‘No immediate decline in sight’ for global coal-fired power demand, says IEA

There is “no immediate decline in sight” for coal-fired power demand, concludes a new report from the International Energy Agency (IEA).

The IEA’s Coal 2020 report finds that the Covid-19 pandemic has prompted coal use to decline to an extent not seen since the Second World War.

However, the report forecasts that global coal demand will begin to rise again in 2021 as the world emerges from the pandemic.

“We expect some recovery in 2021 – about a 2.6 per cent increase when compared with this year,” Carlos Fernández Alvarez, senior energy analyst at the IEA, told The Independent. “So we will still be at lower consumption levels than 2019 in 2021.”

Coal is the most polluting of the fossil fuels and its use for power generation alone currently accounts for about 30 per cent of global CO2 emissions.

Over the next five years, global coal-fired power demand is expected to reach a plateau, according to the findings.

This is because steep declines in coal demand in the US and Europe are expected to be matched by increases in demand in China, India and emerging southeast Asia economies, Keisuke Sadamori, the IEA’s director of energy markets and security, told The Independent.

Declines in coal demand in Europe are linked to government policies to tackle the climate crisis, including the rising price of carbon under the EU’s Emissions Trading Scheme (ETS), he said. Meanwhile, demand decline in the US is linked to coal being outcompeted by natural gas.

Though several of Asia’s largest economies have also recently made tougher pledges to tackle the climate crisis, growth in coal demand is still expected over the next five years, Mr Sadamori added.

“We are seeing that several coal power projects are either cancelled or suspended in the Asian economies,” he said.

“Having said that, we are still seeing China building new coal fired plants. That is still continuing, even if on a smaller scale than previously thought. And we also expect that India will continue to gradually increase its coal demand.”

China is the world’s top emitter of greenhouse gas emissions and also its biggest producer and consumer of coal.

At a global climate action summit held last weekend, the leader of Pakistan stood out by pledging that the country would not build any new coal-fired power plants.

The move was “likely to be significant in the long run”, said Mr Fernández Alvarez, but not enough to impact coal demand over in the next five years.

For global coal demand to start to decline within the next five years, tougher policies would need to be introduced by countries in Asia, Mr Sadamori said.

A decline in coal demand would be needed to see the world on track to limit global warming to well below 2C above pre-industrial levels, the goal of the Paris Agreement, he added.