Global coal demand is forecast to edge down through the end of this decade as competition intensifies with other power sources - including renewables, natural gas and nuclear - according to the 2025 edition of the IEA's annual market report.
Coal 2025, out today, explores current market dynamics and provides forecasts through 2030 for demand, supply and trade at the global and regional level. It also examines key trends in investment, costs and pricing.
The report finds that global coal demand is on course to rise by 0.5% in 2025, reaching a record 8.85 billion tonnes. In several major markets, consumption patterns diverged from their recent trends. In India, an early and intense monsoon season resulted in a decline in annual coal use for only the third time in five decades. In the United States, higher natural gas prices and policy measures that slowed coal plant retirements lifted coal consumption, which had been on a downward trajectory for the previous 15 years. After two years of double-digit declines, coal demand in the European Union shrank only modestly. At the same time, in China, coal use remained broadly unchanged from its 2024 level.
By 2030, however, global coal demand is expected to have ticked lower, returning to the same level as in 2023. This is largely driven by shifts in the power sector, which accounts for two-thirds of total coal consumption today. With renewable capacity surging, nuclear expanding steadily, and a huge wave of liquefied natural gas coming to market, coal-fired power generation is forecast to decline from 2026 onward. Coal demand from industry is expected to remain more resilient.
In China, which currently accounts for more than half of global coal use, demand is expected to fall slightly by the end of the decade. The country continues to deploy renewable energy capacity at a rapid pace, with the government looking to reach a peak in domestic coal consumption by 2030.
"Despite uncharacteristic trends in several key coal markets in 2025, our forecast for the coming years has not changed substantially from a year ago: we expect global coal demand to plateau before edging down by 2030," said IEA Director of Energy Markets and Security Keisuke Sadamori. "That said, there are many uncertainties affecting the outlook for coal, most notably in China, where developments - from economic growth and policy choices to energy market dynamics and weather - will continue to have an outsize influence on the global picture. More broadly, trends in electricity demand growth and the integration of renewables worldwide could impact coal's trajectory."
The largest absolute increase in coal consumption to 2030 is expected to take place in India, where demand is set to rise by 3% per year on average, leading to an overall increase of over 200 million tonnes. Meanwhile, the fastest growth is forecast to happen in Southeast Asia, where demand is set to increase by over 4% per year to 2030.
Should China see faster-than-expected growth in electricity consumption, slower integration of renewables, or strong investment in coal gasification, it could push global coal demand above the forecasts, according to the report. Major uncertainties also persist globally over the pace of electricity demand growth in both advanced and developing economies, policy approaches, and the pace of coal substitution in certain sectors and regions.
In recent years, China's appetite for coal has bolstered global trade, easing the impact of declining imports from the European Union, Japan, Korea and others. However, China reduced imports in 2025 due to oversupply and sluggish demand, a trend that is expected to continue to 2030. This is set to lead to a reduction in coal trade worldwide. According to the report, metallurgical coal appears to have stronger prospects due to India's reliance on imports to support its growing steel industry.
Overall, amid a tepid outlook for demand, abundant stocks and lower prices, which are squeezing profit margins, the report sees coal output declining in most major producer countries through 2030. This includes China, as domestic demand decreases, and Indonesia, which is set to be affected by weaker trade. India appears likely to be an exception, with coal production rising as the government seeks to reduce the country's dependence on imports.
