Caleb Hamilton
Coal demand in 2026 is forecast to rise 1.2% to a record 8.94 billion metric tonnes as constrained energy trade lifts gas prices and pushes some power systems toward coal. The International Energy Agency says supply disruption, rather than a coal shipping bottleneck, is driving the shift.
Hormuz disruption is pushing some countries back to coal
The International Energy Agency’s mid year update links the coal outlook to higher natural gas prices, following conflict in the Middle East and restrictions on trade through the Strait of Hormuz. The corridor’s disruption has reduced liquefied natural gas shipments and added to wider energy market strains, while oil and gas prices have risen in recent months.
Some countries facing shortages have increased coal use as they try to replace missing fuel. The list includes Japan, India, Bangladesh, the Philippines, South Korea, Thailand, Taiwan and China, as well as some European countries. Depleted oil inventories have added pressure, while renewable energy capacity is still expanding gradually.
China’s shift is not limited to electricity generation. High oil prices have also contributed to greater coal consumption for chemical product production in recent months. That matters because coal demand can respond to fuel costs outside the power sector, too.
The IEA said coal trade itself has not been directly interrupted by the Strait of Hormuz crisis. Virtually no coal shipments pass through the route. Instead, tighter natural gas supply has raised prices and encouraged some electricity systems to substitute coal for gas.
Coal demand forecast reaches a record despite lower output
Global coal production matched a record high in 2025. The IEA expects output to edge down year over year in 2026, even as consumption rises. Its forecast puts global use at 8.94 billion metric tonnes, an increase of 1.2% that would set a new record.
The two largest consumers are expected to move in different proportions, though both forecasts point upward. China’s coal demand is projected to grow 1% to 5 billion tonnes. India’s is expected to climb 4.2% to 1.353 billion tonnes.
Weather could add another source of pressure in coming months. If the particularly strong El Niño pattern anticipated in the source outlook develops, higher than normal temperatures could raise electricity demand across Asia. Lower hydropower output would leave less electricity available from dams, potentially increasing the need for other generation in major markets such as India and Vietnam.
These forecasts do not mean every country is increasing coal use. The United States, for example, is expected to record a decline even as global consumption rises. The difference reflects how local fuel availability and power supply shape the response to a common shock in international energy markets.
Renewables are growing, but coal remains a fallback
Several governments have kept relying on coal despite commitments to reduce its use. At the 2021 COP26 climate summit in Glasgow, diplomats from almost every country agreed to phase down global coal consumption. Since then, electricity demand and energy security concerns have continued to complicate that goal.
Italy announced in March that it planned to delay the shutdown of its coal fired power plants for 13 years. Germany is considering restarting some coal plants to meet electricity demand. In March, Chancellor Friedrich Merz argued that keeping power available was necessary to protect the country’s industrial base, and said existing phase out plans had become unrealistic.
Renewable energy investment is accelerating in many countries, but the transition has not yet removed the need for fossil fuel power in most places. Building out renewable capacity takes time, and shortfalls in gas supply or hydropower can create an immediate need for generation from existing plants.
The United States stands apart from the coal demand increase expected elsewhere. Coal use there is projected to fall by around 7% in 2026, after an unexpected rise last year. Abundant, inexpensive domestic natural gas has largely insulated the country from the global gas disruption. New solar and wind capacity, developed at a faster pace over several years, has also reduced the need for coal.
Coal’s emissions impact adds to the climate concern
The expected demand increase comes as the United Nations has acknowledged for the first time that the world is set to exceed the goal of limiting warming to 1.5°C above pre industrial levels. A rise in coal consumption would add to the challenge because greater coal use is expected to lift coal related emissions this year.
Global energy related carbon dioxide emissions increased 1.1% in 2025, reaching 35.806 billion tonnes, according to the Energy Institute. The United States accounted for about 13.3% of the increase in direct energy related carbon dioxide emissions. Under a wider measure that also counts methane and flaring, it represented roughly one third of the global increase.
The figures underline how sharply emissions can be affected by changes in energy use. The IEA’s 2026 forecast rests on a specific pressure point: restricted gas supply is making coal more attractive to some electricity systems, even as countries expand renewable capacity and work toward climate commitments.
