Global coal demand is expected to set a new record in 2025, followed by a decline through 2030, according to the latest International Energy Agency (IEA) study.
With renewable capacity surging, nuclear expanding steadily, and a massive wave of liquefied natural gas coming to market, coal-fired power generation is forecast to decline from 2026 onward, the IEA noted.
In the 2025 Coal Report, analysts project consumption to rise by 0.5% this year to approximately 8.85 billion tons. This number would extend the coal run to new highs even as clean energy expands.
Resilient industrial activity, weather-related fluctuations in power demand, and periods of higher natural gas prices have slowed the transition from coal to gas in key markets. The agency attributes the latest leg higher largely to Asia's power-hungry economies. Yet, a temporary upswing in the United States is also a factor.
Key Market Dynamics
China, which uses more coal than the rest of the world combined, has kept demand broadly flat versus 2024 as a rapid build-out of renewables starts to cap growth. Beijing aims to peak domestic coal consumption before 2030, and the IEA expects Chinese use to fall slightly by the end of the decade. The primary trend behind the decline is the aggressive deployment of solar, wind, and nuclear capacity, accompanied by a gradual tightening of energy and climate policies.
China's coal imports already declined in 2025 amid oversupply and sluggish demand, a trend that is expected to continue through 2030, putting pressure on seaborne trade.
India sits at the other pole of the demand story. While an early and intense monsoon has reduced India's coal-fired generation in 2025 for only the third time in five decades, the IEA still expects the country to post the most significant absolute increase in coal use by 2030.
Indian demand is forecast to grow at an average rate of approximately 3% per year, adding more than 200 million tons over the period, as rising electricity consumption and expanding steel production continue to drive demand for power and metallurgical coal. Southeast Asia is expected to grow even faster in percentage terms, with coal use rising by more than 4% annually through 2030 as Vietnam and the Philippines commission new coal-fired capacity to meet industrialization and urbanization needs.
Domestic Factors
U.S. consumption is projected to grow by 8% in 2025, marking a break from a 15-year pattern of roughly 6% average annual declines. Higher gas prices, delays in coal-plant retirements, and federal policy measures that support existing units have all contributed to this trend. Yet, the IEA still projects that U.S. coal use will resume its structural contraction, falling around 6% a year on average to 2030, as renewables and gas regain momentum and aging plants close.
Publicly listed producers remain leveraged to this late-cycle strength. U.S.‑based Peabody Energy Corp. (NYSE:BTU), a major supplier of both thermal and metallurgical coal, has benefited from firm export and domestic demand. Its shares have doubled over the past six months, outpacing the broader U.S. energy sector.
Meanwhile, Warrior Met Coal Inc. (NYSE:HCC), a leading exporter of metallurgical coal to global steelmakers, has also ridden resilient demand. It gained nearly 56% year-to-date, with analysts highlighting the robust margins and expansion potential of its Blue Creek project.
Even so, the IEA stresses that coal's high-water mark is near. Global demand is forecast to plateau and then decline slightly, resulting in consumption in 2030 being about 3% lower than in 2025 and pushing coal-fired generation below its 2021 output.
Price Watch: Range Global Coal Index ETF (NYSE:COAL) is up 8.32% year-to-date.
Read Next:
Photo by Parilov via Shutterstock
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
