While the West is Saving the Climate, Two Major Powers Consumed Record Amounts of Coal Last Year
The growing economies of China and India will continue to drive record demand for coal even as both countries have set ambitious targets for renewable energy development, experts say.
China is the world’s largest consumer of energy, while India is in third place, and both countries are the largest consumers of coal.
China’s share of global electricity consumption, 60 percent of which is generated by coal, is set to jump to a third by 2025, compared to a quarter in 2015, International Energy Agency (IEA) projections show.
“If India and China continue to grow economically at decent rates over the next decade, we won’t see global demand for coal disappear any time soon,” Ian Roper, commodity strategist at Astris Advisory Japan KK, told CNBC.
Global coal consumption in 2023 reached a record high, surpassing 8.5 billion tonnes for the first time, thanks to strong demand in emerging and developing countries such as India and China, the IEA said in its report.
There is no sign of slowing, with the IEA saying coal consumption in India and Southeast Asia is forecast to ‘rise significantly’.
India’s coal production rose to 893 million tonnes in the fiscal year ending March 2023, jumping nearly 15 percent from a year earlier. And China’s raw coal production from January to November 2023 rose 2.9 percent compared to the same period in 2022.
In contrast, the US, the world’s second largest consumer of coal, is seeing a decline in its use of the fuel. According to the Institute for Energy Economics and Financial Analysis (IEEFA), the daily coal consumption has dropped by 62 percent — from 2.8 million to 1.1 million tons/day.
Globally, carbon emissions from fossil fuels reached record levels last year. It is projected to rise by 8.2 percent in India and 4 percent in China, according to the latest Global Carbon Budget estimates.
The two countries, however, are adopting and setting aggressive renewable energy development plans.
India has set an ambitious goal of meeting 50 percent of its electricity demand from renewable sources by 2030. However, 75 percent of its energy comes from coal-fired power plants. India’s power plant inventories rose six percent in 2023 from a year earlier, according to research by Citibank. The country is also set to add 80 gigawatts of thermal capacity using coal over the next eight years.
Similarly, coal accounts for 61 percent of China’s electricity generation even though the country is recognized as a leader in the expansion of renewable sources. New green projects are coming online at almost the same rate as the rest of the world to meet carbon neutrality ambitions by 2060.
But the lack of reliability of renewable energy sources means that coal is still a critical backup option for these two countries.
Last year, China was hit by a drought for several months, which reduced the production of hydro-power in its southern provinces. The same is happening to India.
In October last year, coal’s share of electricity generation rose to 80 percent, compared with 73 percent in 2022, as monsoon rains were weaker than usual.
This means that these two countries will continue to rely on coal as their primary source of energy production for years to come.
