Global coal demand rose by 0.3% in 2025 to 8.84 billion tonnes (Bt), narrowly surpassing the previous year’s record high. That modest increase suggested that coal demand had entered a period of broad stability after the rapid growth earlier in the decade.

This global picture, however, masked diverging regional trends. Coal demand in China was unchanged at 4 956 million tonnes (Mt), while India’s fell by 1% to 1 299 Mt. And yet for the first time in 50 years, both countries generated less electricity from coal than the year before. China’s coal-fired power generation declined in the first half of 2025, despite strong electricity demand, as the rapid uptake of renewable electricity more than met additional demand. Industrial coal use also weakened – with the exception of the coal-to-chemicals sector. China nevertheless remains the dominant force in global coal markets, accounting for more than 56% of consumption. Its power sector alone consumes about one-third of the world’s coal, meaning that small changes in Chinese electricity demand, renewables output (including hydropower) or coal-plant utilisation can have a significant impact on global coal demand.

In India, an early, strong and prolonged monsoon lifted hydropower output while reducing electricity demand for cooling and agriculture and others. Coal-fired generation and power-sector coal demand declined as a result, although industrial coal use continued to grow.

By contrast, coal demand in the United States rose by more than 9.5% to 410 Mt. Strong electricity demand, higher natural gas prices and support from the current Administration boosted coal-fired generation, which accounts for 93% of US coal demand. In the European Union, weak wind and hydropower output in the early part of 2025 temporarily increased power-sector coal use in the first quarter. But the longer-term trend continued: coal consumption fell by 6%, with decreases in both electricity generation and industry. Mature Asian economies such as Japan, Korea and Chinese Taipei also saw coal demand decline, reflecting the shift towards lower-carbon power systems and declining industrial use.

Coal-fired power generation remained the main driver of global coal demand in 2025, accounting for 5 954 Mt. Metallurgical coal demand was broadly unchanged from 2024 at 1 174 Mt, despite a decline in steel production.

Global coal demand is set to increase by 1.2% in 2026 to reach 8.94 Bt, reversing previous forecasts of a decline. The change mainly reflects the crisis in the Middle East and an unusually strong El Niño weather pattern. Although shipping disruptions in the Strait of Hormuz do not directly affect coal markets, tighter natural gas supply has pushed up prices, prompting some electricity systems to switch from gas to coal. This trend has also been supported by temporary measures allowing greater use of coal-fired generation in some countries. Higher cooling demand and lower hydropower output linked to El Niño have also added to coal use.

China’s coal demand is expected to increase by 1% in 2026 to 5 Bt, following the upward revision of earlier forecasts. Coal-fired generation continues to be shaped by growth in electricity demand, hydropower availability and the rapid expansion of solar and wind capacity. Strong electricity demand, weak wind generation and higher liquefied natural gas (LNG) prices have all supported coal use in the power sector. Meanwhile, a spike in oil prices has boosted coal-to-chemicals production, though the effect has been limited because many plants were already operating at high load factors. Steel and cement production, which peaked in 2020, are expected to continue declining in 2026.

Coal demand in India is expected to return to its historical growth trend in 2026, following last year’s temporary decline. Rising electricity demand will continue to support coal use in the power sector, despite the rapid expansion of renewable capacity. El Niño conditions can increase cooling needs while reducing hydropower availability, providing a further boost to coal consumption. Industrial demand also remains strong, underpinned by growth in pig iron, direct reduction of iron (DRI) and cement production, the three largest coal-consuming sectors. Overall, India’s coal demand is expected to increase by 4.2% to reach 1 353 Mt in 2026.

Coal demand in Japan is expected to decline slightly, by 1% in 2026 to 161 Mt, as weaker industrial consumption is partially offset by modest growth in power generation. Although nuclear and renewable generation are expected to increase, driven by solar photovoltaic (PV) expansion, higher natural gas prices linked to the Middle East crisis have supported coal-fired generation beyond what would otherwise have been expected. A government decision to remove restrictions on coal-fired power plants eligible for capacity payments will provide further support to coal generation.

In Korea, coal demand is now expected to rise by 6% to 119 Mt, reversing previous expectations of a decline. Low nuclear availability and higher natural gas prices have boosted coal-fired generation, which jumped 30% year-on-year in the first quarter of 2026. However, the restart of nuclear reactors later in the year could slow this trend by reducing reliance on coal-fired power generation.

In Chinese Taipei, coal demand remains constrained by gas-fired generation and the transition towards low-carbon energy. However, the end of nuclear power generation has heightened concerns over energy security.

Among members of the Association of Southeast Asian Nations (ASEAN), growth in coal demand is set to continue in 2026, reaching around 574 Mt. This will be driven mainly by the power sector, particularly in Indonesia and Viet Nam. In Indonesia, the region’s largest coal consumer, coal remains the backbone of the electricity system, especially for captive power plants serving energy-intensive industries including nickel, cement and, increasingly, aluminium production. In Viet Nam, coal-fired generation remains a major source of electricity supply, with demand supported by heatwaves and the need to replenish coal stocks. El Niño conditions could provide further support for coal use by increasing cooling demand and reducing hydropower output. Elsewhere in Southeast Asia, including the Philippines and Malaysia, coal demand is expected to remain broadly stable, as existing coal-fired plants are already operating at high load factors.

Coal demand in the United States is expected to decline by 7% in 2026, reversing the temporary increase in 2025. Even so, demand will remain above its 2024 level. Policy support from the current Administration – including emergency orders and the postponement of plant retirements – has slowed the pace of decline. At the same time, concerns about system reliability and rising electricity demand – including from data centres – have helped keep coal-fired plants in operation. That said, coal-fired generation remains under pressure from cheap natural gas and the expansion of renewable capacity, and coal’s share of electricity generation is expected to shrink further in 2026.

In the European Union, coal demand is set to continue its structural decline, although the fall is now expected to be less pronounced than previously anticipated. Total annual coal demand is now expected to reach 276 Mt in 2026. Higher gas prices have reduced the expected decline in countries, such as Germany and Poland, where gas generation and spare coal capacity remains available. Weather-related events, such as cold spells, could also temporarily increase coal use. Nevertheless, the combination of expanding of renewable capacity, growing nuclear availability in some markets, policies to phase out coal and weakening industrial demand are expected to reduce coal consumption over the longer term.

Global demand for coking coal is expected to remain broadly stable in 2026, as contrasting regional trends offset one another. India will remain the primary source of growth in metallurgical coal demand, driven by rising pig iron production to meet stronger steel demand. Most of this additional steel output is expected to come from the blast furnace-basic oxygen furnace (BF-BOF) production route, which relies on coking coal. In China, demand for metallurgical coal is expected to decline very slightly (less than 1%) in 2026, despite continued weakness in the steel sector. Coke production increased in the first half of 2026, helping to support demand. Across developed economies, coking coal demand is expected to decline in 2026, with only a few exceptions, including Germany.

Despite differing regional and sectoral trends, global coal demand is expected to edge higher in 2026. Strong growth in India and Southeast Asia, together with upward revisions to demand forecasts in China, Europe, Japan and Korea, more than offsets the anticipated declines in other advanced economies. The upward revisions largely reflect mostly higher natural gas prices, but also policy measures and El Niño‑related weather conditions.

If Middle East tensions ease, global coal demand is expected to fall by 0.4% in 2027, to 8.91 Bt, which is still above 2025 levels. Some of the factors that supported increased coal use in 2026 are projected to fade: the natural gas price premium that encouraged gas-to-coal switching in several power markets should narrow, for example, while expanding renewable generation and cheaper LNG will put renewed pressure on coal-fired power. As a result, coal-fired generation is expected to decline, and growth in some sectors – particularly coal‑to-chemicals production in China – will not be enough to offset the fall.

China remains the dominant driver of global coal demand – and this is unlikely to change for some time. The country’s power sector will continue to determine the trajectory of coal demand, with consumption shaped by factors that include electricity demand growth, hydropower availability and renewable generation. Following stronger-than-expected coal-fired generation in 2026, coal use in the power sector is expected to decline slightly in 2027 as renewable output expands and grid integration improves while electricity demand continues to grow. Coal‑to‑chemicals production will continue its expansion, supported by efforts to reduce oil dependence and strengthen energy security. Industrial coal use is likely to decline, albeit slowly, given the challenges of replacing coal in heavy industry and in applications such as silicon or ferroalloys production. Overall, we expect China’s coal demand to edge down only marginally, remaining close to 5 Bt.

India is expected to remain a major source of coal demand growth in 2027, as rising electricity demand and industrial activity continue to support consumption. Coal use in the ASEAN region could also increase further, driven by rising electricity demand in countries such as Indonesia, Viet Nam and the Philippines – though demand will remain sensitive to weather conditions affecting hydro output, particularly in Viet Nam and, to a lesser extent, LNG prices. Mature Asian economies such as Japan and Korea, by contrast, are expected to continue reducing coal use as nuclear generation and renewables weigh on coal-fired power, once gas prices lose their current premium.

In other advanced economies, coal demand is expected to extend its structural decline. In the European Union, expanding renewables generation, coal phase-outs and the fading of temporary natural gas-price support should continue to reduce coal use. In the United States, policy measures and delayed plant retirements may keep higher-than-planned coal capacity available, but coal-fired generation is likely to remain under pressure from renewables and gas. Overall, the balance of risks points to a slight decline in global demand in 2027 – though weather, fuel prices and energy security concerns remain key sources of uncertainty, particularly given the fragile geopolitical context and the tangled links between major energy fuel and sources.