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Global demand for coal will remain stable over the next five years despite a lot of talk about the effects of this dirtiest of all fossil fuels on climate change. The International Energy Agency said this year will likely mark an annual increase in coal demand but the silver lining is that demand will probably stabilize over the next five years.
In a further silver lining, however thin, the IEA said the share of coal in the global energy mix will decline slightly over the five years to 2023, from 27 percent last year to 25 percent in 2023.
Asia, unsurprisingly, will drive this stable demand for coal, the IEA has forecast. It is still more affordable and widely available to be shunned completely by the powerhouses of the continent.
India’s hunger for coal will grow the most, at a rate of 3.9 percent annually over the five-year period, but even it will slow down as alternatives become more affordable. Besides India, Malaysia, Pakistan, Vietnam, and the Philippines will also increase their intake of coal over the next five years.
China, on the other hand, will reduce its coal intake by an estimated 3 percent annually between 2018 and 2023, according to the International Energy Agency.
“Coal in China accounts for 14% of global primary energy, the largest around in the world. Developments in the Chinese coal sector have the potential to affect coal, gas and electricity prices across the world, for instance through inter-fuel substitution or regional arbitrage. This puts China’s coal sector at the centre of the global energy stage. While China accounts for nearly half of the world’s coal consumption, its clean-air measures are set to constrain Chinese coal demand going forward,” the IEA said.
The agency, however, acknowledged that in spite of government efforts around the world to reduce the share of coal in the energy mix, the fossil fuel is proving quite resilient to political agendas aimed at tackling climate change more aggressively, simply because of its affordability and availability.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.