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Although coal demand is expected to decrease this year, it will remain largely stable until 2024, driven by continued strong demand in major Asian economies such as India and China, the International Energy Agency (IEA) said in its Coal 2019 report on Tuesday.
While coal-fired electricity generation in the United States and Europe is falling to levels unseen in decades, major Asian markets, including India and Southeast Asia, and the world’s biggest coal producer and consumer, China, will keep overall global coal demand steady over the next five years.
This year, global coal demand is set to see its largest ever decline of more than 2.5 percent, but it’s too early to say if this drop could be the beginning of a lasting trend, the Paris-based agency said.
In the U.S. and Europe, coal demand is falling dramatically, but China continues to prop up the market for coal.
In the United States, natural gas and wind will be the fastest-growing sources of electricity generation through 2020, at the expense of coal, the Energy Information Administration (EIA) said earlier this year. Electricity generation from coal is set to drop across the U.S., by 15 percent this year and by 9 percent next year.
Despite falling demand in the U.S. and Europe, coal still fuels India’s robust economic growth, while Southeast Asia—led by Indonesia and Vietnam—will see its coal demand rise by 5 percent every year until 2024, the IEA said in its report today. Chinese coal demand continues to be resilient, despite expectations of declining coal use in the residential and small industrial sectors due to China’s ongoing fight to reduce air pollution.
China’s coal demand is currently expected to plateau by 2022, after which it will decline slowly, but the next five-year government plan due out in 2020 can change those assumptions, depending on the policies, according to the IEA.
In Europe, coal use is under pressure from climate and environmental policies, while unusually low natural gas prices this year pushed a lot of coal out of competitiveness, the IEA said.
“In the United States, the shale gas boom is coal’s undoing,” the international agency said in its Coal 2019 report.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.