Power sector shift drives coal consumption down after record 2025

Coal usage will decline due to increasing competition with other energy sources.

Global coal demand is projected to decline through the end of the decade despite record levels in 2025.

According to the 2025 International Energy Agency’s (IEA) annual market report, coal usage will decline due to increasing competition with other energy sources such as renewables, natural gas, and nuclear energy. 

IEA found that coal reached a record 8.85 billion tonnes in demand, up from 0.5% from last year but in 2030 global demand is expected to tick lower to the same level in 2023.

The decline will be driven by shifts in the power sector, which accounts for two-thirds of total coal consumption.

With other power sources surging, coal-fired generation is forecast to decline from 2026 onward.

Whilst globally coal usage is trending down, China and India may be the main drivers of coal resilience.

Should China see faster-than-expected growth in electricity consumption, slower integration of renewables, or strong investment in coal gasification, it could push global coal demand above the forecasts, according to the report.

However, China reduced imports in 2025 due to oversupply and sluggish demand, a trend that is expected to continue to 2030. This is set to lead to a reduction in coal trade worldwide.

According to the report, metallurgical coal appears to have stronger prospects due to India’s reliance on imports to support its growing steel industry.

Overall, with demand lowering and alternatives rising in market share, coal is projected to decline in most major countries through 2030.