2023 Coal Use Set To Touch New Record, Predicts IEA

According to a report from the International Energy Agency, global coal consumption is on track to rise by 1.2% and reach a record high this year.

The Russian invasion of Ukraine in February 2022, according to the International Energy Agency (IEA), “sharply altered the dynamics of coal trade, price levels, and supply and demand patterns in 2022,” makes this development particularly volatile and uncertain for the world’s energy markets.

“Coal markets have been shaken severely in 2022, with traditional trade flows disrupted, prices soaring and demand set to grow by 1.2%, reaching an all-time high and surpassing 8 billion metric tons for the first time,” the IEA said in its Coal 2022 report, published Dec. 16.

This year, the cost of fossil fuels increased significantly, according to the agency, “with natural gas showing the sharpest increase.”

“This has prompted a wave of fuel switching away from gas, pushing up demand for more price competitive options, including coal in some regions,” it added.

The situation is complicated despite the rise in coal demand. According to the IEA, “higher coal prices, strong renewable energy and energy efficiency deployment, and weaker global economic growth are tempering the increase in overall coal demand this year.”

It predicted that this year’s increase in coal use for electricity generation would be just over 2%. In reality, less steel and iron will be produced, which will result in a more than 1% decrease in coal usage in industry.

“The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet,” IEA Director of Energy Markets and Security Keisuke Sadamori said in a statement. “Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions.”

“At the same time, there are many signs that today’s crisis is accelerating the deployment of renewables, energy efficiency and heat pumps — and this will moderate coal demand in the coming years,” he added.

The “key to ensuring a secure and sustainable path forward,” he said, would be government policies.

The use of coal has a significant negative impact on the environment, according to Greenpeace, which calls it “the dirtiest, most polluting way of producing energy.”

Carbon dioxide, sulfur dioxide, particulates, and nitrogen oxides are just a few of the emissions from burning coal that are listed by the U.S. Energy Information Administration.

The argument over coal’s continued use is still heated. The U.K. government just this month approved plans for a deep coal mine in the northwest of England, a decision that drew both support and criticism.

Future uncertainty was portrayed in the IEA report.

The report predicted that through 2025, the world’s coal demand would plateau close to the 8 billion metric ton level it reached in 2022, but it also warned that “given the current energy crisis with all its uncertainties, a lurch into growth or contraction is possible.”

According to Eurostat, Russia was the largest supplier of petroleum products and natural gas to the European Union in 2021. Russian gas exports to the EU have decreased this year, which has prompted the continent’s major economies to take action to secure supplies for the coming winter.

(Adapted from CNBC.com)

Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability

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