Global coal consumption returns to record amid energy crisis

The International Energy Agency forecasts global coal consumption to rise by 8 billion tonnes this year, matching the annual record set in 2013.

The International Energy Agency said global coal consumption is forecast to rise by 0.7 per cent to 8 billion tonnes this year, matching the annual record in 2013.

Global coal consumption is set to surge back to a record in 2022, hitting an all-time high hit nearly a decade ago as ongoing turbulence hits markets.

The International Energy Agency said global coal consumption is forecast to rise by 0.7 per cent to 8 billion tonnes this year, matching the annual record in 2013, with demand tipped to set a new high mark in 2023 of 8.03 billion tonnes.

It marks the latest turnaround for the fossil fuel which has been increasingly out of favour from investors and financiers as developed nations’ pursue net zero emission goals.

Worldwide coal consumption rebounded by 6 per cent in 2021 as the global economy emerged from pandemic lockdowns while soaring gas prices this year have seen more countries switch to coal even as prices for high quality thermal varieties have skyrocketed.

Russia’s invasion of Ukraine has limited gas supplies to Europe and triggered a broader international energy squeeze, including in Australia, where wholesale spot prices have soared four to five times normal levels.

China and India, which together consume double the amount of coal as the rest of the world combined, are again leading the charge with coal consumption in China seen as the same levels as last year while India demand will rise 7 per cent this year, according to the IEA.

“Worldwide coal consumption rebounded by about 6 per cent in 2021 as the global economy recovered rapidly from the initial shock of the Covid pandemic. That sharp rise contributed significantly to the largest ever annual increase in global energy-related CO2 emissions in absolute terms, putting them at their highest level in history,” the IEA said.

Thermal coal exports from Australia will dip slightly due to wet weather while prices are expected to remain high into next year.

“Sanctions and bans on Russian coal following Russia’s invasion of Ukraine have disrupted markets, and issues in other major exporters have contributed to supply shortages. With other coal producers facing constraints in replacing Russian output, prices on coal futures markets indicate that tight market conditions are expected to continue well into next year and beyond,” the IEA said.

The IEA in April appointed a high powered panel tasked with managing the exit of coal from the global economy amid fears a drive to net zero emissions has been partly derailed following Russia’s invasion of Ukraine.

The group is chaired by UN Special Envoy Michael Bloomberg, a media billionaire who has pledged to close a quarter of the world’s remaining coal plants and all proposed coal plants by 2025.

While no Australian makes the panel, one of the nation’s largest coal producers in Swiss miner Glencore is represented with its chief executive Gary Nagle named as one of the members.

The Glasgow climate pact in November saw a retreat over the phase out of coal, the IEA said countries at the meeting agreed to accelerate efforts to phase down unabated coal power.

A report to be prepared by the group will balance the need to deliver on Glasgow climate change goals while balancing an emerging global energy crisis.

Originally published as Global coal consumption returns to record amid energy crisis