Key factors such as weather, fuel prices and policy decisions all shaped global coal consumption in 2025, driving changes in demand that often ran counter to recent country or regional trends.

In India – one of the traditional engines of coal demand growth – an early and strong monsoon season depressed electricity demand and boosted hydropower output. As a result, the country’s annual coal power generation is set to decline year-on-year for only the third time in the past five decades. In the United States, where coal demand has decreased by an average of 6% annually over the past 15 years, consumption is poised to increase by 8% in 2025 amid a combination of higher natural gas prices and a slowdown in the retirement of coal plants due to policy support led by the federal government. In the European Union (EU), lower hydropower and wind output pushed up coal power generation in the first half of the year. As a result, EU coal demand is set to decrease by only around 2% in 2025 – a much smaller decline than the double-digit drops in 2023 and 2024.

In China1, which consumes more coal than the rest of the world combined, demand is on course to mirror its 2024 level, as expected. In turn, global coal demand in 2025 is set to be very close to our forecast published in the previous edition of this report a year ago, rising by 0.5% to 8.85 billion tonnes, a record high.

Global coal demand is expected to effectively plateau over the coming years, showing a very gradual decline through to 2030 in our latest forecast. By that year, consumption is forecast to ease by 3% compared with 2025, taking it below its 2023 level. Global power generation from coal is forecast to sink below its 2021 level by the end of this decade.

Strong growth in global electricity demand could support coal consumption in the years ahead. But competition with other power sources is also set to intensify, with renewable capacity surging, nuclear expanding steadily, and a wave of liquefied natural gas (LNG) arriving on the market.

Since coal substitution in industry is slow, coal use by the sector is forecast to decline by less than 1% per year through the end of the decade. However, this slight drop is expected be offset by an increase in coal gasification plants, mainly in China.

The most substantial growth in coal consumption between now and 2030 is expected to take place in India, where demand is forecast to rise by 3% per year on average, leading to a cumulative increase of over 200 million tonnes (Mt). Meanwhile, the fastest growth is expected to happen in Southeast Asia, where coal demand is forecast to grow by more than 4% per year to 2030.

Against a complex energy backdrop, our forecast for the next five years is subject to some significant uncertainties that could impact it materially. For example, in the event of stronger-than-expected uptake of coal gasification, notably in China – or if the integration of new renewable capacity into power systems proceeds more slowly than anticipated – global coal demand could exceed our forecast. At the same time, if the competition from other energy sources is stronger than anticipated, this could push overall coal consumption lower than our forecast.

China consumes 30% more coal than the rest of the world put together. It also produces more coal than all other countries combined, and it is the world’s largest importer. This dominance by a single country makes global coal markets very dependent on developments in China, notably those related to economic growth, government policies, energy markets, weather conditions and dynamics in the Chinese domestic coal sector.

While our forecast sees coal demand in China decreasing somewhat over the next five years, the decline is slow (by less than 1% annually on average) – and higher electricity demand growth, lower renewable energy dispatch or an acceleration in coal gasification projects could turn the slight drop into a small increase. The Chinese government has emphasised its ambition of reaching peak coal consumption before 2030.

A notable development in coal markets is the emergence of strong policy support for coal in the United States, which helped lift coal demand there in 2025. Several measures have been adopted to support both the supply and the demand side. These include environmental exemptions allowing some coal plants to continue operating, a reduction of the royalty rate for coal mining on federal lands and support for retrofitting coal plants.

In our forecast, US coal demand declines by 6% per year on average through 2030, based on ongoing growth in renewable generation capacity and the continuation of coal plant retirements, albeit at a slower pace than previously expected. However, the rate of decline in US coal use could be slower if electricity demand is higher than expected or if coal plant retirements stall. Natural gas prices will also play a role in coal demand trends in the United States.

Global coal production is forecast to remain at similar level in 2025 to the all-time high it reached in 2024. In the first half of 2025, China’s coal output grew 6% compared with the same period in 2024, but abundant stocks, low prices and safety campaigns have led to declines since July. For the whole year, we expect Chinese coal production to rise by 1%.

In India, amid weak demand and challenging working conditions due to heavy rains, the growth in coal production seen in recent years came to a halt in 2025. Meanwhile, in Indonesia, coal production is expected to decline in 2025 for the first time since the onset of the Covid-19 pandemic due to shrinking international coal trade. In the United States, coal production is set to increase, spurred by domestic demand and policy support.

Looking ahead, given healthy coal stocks in most regions and sluggish global demand, we forecast that global coal production will decline slightly through 2030. Among major producers, India is forecast to have the highest output growth, based on strong domestic demand and favourable government policies. The biggest uncertainty is in China, where even small policy changes or demand fluctuations can affect coal output sufficiently to have an impact on international markets.

Global imports of coal reached an all-time high in 2024, even as major importers such as Japan, Korea, Chinese Taipei and EU countries continued to reduce the volumes they brought in. Declines in those markets were more than offset by robust growth in China and, to a lesser extent, India, alongside smaller increases in countries such as Viet Nam and the Philippines. However, China and India’s
coal imports declined in 2025 amid sluggish demand, sufficient domestic production and abundant stocks. As a result, global imports are on course to fall by around 5% in 2025.

Coal imports are expected to see a sharp decline globally over the forecast period. In advanced economies, they are set to keep shrinking through 2030. Meanwhile, India faces a mixed outlook, with a strong push for domestic production tempered by the need for imports due to coal quality issues.

China will ultimately shape the global trends. As it stands today, Chinese imports are forecast to decline by around 2.5% per year on average through 2030. However, the decrease will be concentrated in thermal coal. India, which has plans to expand steel production and limited domestic supply of metallurgical coal, is expected to boost metallurgical coal imports, offsetting the declines elsewhere.

The decline in Chinese imports in 2025 led to the first drop in the global coal trade since 2020. Indonesia, the largest exporter and supplier to China, saw the biggest decrease, reducing exports by almost 50 Mt. In percentage terms, however, Colombia led the fall, with exports dropping by around 20% in 2025. The United States also saw exports decline slightly. In Russia, exports are expected to remain at a similar level to 2024.

Looking ahead, as coal imports shrink and prices are pressured by cheaper and more abundant LNG supplies, the competition among exporters will intensify. The declines in import demand from Japan, Korea and Chinese Taipei could hurt Australia’s thermal coal exports, whereas Indonesia’s coal sector is set to remain tied to demand trends in China. Metallurgical coal exporters, led by Australia, appear to have the stronger prospects due to the relatively robust demand outlook in India.

After soaring to a record high during the recent energy crisis linked to Russia’s invasion of Ukraine in 2022, thermal coal prices have pulled back over the past two years. In 2025, they were around 10% lower in Europe and around 20% lower in Asia compared with 2024, though there were notable differences geographically over the course of the year.

In China, prices declined in the first half of 2025 but then started increasing once production shrank and demand rose. Meanwhile, in Europe, there was a small price spike in the first half of the year as demand increased amid lower hydropower and wind output. Prices in Australia, which are sensitive to Japanese and Korean demand, fell below European levels in April, then rose again through August. Overall, thermal coal prices are getting closer to supply costs, with profits shrinking accordingly.

Large profits generated in the 2021-2023 period gave rise to an active phase of mergers and acquisitions in the international coal sector. Miners doubling down on coal had sufficient cash to purchase attractive assets, which allowed companies wishing to diversify away from coal to sell at reasonable prices. In the current lower price environment, coal mining companies are not as profitable as they were. As a result, mergers and acquisitions activity has almost ground to a halt since 2024, with very few new deals announced.