Global appetite for coal is waning as alternative energy sources continue to chip away at its dominance, according to the International Energy Agency (IEA).
The latest medium-term coal forecast from the IEA revealed that growth in global coal demand is expected to stall over the next five years.
It reported that the share of coal in the power generation mix will drop to 36 per cent by 2021, down from 41 per cent in 2014
The fall will be driven by lower demand from China and the United States, along with renewable energy growth and a strong focus on energy efficiency.
However, the IEA added that the world is still highly dependent on coal – a sign of coal’s paradoxical position. While coal demand dropped in 2015 for the first time this century, the IEA forecasts that demand will not reach 2014 levels again until 2021.
This path depends greatly on China, which accounts for 50 per cent of global coal demand, contributes almost half of coal production, and influences coal prices more than any other country.
According to the IEA, coal remains the world’s number one fuel for generating electricity, producing steel and making cement because it is relatively affordable and widely available.
Coal provides almost 30 per cent of the world’s primary energy, which has been forecast to decline to 27 per cent by 2021. However, coal is also responsible for 45 per cent of all energy-related carbon emissions and contributes to other types of pollution.
“Because of the implications for air quality and carbon emissions, coal has come under fire in recent years, but it is too early to say that this is the end for coal,” IEA energy market director Keisuke Sadamori said.
“Coal demand is moving to Asia, where emerging economies with growing populations are seeking affordable and secure energy sources to power their economies. This is the contradiction of coal — while it can provide essential new power generation, it can also lock-in large amounts of carbon emissions for decades to come.”