Global coal demand reached consecutive record highs in recent years, peaking at approximately 8.85 billion tonnes in 2025, a 0.5% increase from 2024.
This followed a 1.2-1.4% growth in 2024, driven by surging electricity needs and industrial use. China, consuming over half the world’s coal (30% more than the rest combined), saw demand remain flat amid strong renewables growth but offset by power sector needs. India experienced a rare decline in coal-fired power generation due to abundant hydropower from monsoons. Despite record energy demand growth, coal power generation fell 3.4% in 2025, marking the first decline in five years. This paradox reflects India’s accelerating energy transition while maintaining coal’s strategic reserve function for grid reliability and peak demand management. The European Union continued phasedowns, with demand falling 2%.
Production hit all-time highs in 2024-2025, led by China and India, but stocks built up. International trade declined 5% in 2025, the first drop since 2020, with falling imports in Asia. Weakened 10-20% in 2025 versus 2024, approaching marginal supply costs amid oversupply and softer demand. The market shows signs of softening in late 2025 and early 2026, with renewables (especially in China and India) displacing coal in power generation.
Consensus from major forecasts (IEA, World Bank) indicates the global coal market has plateaued after 2025’s record, with limited growth ahead. Demand expected to remain flat or decline marginally, returning below 2024-2025 levels. Renewables, nuclear revival, and cheaper LNG intensify competition. Industrial use (e.g., steel, chemicals) declines slowly, partially offset by China’s coal gasification.
Uncertainties include extreme weather boosting short-term demand, policy shifts (e.g., slower retirements), or faster renewables deployment accelerating declines. Overall, the market faces structural headwinds from clean energy transitions, with emerging Asia as the last bastion of growth.
The United States saw an 8% surge from higher natural gas prices and policy delays on plant retirements. President Trump continues to strongly support the coal industry, emphasizing “beautiful clean coal” for national security, grid reliability, and baseload power amid growing energy demands. Trump signed an order directing the Department of Defense to prioritize long-term power purchase agreements with coal-fired plants for military bases and critical facilities. The White House describes this as strengthening national defense with reliable energy, claiming it has halted closures of 17 gigawatts of coal capacity and spurred new investments.
The administration announced $175 million to modernize and extend the life of six coal plants in states including Kentucky, North Carolina, Ohio, Virginia, and West Virginia. The administration has issued emergency orders to keep aging coal plants operational, including a fourth extension for a Michigan plant (costs now at $135 million). Similar actions target plants near military or critical infrastructure. These actions align with Trump’s long-standing campaign promises to support coal miners and domestic fossil fuels.
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