Global coal demand expected to remain stable in 2025–2026: energy transition needs to accelerate

Image source: iea.org

The International Energy Agency (IEA) forecasts global coal demand to remain at record levels in 2025, followed by a slight decline in 2026, reaching just below the 2024 peak. This situation remains largely stable, despite regional fluctuations: China and India will see modest declines, the United States will see a 7% increase, while the EU is forecast to experience a 2% decline. The electricity sector remains the main user, especially in emerging countries, confirming that the green transition remains hampered by dependence on the most polluting source.

Global coal demand trends

Although some regions have already reversed the trend, the end of the explosive growth in coal demand is leading to a plateau rather than a decline. The IEA forecasts a slight increase in 2025, followed by a marginal decline in 2026, keeping global demand roughly in line with the peaks reached in 2024.

The reasons: slowing economic growth, increased penetration of renewables, and changes in energy policies, amid record production especially in China and India.

Divergent trends: declines in China and Europe, growth in the United States

Specifically, coal demand in China is expected to decline by around 0.5–1% , held back by lower electricity consumption and growing renewables. In India , the first six months of 2025 show declines of up to 2% due to weather conditions, but slight annual growth is expected. Conversely, in the United States, demand will grow by 7% , driven by rising electricity consumption and high gas prices. In the EU , a slight decline of almost 2% offsets the increase in electricity demand with increased competition from renewables.

Production and trade: new peaks, but trade declines

Global coal production will reach a new record in 2025 , thanks to expansion in China and India. However, a contraction is expected in 2026 due to high inventories and falling prices.

International trade will also suffer a setback: after years of growth, traded volumes will decrease for the first time since 2020 , projecting an ongoing double decline.

Energy transition: insights from the coal plateau

The fact that global coal demand remains at a plateau in 2025 and 2026 highlights how much the energy transition still needs to accelerate. On the one hand, the stability of fossil fuel consumption highlights the resilience of the coal-fired electricity sector; on the other, it demonstrates the untapped potential of renewables, which are already eroding market share in many areas. The real challenge for the coming years will be to accelerate the integration of clean energy sources , through more robust grids, increasingly high-performance storage systems, and policies capable of reducing the cost of capital in emerging markets. All of these elements will determine the pace at which efficient and electrified technologies can scale up at scale.