Global Coal Consumption Set for Record Decline as Countries Pursue Renewable Energy

Coal consumption is on track for its most significant decline in history, primarily driven by China’s efforts to combat pollution, implement economic reforms, and promote renewable energy sources. According to a report by Greenpeace, global use of coal decreased by 2.3% to 4.6% during the first nine months of 2015 compared to the same period the previous year. This decline amounts to a reduction of up to 180 million tons of standard coal, surpassing Japan’s consumption during the same timeframe.

The report validates the significant impact of global efforts to combat climate change on the coal industry, the largest contributor to carbon emissions. It arrives just ahead of the International Energy Agency’s annual forecast on global electricity generation and usage.

The decrease in coal consumption will contribute to a reduction in greenhouse gas emissions, crucial in limiting global temperature rise to 2 degrees Celsius (3.6 degrees Fahrenheit) to avoid severe climate change impacts. Greenpeace highlights that coal emissions must decrease by 4% annually until 2040 to achieve this goal.

Lauri Myllyvirta, Greenpeace’s coal and energy campaigner, notes that the earlier perception of a global coal boom in the 21st century was illusory. As policymakers increasingly prioritize climate change, there is an expectation of a shift from coal to natural gas by power generators, leading to an increasing number of stranded coal assets, including mines and coal-fired power plants.

China, responsible for approximately half of global coal demand, witnessed a decline of over 4% in coal usage in the power sector during the first three quarters of the year, coupled with a 31% decrease in imports. The country has increasingly relied on new renewable energy plants to meet its growing electricity demand. The report challenges the perception of China’s ongoing reliance on coal, stating that the capacity utilization of coal-fired power plants has plummeted, with one idle plant being added each week.

In the United States, the share of coal used for electricity generation has decreased from 50% a decade ago to an anticipated 36% this year. More than 200 coal-fired power plants, with a combined capacity of 83 gigawatts, have been scheduled for retirement, including 13 gigawatts expected to be retired in 2021.

Coal consumption in the European Union remained stagnant in the first nine months of 2015 after a record decline of 6.5% in 2014. In India, while domestic coal production and consumption have increased, the country’s push for renewable energy sources has started to impact coal demand, leading to a significant increase in coal stockpiles.

Lauri Myllyvirta concludes that coal is in a state of terminal decline, cautioning against countries investing in coal for export markets, calling such decisions reckless.