China's Coal Consumption At New Highs, As Real Estate Crisis Fails To Slow Energy Demands

Global coal consumption reached an all-time high in 2024, climbing to 8.77 billion metric tons as global electricity demand outpaced the expansion of renewable energy.

Despite its contribution to global warming, coal remains rooted in energy systems worldwide, and short-term consumption is set to rise.

"Coal is often considered a fuel of the past, but global consumption of it has doubled in the past three decades," The International Energy Agency (IEA) said in its latest report, revising coal demand higher.

This increase is primarily fueled by demand from countries like India and Indonesia, which offset reductions in coal use by advanced economies such as the United States and the European Union.

China plays a pivotal role in this trend, accounting for over a third of the world's coal consumption, as its demand reached 4.9 billion tons in 2024. Despite massive investments in renewable energy, coal-fired plants continue to generate about 60% of China's electricity.

Imports also hit a record, reaching 542.7 million tons of coal in 2024, a 14.4% increase from the previous year. Lower international coal prices allowed China to stockpile supplies and maintain stable domestic energy costs.

"The increase in China's coal imports in 2024 was supported by declines in seaborne coal prices, which encouraged import arbitrage in relation to China's domestic supply for a wider range of coal types," Toby Hassall, lead coal analyst for LSEG, said per Reuters.

He estimated that its coal consumption grew around 1%, despite subdued consumption in the cement and steel sector owing to the real estate crisis.

China made notable progress in diversifying its energy sources, as the IEA expects it to account for almost 60% of global renewable energy capacity installed by 2030. However, these efforts have not been enough to reduce coal consumption significantly.

The IEA's analysis suggests that China will continue setting annual records for coal use for at least a few more years.

The IEA predicts global coal demand will plateau by 2027, though this stabilization will occur at record-high levels. However, these predictions should be taken with a grain of salt, as the agency has been moving the goalposts on peak coal use for years.

Given China's insatiable energy appetite and Donald Trump's second term, it wouldn't be surprising if consumption edges higher well into the 2030s.

Range Global Coal ETF COAL is down 4.47% year-to-date.

Read Next: