Coal use across the globe is on track to go up by 1.2%, which would set a record this year, as per an International Energy Agency (IEA) report.
This projection comes at a time when the global energy market is being plagued by volatility and uncertainty, with the IEA saying that the Russia-Ukraine conflict back in February had “sharply altered the dynamics of the coal trade, price levels, and supply and demand patterns in 2022.”
In its Coal 2022 report published on Dec. 16, the IEA stated that “Coal markets have been shaken severely in 2022, with traditional trade flows disrupted, prices soaring and demand set to grow by 1.2%, reaching an all-time high and surpassing 8 billion metric tons for the first time.”
According to the agency, fossil fuel prices saw a significant jump in 2022, “with natural gas showing the sharpest increase.”
“This has prompted a wave of fuel switching away from gas, pushing up demand for more price competitive options, including coal in some regions,” the IEA added.
Even with a rise in coal demand, the current situation is quite complex. According to the IEA, “higher coal prices, strong deployment of renewables and energy efficiency, and weakening global economic growth are tempering the increase in overall coal demand this year.”
The agency also said that the use of coal in generating electricity would increase by more than 2% this year. Although, using coal in the industry is actually projected to tank by over 1%, with the lower production of iron and steel being touted to be the main culprit.
IEA Director: World Fossil Fuel Use “Close to a Peak”
Keisuke Sadamori, the IEA Director of Energy Markets and Security, released a statement, saying: “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. Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions.”
“At the same time, 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,” he went on to say.
Sadamori also posited that policies made by the government would be “key to ensuring a secure and sustainable path forward.”
Coal use substantially impacts the environment. In fact, the environmental organization Greenpeace describes it as “the dirtiest, most polluting way of producing energy.”
Meanwhile, the U.S. Energy Information Administration enumerated a range of emissions from coal combustion. These include carbon dioxide, sulfur dioxide, particulates, and nitrogen oxides.
The IEA’s report has shown the uncertainty the economy has to face moving forward.
The agency forecasted global coal demand plateauing near 8 billion metric tons until 2025, but it also mentioned that “given the current energy crisis with all its uncertainties, a lurch into growth or contraction is possible.”
In 2021, Russia topped the list of natural gas and petroleum suppliers to the European Union, as per Eurostat. However, Exports of Russian gas that are bound to the European Union decreased this year, which prompted major economies in Europe to make efforts in getting supplies for the colder months.