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IEA Says Coal Demand Will Keep Growing Through 2019

IEA Says Coal Demand Will Keep Growing Through 2019

The global demand for coal will continue to increase during the next five years, although more slowly than in the recent past due to China’s expected efforts to reduce its coal consumption by diversifying its energy sources, according to a new report by the International Energy Agency (IEA).

“We have heard many pledges and policies aimed at mitigating climate change, but over the next five years they will mostly fail to arrest the growth in coal demand,” IEA Executive Director Maria van der Hoeven said in releasing the agency’s Medium-Term Coal Market Report on Dec. 15.

The report said that by the end of 2019, worldwide coal use will grow by 2.1 percent each year to 6.5 billion metric tons of coal equivalent, lower than the 2.3 percent growth forecast in 2013 for the five-year period ending in December 2018.

Related: Germany Considers Coal Phase Out

And although demand for coal will be lessening, the report said, its growth in 2013 was greater than for oil and natural gas, maintaining its status as the second largest source of energy behind oil.

The Paris-based IEA said the greatest demand through 2019 will come from China and India, canceling out reductions in coal use in the United States and Europe, which have moved to limit greenhouse gas emissions and shut many coal-fired power plants.

As a result, it said, India probably will become the world’s second-largest consumer of coal by 2019, surpassing the United States. During the period, India’s use of coal will rise by 4.8 percent a year to 1 billion metric tons, while coal consumption in China will rise by 2.6 percent to 4.6 billion metric tons by the end of 2019.

China -- the world’s largest coal user, producer and importer -- has embarked on a campaign to diversify its energy supply and reduce its energy intensity, “and the resulting increase in gas, nuclear and renewables will be staggering,” the IEA report said. Nevertheless, coal consumption in China will not peak before the end of 2019.

Related: Utilities Facing Coal Shortages Due To Rail Congestion

In many other countries, however, demand for coal appears to be declining more significantly, particularly member nations of the Organization for Economic Cooperation and Development (OECD), which includes North America, Europe, and Western-leaning countries in the Pacific rim and in the Near East.

Overall, OECD demand for coal should decline by 0.6 percent per year to 1.4 billion metric tons of coal equivalent by the end of 2019, the IEA report said. Economic growth in Japan, Korea and Turkey during the period will lead to higher coal consumption in these countries, but it won’t be enough to cancel out the declines in Europe and the United States, the report said.

In fact, demand in the United States likely will drop by 1.7 percent each year down to 561 million metric tons of coal equivalent, it reported.

By Andy Tully of Oilprice.com

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