Some experts even suggest that Chinese emissions might have peaked in 2023 with renewables gradually displacing coal.
Despite this optimistic outlook, the projected decrease in coal demand falls short of what is necessary to avert catastrophic warming. Sadamori emphasizes a turning point for coal is imminent, underscoring the need for intensified efforts and a faster expansion of renewables in key Asian economies to align with international climate targets.
Frequently Asked Questions (FAQ):
Q1: Why is global coal demand expected to decline in the coming years? A1: Global coal demand is projected to decline due to the sustained expansion of renewable energy projects, particularly in China, leading to a more structural shift away from coal.
Q2: Which countries experienced a growth in coal demand in 2023? A2: China and India, the world's largest producers and consumers of coal, saw a 5 percent and 8 percent increase, respectively, while the U.S. and the EU recorded a significant 20 percent decrease.
Q3: Is the anticipated drop in coal demand sufficient to address climate change concerns? A3: While there is a projected decline in coal demand, it falls short of what is needed to avoid catastrophic warming, emphasizing the urgency for accelerated renewable energy expansion.
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