Global coal demand is forecast to rise by about 1.4 percent from the prior year, reaching 8.54 billion tons in 2023, according to a fresh assessment from the International Energy Agency IEA 2023 report. This update underscores how the energy mix remains sensitive to shifts in industrial activity, electricity production, and policy direction across major markets. The projection reflects continued reliance on coal to power thermal plants in different regions, even as cleaner energy options develop in parallel and are pursued with varying urgency.
Meanwhile, consumption patterns show a contrasting picture in North America and Europe. In the United States and the European Union, demand is expected to fall significantly, by about 21 percent and 24 percent respectively, driven by a transition toward natural gas, renewables, and greater energy efficiency. Yet these declines are not uniform across continents. Fast-growing electricity demand in other regions, especially China and India, coupled with rising industrial activity in other developing economies, is likely to offset reductions in the West, maintaining a level of global demand that supports ongoing coal generation in the short to medium term.
Across Asia, the outlook remains nuanced. The IEA anticipates that Asian economies will continue to increase coal usage for power generation and industrial needs in the near term, even as climate pledges and decarbonization targets tighten policy frameworks. The drive for reliable electricity supply, especially in rapidly expanding urban centers, helps sustain coal’s role in meeting peak demand periods and maintaining grid stability during transitional phases toward cleaner energy sources.
China stands as a pivotal factor shaping the global coal trajectory. The IEA notes that China will play a decisive role in determining how the market evolves, given its large energy demand and ongoing investments in both coal-fired capacity and renewable projects. The overall global demand forecast points to a modest decline by 2026, around 2 percent, as the country accelerates its shift toward renewable energy and more efficient technologies. This transition is a central element in the global energy story, influencing prices, trade flows, and the pace of investment in the sector across other regions as well.
In a broader energy policy context, the December discussions among G7 nations highlighted a shared ambition to move away from coal. French President Emmanuel Macron urged the major economies to take a collective stance and minimize coal dependency by 2030. Macron argued that if the wealthier nations lead the way and reduce coal use, it would encourage peers to follow suit, accelerating a global shift toward cleaner energy systems and lower emissions. The conversation reflects a strategic belief in leadership by example and the potential for policy alignment to influence market behavior and investment decisions across the energy landscape.
On the other side of the spectrum, recent signals from Russia suggest adjustments in coal production as part of broader energy market dynamics. These developments contribute to a shifting supply landscape that interacts with policy moves, demand patterns, and technological progress in ways that matter for consumers and businesses in Canada, the United States, and beyond. The evolving mix of supply and demand highlights the interconnected nature of global energy markets, where policy choices, market signals, and technological innovation converge to shape long-term outcomes for electricity prices, industrial competitiveness, and energy security across North America and the wider world.