The IEA's coal projections on demand and emissions
- 20 Dec 2012, 15:25
- Freya Roberts
released earlier this week from the International Energy Agency
(IEA) predicts global coal demand will grow by 16.9 per cent over
the next five years, or 2.6 per cent per year. This is
largely thanks to to the pace of growth in China - the report says
that if economic growth in China continues on its current pathway,
it will consume more coal than the rest of the world combined by
2014. This far outweighs a predicted reduction in coal demand in
the US, where the IEA says cheaper natural gas has encouraged a
switch away from coal.
We take a closer look at the IEA's report to find out what's
happening to coal consumption in wealthy and developing countries,
and ask how changing demand will affect greenhouse gas
Coal demand falters in developed countries
The IEA predicts that across a group of the world's richest
nations - members of the Organisation for Economic Co-operation and
Development (OECD) - the amount of coal used to generate
electricity will fall by 0.8 per cent per year over the next five
But despite this fall and the growth of gas and renewables, coal
will remain the main fuel for generating electricity in OECD
According to the report, the use of coal to generate power will
increase 1.3 per cent each year in developed countries in Asia and
Australasia. Coal demand is expected to rise in some European
countries, but the IEA predicts that public opposition to coal and
the closure of many old coal-fired power plants is likely to limit
growth. This means that across the European OECD region as a whole,
coal demand will likely change little. The IEA also predicts the
carbon price set by the European Emissions Trading Scheme will go
up in the future, which makes burning carbon-intense coal less
The biggest change to coal demand in richer countries comes
from the United States, where the IEA predicts an increase in cheap
gas will push out coal use in the power sector, with consumption
predicted to fall 2.4 per cent each year.
Coal used outside of power generation, for example in industry and
for heating, is also projected to fall 0.5% each year in the OECD
region. These non-power uses account for around a fifth of total
Coal demand booms in developing countries
Coal use in countries that are not part of the OECD will rise, the
IEA says. Led by continuing economic growth in China and India,
coal demand for electricity generation is projected to increase 4.7
per cent each year.
Assuming its economy continues to grow at a fast pace, China will
see the largest increase in coal use in the power sector in
absolute terms. But in percentage terms, other non-OECD
countries in Asia like Indonesia and Vietnam will see bigger
increases in demand for coal.
In Eastern Europe, natural gas will still play a central role in
power generation, so the increase in coal demand is expected to be
slower than elsewhere - around 2.3 per cent each year.
In poorer countries, a significant proportion of coal use is for
heavy industry and heating purposes, rather than generating power.
IEA figures show that in 2017, these non-power uses will account
for 46 per cent of demand, while power generation will account for
54 per cent of demand in non-OECD countries.
That makes a three per cent growth in non-power coal demand each
year quite significant. The majority of this growth is, again,
expected to come from China, where coal is used heavily in industry
and for fuel in homes. In relative terms, India will see the
fastest growth in coal demand.
Consequences for greenhouse gas emissions
As global demand for coal increases, greenhouse gas emissions are
also set to rise - especially with technology to capture carbon
emissions still in its infancy.
The IEA predicts that in OECD countries the decline in coal
burning over the next five years will reduce carbon dioxide
emissions by 250 million tonnes. But that will be far outweighed by
an increase of about 3500 million tonnes of carbon dioxide, as coal
consumption intensifies in the non-OECD world.
The report calculates that by 2017, a quarter of coal-based carbon
dioxide emissions will come from OECD countries, and three quarters
will come from non-OECD countries. It's worth pointing out though
that many coal-intensive industries like steel and cement
production are based in developing countries, producing goods that
developed countries then import. That means a chunk of those
emissions are shifted from OECD countries to non-OECD
The growth in coal demand doesn't look like good news for plans to
reduce greenhouse gas emissions. Coal-related emissions could be
somewhat constrained if China's economic growth slows sooner rather
than later, but with many other countries also relying on coal to
expand heavy industries, heat homes and generate increasingly more
electricity, greenhouse gas emissions are likely to keep