Global coal consumption is expected to peak by 2030 and then gradually decline, the International Energy Agency (IEA) said in its World Energy Outlook 2025. The shift is driven primarily by the rapid growth of alternative energy sources, which continue to reduce coal's share in the power sector.

The IEA's projections indicate that in all scenarios modeled, global coal demand will reach its peak around 2030 and start to fall steadily thereafter. By 2035, global coal consumption could decline by 8-20% from the 2024 level of 6.09 billion tonnes of coal equivalent (Btce), with the majority of the reduction occurring in the power sector.

Despite global electricity use potentially increasing by 40% between 2024 and 2035, due to rising demand for cooling, AI data centers, and electric vehicles, renewable energy sources are expected to account for over 85% of that growth. This trend is supported by an average annual addition of more than 600 GW of renewable capacity in emerging and developing economies.

Additionally, renewed interest in nuclear energy, combined with more affordable natural gas prices from improved supply conditions, is expected to further reduce coal use in the power sector.

China, the world's largest coal consumer, will remain a key player in the global renewable energy market. The IEA forecasts that China will account for 45-60% of global renewable energy deployment over the next decade, maintaining its position as the world's largest manufacturer of renewable technologies.

As the demand for coal in power generation weakens, the IEA predicts that major thermal coal-producing countries, those that primarily supply coal for electricity generation, will see sharp declines in output over the next decade. Global thermal coal production could fall by 10-25% from 2024 to 2035, with the upper end of the decline representing a reduction of nearly 1.2 Btce.

However, coal demand in industrial sectors, particularly for coking coal used in iron and steelmaking, is expected to remain strong. If current policies persist, industrial coal demand could rise by around 30 Mtce from 2024 to 2035. The steel sector currently accounts for approximately one-third of global coal consumption.

Developing economies in Asia, particularly India and Indonesia, are expected to drive much of the growth in coking coal demand, with projections showing increases of 60% and 45%, respectively, between 2024 and 2035.

In contrast, China's coking coal consumption is expected to decline by around 16% by 2035, a reduction of about 150 Mtce from 2024 levels. This drop is attributed to China's shift from energy-intensive industries like cement and steel to more electricity-intensive sectors such as clean technology manufacturing.

With domestic demand for coking coal weakening, China's output is also projected to fall by approximately 20% or 100 Mtce by 2035. Overall, the IEA anticipates that by 2035, China's total coal output could decline by 10-25% from the 3.35 Btce recorded in 2024, depending on the country's policy decisions.