Rapid economic recovery is driving global coal power generation to a record this year and overall coal demand to a potential all-time high underlining urgent need for policy action, the International Energy Agency (IEA) revealed.
The IEA said in its annual market report this was undermining efforts to reduce greenhouse gas emissions and was potentially putting global coal demand on course for an all-time high this year.
After falling in 2019 and 2020, global power generation from coal is expected to jump by 9% in 2021 to an all-time high of 10,350 terawatt-hours, according to the IEA’s Coal 2021 report.
The rebound was being driven by the rapid economic recovery, while the steep rise in natural gas prices has also increased demand for coal power by making it more cost-competitive.
“Coal is the single largest source of global carbon emissions, and this year’s historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero,” said IEA executive director Fatih Birol. “Without strong and immediate actions by governments to tackle coal emissions – in a way that is fair, affordable and secure for those affected – we will have little chance, if any at all, of limiting global warming to 1.5C.”
“The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action,” added Keisuke Sadamori, director of energy markets and Security at the IEA. “Asia dominates the global coal market, with China and India accounting for two-thirds of overall demand. These two economies – dependent on coal and with a combined population of almost 3 billion people – hold the key to future coal demand.”
In 2020, global coal demand fell by 4.4%, the largest decline in decades but much smaller than the annual drop that was initially expected at the height of the lockdowns early in the pandemic, the report shows. Coal demand grew by 1% for the full year in China, where the economy began recovering much earlier than elsewhere, whereas it dropped by nearly 20% in the United States and the European Union, and by 8% in India and South Africa.
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