The year 2025 was a record year for coal. According to the 2025 edition of the annual report on this source produced by the International Energy Agency (IEA), coal consumption will reach a new record of 8.85 billion tons in 2025, representing a growth of 0.5 percent, which follows the previous year’s 1.5 percent increase.
Despite being unanimously considered the most polluting energy source even from a climate point of view, coal has seen continuous growth in installed capacity, which was just over 1,000 GW in 2000, rose to 1,916 GW in 2015, the year of the Paris conference, and has since grown (thanks mainly to Chinese demand) by another 259 GW to the current (end-of-2024 data) 2,175 GW.
In 6 years it will go from 35 percent to 27 percent
But its cycle is showing early signs of decline, however. Installed coal-fired capacity remains high, but with declining average uptime as retrofit programs allow lower minimum operation and faster ramp-up to integrate variable renewables. “These changes,” IEA argues, “underscore that coal remains essential for reliability in several regions, but its operational role is increasingly decoupled from power generation as clean energy growth accelerates. Its share in the electricity mix will fall from 35 percent in 2024 to 27 percent in 2030.”
Meanwhile, coal put in a 2025 destined to go down in the annals. “Global coal demand in 2024 reached 8,805 Mt, an increase of 1.5 percent over the previous year. By 2025,” the study continues, “global coal demand is expected to reach 8,845 Mt, setting a new record. The increase of about 40 Mt over 2024 is very similar to the forecast we made last year.”
The driver is in Beijing
And the driver is still in Beijing. In fact, China consumes 30 percent more coal than the rest of the world combined. It also produces more coal than all other countries combined and is the world’s largest importer. This dominance by a single country makes global coal markets highly dependent on developments in China, particularly those related to economic growth, government policies, energy markets, weather conditions, and dynamics in China’s domestic coal sector. “In 2025,” IEA notes, “China’s coal consumption remained stable at 4,953 million tons. Our forecast sees China’s coal demand declining slightly over the next five years, but the decline is slow (less than 1 percent per year on average).”
IEA points out that in 2025 there were “some unexpected regional trends that had the effect of canceling each other out.” The United States experienced an increase in consumption of about 37 Mt, supported by policy measures and higher gas prices. Indeed, a notable development in the 2025 coal markets was the emergence of “strong policy support for coal in the United States, which helped lift coal demand in 2025.”
Trump’s role
Donald Trump’s famous big beautiful coal. Who has unembarrassingly implemented overtly pro-coal policies: several measures have been taken to support both the supply and demand side, which include environmental exemptions that allow some coal plants to continue operating, a reduction in the royalty rate for coal mining on federal lands, and support for retrofitting coal plants. But this will not stop the decline even in America.
“According to our forecasts,” the report points out, “U.S. coal demand will decline by 6 per cent per year on average through 2030, based on continued growth in renewable generation capacity and continued coal plant retirements, albeit at a slower rate than previously projected. However, the rate of decline in U.S. coal use could be slower if electricity demand is higher than expected or if coal plant retirements stall.”
Another unexpected trend is in the European Union, where the decline in coal demand has slowed: lower hydro and wind power generation pushed up coal power generation in the first half of the year. As a result, EU coal demand is set to decline by only 2 per cent in 2025, a much smaller drop than the double-digit declines in 2023 and 2024. And although India has been the engine of growth in recent years, its coal demand in 2025 has been declining.
The outlook to 2030
But it is a decline that should not deceive. “In fact, the quantitatively largest growth in coal consumption between now and 2030 is expected to occur in India itself, where demand is expected to rise by an average of 3 per cent per year, leading to a cumulative increase of more than 200 million tons (Mt). Meanwhile, the fastest per centage growth is expected to occur in Southeast Asia, where coal demand is expected to grow by more than 4 per cent per year through 2030.”
Now, however, global demand is approaching its peak, which is expected to be reached between this year and 2027: it is not ruled out that 2025 will be the record high, as part of a “plateau” from which coal will slowly decline by the end of the decade. “In the period to 2030,” IEA notes, “global coal demand is expected to continue its plateau, albeit declining slightly by the end of the decade. According to our forecast, global coal demand in 2030 is expected to reach the level seen in the years leading up to 2023. China’s share remains dominant, although its coal demand flattens as renewables expand and coal’s role in the power sector shifts toward flexibility. India emerges as the largest source of incremental demand, adding 225 Mt from 2025 to 2030, whilst ASEAN(Association of Southeast Asian Nations) countries contribute 127 Mt, led by Indonesia and Vietnam. In contrast, the European Union and the United States record further declines of 153 Mt and 106 Mt, respectively, as phase-out policies and fuel switching accelerate. In the rest of the world, coal demand declines by 179 Mt, reflecting mixed trends in Africa, South Asia (excluding India) and other emerging markets.”
The use for the chemical industry
However, coal has many uses besides power generation or use in steel mills. There is also the use of coal for the production of industrial chemicals, which releases even more greenhouse gases than burning coal for energy production, and yet this practice is on the rise. According to the latest edition of the Global Coal Exit List (GCEL), a database created by nearly 50 nongovernmental organisations, including Urgewald, a German environmental group, the number of new coal-based chemical plants in the planning stage has nearly doubled in the past year to 47.
Typically, coal is converted into chemicals such as urea, ammonia, methanol and olefins through an initial gasification process. Of the 47 coal-fired chemical plants identified, 21 will be built in China. By 2024, 7 per cent of the coal used by China, the world’s largest coal consumer, was converted into chemicals, according to the report. India ranks second in expanding coal-to-chemical conversion capacity, with 14 plants in the planning stage, encouraged by coal gasification subsidies. Indonesia plans to build 6 plants, Kazakhstan 3, Botswana 2 and Pakistan 1.
As in, coal has a thousand lives and they all lead to the increase of CO₂ in the atmosphere.
