In 20241, global coal demand increased by 1.5% compared with 2023, reaching a new all-time high of 8.79 Bt. This represents a continuation of the upward trend in coal consumption, albeit at a slower pace than growth rates of 4.4% in 2022 and 2.3% in 2023.

The increase in 2024 was primarily driven by emerging economies in Asia, particularly China and India. China recorded the largest absolute growth, with demand rising by 82 Mt (1.7%) while India’s consumption increased by 45 Mt (4%). Additional growth was observed in Indonesia and Viet Nam. In contrast, coal demand declined significantly in advanced economies, notably in the European Union (down 40 Mt, or 11%) and the United States (down 14 Mt, or 4%), largely due to reduced coal-fired power generation.

Asia-Pacific’s share of global coal consumption continued to grow, with China, India, and the Association of Southeast Asian Nations (ASEAN) countries estimated to have accounted for approximately 77% of total demand in 2024, more than double their share at the start of this century. This shift highlights the region’s increasing influence on global coal market dynamics.

Coal-fired power generation, the main driver of global coal demand, also reached a record high in 2024, estimated at 10 766 TWh. In contrast, metallurgical coal consumption, primarily used in iron and steel production, remained relatively stable, with a slight decline estimated for the year.

China remains the dominant player in global coal markets, consuming roughly 30% more coal than the rest of the world combined. Its power sector alone accounts for one-third of global coal consumption, underscoring China’s central role in shaping the trajectory of global coal demand.

In the first half of 2025, we estimate that global coal demand saw a slight decline of less than 1%, driven by diverging regional trends. With a modest rebound anticipated in the second half of the year, we project a 0.2% increase for the full year, effectively keeping demand broadly steady compared to the previous year.

In China, coal-fired power generation fell by around 3% through June 2025, driven by subdued electricity demand and a significant increase in output from renewable sources. Industrial coal use also declined due to weak manufacturing activity, except for the chemical sector, which remained relatively resilient. For the second half of the year, we expect a modest recovery, and therefore anticipate overall coal demand in China to fall by 0.5% in 2025.

Similarly, India experienced a 2.1% year-on-year drop in coal demand for power generation in the first half of the year. This was primarily due to an early onset of the monsoon season and a high baseline of consumption in 2024, which was marked by an intense heatwave. On the other hand, the Indian steel sector showed signs of strength, as overall industrial coal demand was estimated to have risen by 6% in the first six months of the year. Total annual demand is projected to increase to 1 314 Mt, up 1.3%, due to an expected rebound in coal-fired power generation in the second half of the year.

Japan is anticipated to experience a moderate decline in coal demand. Economic uncertainties are weighing on both power generation and steel production, leading to a projected total coal demand of 153 Mt in 2025. In Korea, coal consumption recorded a significant year-on-year decline of 17% during the first half of the year. This downward trend is expected to soften, with total coal demand forecast to reach 103 Mt in 2025. In Chinese Taipei, the ongoing nuclear phase-out has not resulted in increased reliance on coal. Instead, gas-fired power generation has effectively filled the gap. As a result, coal demand from the power sector is projected to decline by 8% year-on-year, reaching 43 Mt in 2025. Non-power sector demand is also expected to fall by 1.8%, bringing total coal demand to 53 Mt.

In Indonesia, coal demand is set to expand by 7% to 268 Mt this year. The growth is mainly driven by the power sector, although we also expect growth in the demand for coking coal and thermal non-power uses such as the smelting industry.

Coal demand rose in the first half of the year in the United States and European Union, reversing the declining trend seen in recent years. US coal demand rose an estimated 12% in the first half of the year, with full-year demand expected to climb by 7% to 400 Mt. Strong electricity demand growth and higher natural gas prices are the main reasons for this trend. In the European Union, in the first quarter of 2025, we estimate coal demand growth of around 5%. With industrial consumption in decline, the main driver was the electricity sector, with low hydro and wind power output pushing up coal use in a context of rising electricity demand. In Germany, the largest coal consumer in the European Union, we estimate that coal power generation increased by 11% in the first half of 2025. However, these developments are not expected to alter the underlying structural decline in coal use in the region, and as a result, we expect a decline of around 1.6% in 2025, which is a significant slowdown compared with the drops of almost 11% in 2024 and almost 25% in 2023.

A significant event in the EU electricity sector was the blackout that occurred in the Iberian Peninsula on 28 April 2025. However, this event has not impacted our coal forecast due to the limited coal capacity in the region.

Global metallurgical coal demand is expected to decline by 1.6% in 2025, due to ongoing economic uncertainty and slower GDP growth forecasts. Alongside the iron and steel industry, the key drivers of metallurgical coal demand are infrastructure and construction, so demand for metallurgical coal reflects broader economic trends.

Despite the regional and sectoral variations, the full-year forecast for global coal demand in 2025 remains broadly unchanged from what was published in Coal 2024 in December 2024. Lower-than-expected consumption in China and India is offset by stronger-than-anticipated demand in other regions, resulting in a flat projection overall for 2025.

For 2026, global coal demand is expected to decline only slightly, broadly remaining on a plateau at around 8.78 Bt. China remains the biggest force shaping global coal demand. The country’s electricity sector is the primary factor driving coal use, influenced by rising electricity needs and the pace of renewable energy deployment. China’s coal power generation is forecast recover slightly in 2026 after a decline in 2025. Growth in the coal conversion sector is expected to continue in 2026, while coal use in cement and steel is set to fall. Overall, an expected 0.9% increase in 2026 could push China’s total coal demand close to 5 Bt.

India is once again expected to record the second-largest increase in coal consumption. Rising electricity demand will be partially met by coal, pushing the country’s coal consumption up by 2.5% to 1.35 Bt.

Similarly, coal consumption in the ASEAN region is expected to increase by 5% in 2026, reaching 547 Mt. This growth is primarily driven by rising demand in key countries such as Indonesia and Viet Nam. In Indonesia, coal demand is projected to rise by 16 Mt, supported by higher power generation needs and continued expansion of the smelting industry. In Viet Nam, demand is expected to increase by 5 Mt, largely due to additional coal-fired power generation. In contrast, the mature economies in Asia, Japan and Korea are expected to reduce coal demand by 8% and 4% respectively.

Asia’s share of global coal use will continue to rise as the biggest decline is likely to happen in the European Union, for which we anticipate a sharp reduction of 61 Mt. The reason for this expected slump is the combination of increased power generation by renewable sources and the continuation of coal phase outs.

Recent developments in the United States have influenced the coal demand outlook. The new United States administration has signalled support for the coal industry, while rising electricity demand and elevated natural gas prices have contributed to increased coal-fired power generation. On 8 April, the President of the United States issued the Executive Order to Reinvigorate America’s Beautiful Clean Coal Industry, which contains measures to support the United States coal sector. For example, some coal plants have received temporary waivers from environmental regulations, enabling higher coal use than previously expected. The full impact of other measures will depend on implementation, but as a result, the 2026 coal demand forecast for the United States has been revised slightly upward, softening the previously projected decline.