Coal: A Global Outlook

Coal demand for power generation sets new records with 8 billion tones in global consumption

The international coal market saw unprecedented growth in 2022. Coal demand for power generation set new records with 8 billion tones in global consumption. Coal prices rose to unprecedented levels in March and then again in June, pushed higher by the strains caused by the global energy crisis, especially the spikes in natural gas prices, as well as adverse weather conditions in Australia, a key international supplier. Europe, which has been heavily impacted by Russia’s sharp reductions of natural gas flows, is on course to increase its coal consumption for the second year in a row. The Ukrainian-Russian conflict continues to wreak havoc to European and global energy supplies.

The world’s three largest coal producers – China, India and Indonesia – will all hit production records in 2022 and continue that trajectory into the foreseeable future. The demand for coal is especially strong among emerging and developing economies, especially in Asia where they are set to increase coal use to help power their economic growth, even as they add more renewables. Developments in China, the world’s largest coal consumer, will have the biggest impact on global coal demand in the coming years, but India will also be significant.

These trends prove wrong the many commentators and skeptics who believed that coal will not recover from its 2013 highs. Not only has coal growth broken past records, but it will continue to be one of the major power generation commodities for many countries in the wake of the energy crunch experienced by Europe.

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