Context:
The International Energy Agency (IEA) projects a substantial decline in global coal demand by 2026, attributing this shift to the expansion of renewable energy and increased nuclear generation in key regions.
Relevance:
GS III: Energy
Dimensions of the Article:
- Key Highlights of the Coal Market Report
- International Energy Agency (IEA)
Key Highlights of the Coal Market Report
Global Coal Demand Trends:
- Record-high global coal demand in 2022, rising by 4% to 8.42 billion tonnes (Bt).
- Asia, led by China, India, and Indonesia, remains the primary driver of demand growth.
- Notable demand declines in the United States, with Europe showing restrained growth.
Anticipated Decline in Coal Demand:
- Expected decline in most advanced economies’ coal demand in 2023.
- Global coal consumption projected to be 2.3% lower in 2026 than in 2023.
- China, India, and Indonesia expected to break coal output records in 2023.
Factors Influencing Decline:
- Shift towards renewable energy contributing to the decline in coal demand.
- Changes in global climate affecting hydropower output.
- Significant growth in low-cost solar photovoltaic deployment.
- Moderate increases in nuclear generation in China, India, and the European Union.
Regional Outlook:
- China’s coal consumption expected to fall in 2024, with increased reliance on renewables.
- Uncertainty in China’s economic growth and coal use due to structural changes.
- India, Indonesia, and emerging economies likely to continue relying on coal for economic growth.
Climate Targets and Coal Use:
- Efforts to reduce unabated coal use crucial for meeting international climate targets.
- Goal of nearly 95% reduction in coal emissions between 2020-2050, aligning with COP28 commitments.
Coal Prices and Industry Dynamics:
- Unexpected surge in coal prices impacting consumers and industry.
- Mining companies maintaining strong profit margins despite rising costs.
- Diversified mining firms strategically reinvesting coal profits in anticipation of energy transition demand.
International Energy Agency (IEA)
Formation and Headquarters:
- Established in 1974 as an autonomous agency by OECD member countries.
- Headquarters located in Paris, France.
- Responded to the mid-1970s oil crisis.
Main Focus:
- Primarily focuses on energy policies, addressing economic development, energy security, and environmental protection.
Role in the Oil Market:
- Plays a crucial role in providing information on the international oil market.
- Takes action against physical disruptions in the supply of oil.
Membership:
- 31 member countries and 13 association countries, including India.
- Candidate countries must be OECD member countries.
Major Reports:
- World Energy Outlook.
- World Energy Investment Report.
- India Energy Outlook Report.
-Source: The Hindu
