Can Global Coal Demand Decrease to Meet 2050 Net Zero Goals?

Worldwide, efforts to combat climate change continue to intensify in the pursuit of net zero. However, as the availability and reliability of renewables continues to grow, the demand for coal remains surprisingly resilient. 

Coal, a significant contributor to carbon emissions globally, continues to be relied upon thanks to rising electricity needs. According to the International Energy Agency (IEA), coal demand across the world is expected to remain stable in 2024 and 2025, rather than decreasing.

The IEA’s report highlights a complex energy landscape, driven by the electricity needs of major economies like China and India, and how coal will continue to play a role. 

This however comes after the IEA said investment in clean energy in 2024 is set to be twice the amount going to fossil fuels.

So, why is coal still a factor influencing the energy landscape and how does it come into play as the world navigates the road to net zero?

The road to net zero: Reducing reliance on coal

Net Zero by 2050 is a global framework that has encouraged businesses, governments and countries, to name a few, to announce pledges of net zero emissions in the coming decades — and the sheer number of those continues to grow.

“We are witnessing the beginning of the end of the fossil fuel era and we have to prepare ourselves for the next era,” Dr Fatih Birol, Executive Director of the IEA said off the back of another IEA study which, for the first time, forecast that demand for oil, natural gas and coal will all peak before 2030.

The main countries that will prove a challenge in cutting out fossil fuels out of their ecosystem are China and India, both of which are coal-hungry giants that struggle to leverage the power of renewables, particularly hydropower.

China, where more than half of the world’s coal is used, is expected to continue relying heavily on fossil fuels, however, its dependence on electricity generated by coal has just reached an all-time low, according to Carbon Brief.

To combat this, and to reduce its reliance on fossil fuels, China is investing heavily in renewable energy sources such as wind, solar and hydropower, with hydropower accounting for 17% of its total installed power generation capacity and 16% of total power generation.

It is also home to almost half the world’s operating wind power capacity, as well as more solar capacity than the rest of the world combined.

Keisuke Sadamori, IEA Director of Energy Markets and Security, said: “The continued rapid deployment of solar and wind, combined with the recovery of hydropower in China, is putting significant pressure on coal use.

“But the electricity sector is the main driver of global coal demand, and electricity consumption is growing very strongly in several major economies.

“Without such rapid growth in electricity demand, we would be seeing a decline in global coal use this year. And the structural trends at work mean that global coal demand is set to reach a turning point and start declining soon.”

Earlier this year, India saw coal demand surge as a reaction to extreme weather and high electricity consumption, a trend expected to slow as conditions return to normal.

As of 2022, coal accounts for 45% of India’s total primary energy supply, up from 43% in 2020. Altogether, fossil fuel subsidies were five times greater than clean energy subsidies.

How will we reduce our reliance on coal with fossil fuel hungry countries like China and India in the mix?

Despite the formidable challenge presented by fossil fuel-hungry nations like China and India thanks to their rapid economic growth and increasing electricity needs, strategies and efforts are in motion to mitigate coal dependence.

In an op-ed in the Financial Times, Fatih said: “Even as demand for fossil fuels falls, energy security challenges will remain as suppliers adjust to the changes. The peaks in demand we see based on today’s policy settings don’t remove the need for investment in oil and gas supply, as the natural declines from existing fields can be very steep. At the same time, they undercut the calls from some quarters to increase spending and underline the economic and financial risks of major new oil and gas projects — on top of their glaring risks for the climate.

“With today’s policies already bringing the fossil fuel peaks into sight, decision makers need to be nimble. The clean energy transition may well accelerate even further through stronger climate policies. But the energy world is changing fast and for the better.”

Fatih’s words show that reducing the global reliance on coal, especially in major economies like China and India, requires a multifaceted approach that combines renewable energy expansion, energy efficiency, supportive policies, international cooperation and public engagement. 

While the challenges are substantial, the potential benefits for global climate goals and sustainable development are immense. By forming a united front and working together, the world can navigate the complexities of this transition.

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