Alexandra MorenoGlobal coal demand climbed to a record 8.85 billion tonnes in 2025, up 0.5% from a year earlier, according to the International Energy Agency's latest global coal report, even as renewable capacity keeps expanding worldwide.
A Record That Keeps Getting Pushed Higher
Bloomberg Opinion columnist Javier Blas flagged the figures on social media, noting that the IEA also revised its 2024 estimate upward. The agency now expects 2025 to mark the peak, with consumption easing roughly 3% by 2030, a level that would still sit above pre 2023 norms. Blas was blunt about the agency's track record here: previous calls for a coal peak have repeatedly proven premature, and he suggested this one deserves the same skepticism.
The persistence of coal cuts against years of pressure from climate policy advocates and investors who have pushed to phase the fuel out of power grids. Instead, the IEA's data shows coal has become structurally embedded in electricity systems and heavy industry, particularly across Asia, even as wind and solar installations grow at record pace.
China Still Sets the Global Pace
China alone burns more coal than the rest of the world combined, which means its trajectory effectively decides the global trend. Demand there is expected to stay roughly flat through 2025 and then dip only slightly by 2030. Renewable buildout is chipping away at coal's share of electricity generation, but the fuel remains critical for keeping the grid stable. Coal to chemicals conversion and gasification projects are also picking up slack left by softer demand from cement and steel, which the IEA flags as an upside risk to its own forecast.
India and Southeast Asia Drive the Growth
India is the single largest source of new coal demand through 2030, pulled along by rising electricity use, cement output, steel production and coal fed industrial processes. Southeast Asia is growing even faster in percentage terms, powered by new coal fired plants and metals processing capacity. Between them, these two regions are absorbing most of the decline seen in wealthier economies.
Europe's coal use keeps shrinking on a structural basis, though short term burn swings around depending on natural gas prices, how much wind blows, and lingering worries over supply security. Political will to exit coal varies sharply by country, with several governments granting delays or exemptions to keep plants running longer than originally planned.
Why US Retirements Are Slowing Down
In the United States, coal demand is actually rebounding this year, a reversal tied to higher natural gas prices, weather patterns and federal policy support. Goldman Sachs analysts led by Carly Davenport told clients this month that they have trimmed their forecast for US coal plant retirements to about 40 gigawatts of capacity through 2030, down sharply from a prior estimate of 66 gigawatts. The reasoning: utilities need to keep existing coal assets online to meet growing electricity demand until new baseload alternatives are ready to take their place.
That growing demand traces largely to AI data centers and broader electrification of the economy, both of which are straining power grids faster than new generation can be built. Nuclear capacity additions that might eventually replace coal as a steady, always on power source are not expected to arrive at scale until sometime in the 2030s.
Will the 2025 Peak Actually Hold
The IEA's own history of coal peak calls gives reason for caution. Whether this year truly marks the high water mark for global coal consumption depends heavily on how fast China's coal to chemicals sector grows, how much new coal capacity Southeast Asia brings online, and whether US utilities keep leaning on coal plants to cover data center driven demand spikes.
