Global coal consumption hits 'record high' in 2022

Global coal consumption is set to rise to an all-time high in 2022 amid the energy crisis. 

A report by the International Energy Agency (IEA) said on Friday that high gas prices driven by sanctions imposed on Russia after the start of the war in Ukraine have led some countries to turn to relatively cheaper coal. 

While an increase in coal use in Europe is expected to be temporary, the report warns that it will stay at similar levels in the coming years unless stronger efforts are made towards speeding up the transition to clean energy.

The report forecasts that global coal use will rise 1.2 percent this year, exceeding 8 billion tonnes in a single year for the first time and surpassing a previous record set in 2013. According to the report, it will remain at that level until 2025 - which means coal will remain the largest single source of CO2 emissions.

The rise comes even as slowing economic growth has reduced electricity demand and industrial production and despite power generation from renewables reaching a record high.  

The largest increase in coal demand is expected to be in India at 7 percent, followed by the European Union at 6 percent and China at 0.4 percent. 

The past year has seen severe droughts in several parts of the world, crippling hydropower generation in countries including in Spain, Tanzania and China.  

“The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security. “Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions.”

Coal is the dirtiest energy source, accounting for around 40 percent of global greenhouse gas emissions from fossil fuels.

Rising demand in Europe

In Europe, rising demand for coal has been driven by an attempt by EU countries to wean themselves off Russian gas in response to the war in Ukraine - followed by a dramatic drop in supply from Russia in retaliation.

In early September, Russia shut down the Nord Stream 1 pipeline, which was supplying 35 percent of the bloc’s Russian imports via the Baltic Sea. In late September, the pipeline was subject to an apparent act of sabotage, according to an investigation by the Swedish authorities.

Since the start of the year, Germany has shifted some power plants back to coal – despite a commitment to stop its use by 2030. France has also reopened a recently closed coal plant, while the Netherlands has removed a production cap on coal power.

As a result, the IEA says, Europe is on course to increase its coal production for the second year in a row. However, the agency expects European coal consumption to decline below 2020 levels by 2025.

Asian production on the rise, but no new investments

China, India and Indonesia – the world’s three largest coal producers – are set to hit records in production in 2022, the IEA says.

But the agency also points out that there is no sign that investment is on the rise in export-driven coal projects – reflecting a lack of appetite for coal among investors in the medium and long term.

“There are many signs that today’s crisis is accelerating the deployment of renewables, energy efficiency and heat pumps – and this will moderate coal demand in the coming years,” Keisuke Sadamori said.

“Government policies will be key to ensuring a secure and sustainable path forward,” he added.