Increased energy consumption will increase demand for coal
For some time, especially in Europe, there has been a policy seeking to minimize the share of fossil fuels in the context of electricity generation. The main raw material planned to reduce consumption was coal. However, emerging new technologies mean that 2024 was another year in which the world’s coal consumption record was broken. Experts predict that the world’s record coal consumption is still ahead.
In which sectors is coal used?
Coal is still widely used in many industries – a reason why its consumption reached a record high in 2024. According to the International Energy Agency, 8.77 billion tons of coal were mined last year. Such a result, however, is not expected to be an all-time record, as peak mining is expected to occur in 2027.
Coal is widely used to generate electricity for industrial needs. The steel sector, for which coking coal is hugely important, is also growing – hydrogen furnaces are still a distant future, and electric furnaces will also use coal or blast furnace coke derived from coal. The drive for green energy, to be provided by huge windmills and photovoltaic farms, requires the use of significant amounts of steel, which currently cannot be produced without coal – heralding precisely the increases in coal consumption in the coming years.
Earlier IEA forecasts announced that maximum coal production would occur in 2024. However, they have changed due to the pace of development of modern technologies such as AI, among other things. Data centers, which gather all the information needed for the operation and development of artificial intelligence, require significant amounts of electricity, the source of which is fossil fuels, led by coal. Already, data centers account for nearly 4% of global greenhouse gas emissions. This means that these centers emit more harmful gases than the entire aerospace industry, yet artificial intelligence is a rapidly growing field of science, so its energy requirements will continue to grow.
How big a role does China play in coal consumption?
The world’s undisputed leader in terms of coal consumption is invariably China. Over the past 25 years, China has consumed 30% more coal than all the world’s countries combined. Huge investment, energy-intensive industries are still largely powered by electricity, which coal provides. This has translated into a demand for coal in China of 4.9 billion tons. At the same time, it is worth noting that China is also a world leader in the aspect of renewable energy. Nevertheless, industry and data centers mean that China has a huge demand for electricity. Unlike countries in the European Union, reducing greenhouse gas emissions is not the most important issue for China. Of greater importance to them is energy security, which has been a priority issue for them since Russia’s attack on Ukraine. At the time, they increased coal mining – the plan for 2025 is to produce 4.8 billion tons of coal.
Experts also point to the growing demand for coal in a country whose economy continues to grow – India. Among other things, the country is showing a growing demand for steel, as a result of the undertaking of many construction and infrastructure projects. Because of this, demand for coking coal, which is used in steel production, is also growing. In addition, new data centers are being built within India in response to global advances in technological development. These centers will use coal as a fuel. The raw material is responsible for more than 70% of the country’s electricity. India’s planned coal production will reach 1.4 billion tons by 2027, and then 1.58 billion tons by 2030. The growing demand for coal in China and India is somewhat offset by the willingness of EU countries and the US to reduce their consumption of the resource. In the case of the latter, the possibility of abandoning the plan to reduce coal consumption after the 2024 presidential election should be taken into account.