US coal production is expected to decline in 2026 and 2027 as natural gas prices normalize and coal's share in the power mix shrinks, the US Energy Information Administration (EIA) said in its latest Short-Term Energy Outlook released October 6.

Coal output in 2026 is forecast at 521.4 million short tons (473 million tonnes), up nearly 1% from the previous month's estimate but down 1.32% from a year earlier, the EIA said.

For 2027, total US coal production is projected at 513.9 million short tons, up 3.46% from the prior month's forecast but down 1.44% year on year.

The brief rebound in coal production and consumption in 2025 was largely driven by extreme weather events such as Winter Storm Fern, which sent natural gas prices soaring and prompted the power sector to ramp up coal-fired generation. As gas prices return to normal levels in 2026 and 2027, coal's substitution demand is expected to weaken.

The decline in coal output is concentrated in the western and interior regions, while Appalachian production is projected to rise steadily over the forecast period.

By region, Appalachian coal output in 2026 is estimated at 162.7 million short tons, up 1.69% year on year. Western region production is forecast at 575 million short tons, down 3.78%.

On the demand side, US coal consumption in 2026 is expected to fall by 28.8 million short tons to 423.6 million short tons, a decline of 6.37%. In 2027, consumption is projected to drop another 4.37% to 405.1 million short tons. The power sector is expected to consume 390.8 million short tons in 2026, down 6.28% year on year.

The EIA noted that coal inventories at US power plants typically build during spring and autumn when seasonal demand declines. This summer, however, utilities drew down stockpiles to meet high electricity demand amid elevated temperatures.

As of the end of September, US coal inventories stood at about 100 million short tons, compared with roughly 105 million short tons at the end of September 2025. During the upcoming winter from November to March, inventories are expected to remain relatively stable at an average of about 106 million short tons.

In the past two winters, below-average temperatures boosted US power generation and drew down utility coal stockpiles. This winter, the EIA expects milder temperatures, combined with planned retirements of some coal-fired plants and low natural gas prices, to result in lower coal-fired generation than last winter.

Coal consumption by the retail and other sectors in 2026 is forecast at 18.4 million short tons, down 11.54% year on year, while other industrial coal consumption is projected at 177,000 short tons, down 11.94%.

In 2027, total US coal consumption is expected to fall further to 405.1 million short tons. The power sector is forecast to consume 372.1 million short tons, down 4.79% year on year. Retail and other sector consumption is projected at 17.8 million short tons, down 3.26%, while other industrial consumption is estimated at 17 million short tons, down 3.95%.

In terms of the power generation mix, coal's share of US electricity output is expected to fall to 16% in 2026 from 17% in 2025, and further to 15% in 2027. Natural gas's share is seen holding steady at around 40%, while renewables continue to gain share, underscoring coal's diminishing role as a baseload power source.

On exports, US coal shipments in 2026 are forecast at 102.4 million short tons, up 10.58% year on year. Metallurgical coal exports are projected at 53.8 million short tons, up 7.39%, while thermal coal exports are estimated at 48.7 million short tons, up 14.59%.

In 2027, US coal exports are expected to edge up to 102.8 million short tons, a gain of 0.39% year on year. Metallurgical coal exports are forecast at 55 million short tons, up 2.23%, while thermal coal exports are seen at 47.8 million short tons, down 1.85%.

With domestic consumption falling faster than production, the volume of coal available for export has effectively increased. However, weak global coal demand, international price competition and the gradual retirement of US coal capacity could limit export growth.

On emissions, the EIA expects total US energy-related carbon dioxide emissions to fall to 4.85 billion tonnes in 2026 from 4.9 billion tonnes in 2025, a decline of 1.44%, before easing slightly to 4.84 billion tonnes in 2027. The drop in CO2 emissions reflects the expected decline in coal consumption and partly reflects lower consumption of various petroleum products.

Coal-related CO2 emissions are projected to continue declining in 2027, but the decrease will be offset by rising natural gas-related emissions, mainly due to growth in commercial and industrial consumption.

Overall, US coal production and consumption are returning to a downward trajectory in 2026-2027 after a brief rebound in 2025. Lower coal consumption in the power sector is directly driving down CO2 emissions, while exports are constrained by the global energy transition and shrinking domestic capacity, making significant growth unlikely.