Global Coal Demand Growth Halves This Decade as Structural Shift Accelerates: IEA Data Analysis

The latest International Energy Agency (IEA) Coal Market Report 2025 reinforces what long-term data trends now clearly indicate: global coal demand growth has slowed sharply and entered a structural transition phase rather than a temporary cyclical slowdown.

While the IEA defines mid-term trends over a three-year horizon, such a timeframe often fails to capture deeper structural changes—especially in an era marked by energy transition, policy shifts, and geopolitical volatility. To overcome this limitation, a 20-year analysis of IEA coal demand data (2005–2024) was undertaken to assess how global coal consumption growth has evolved over two distinct decades.

The findings point to a decisive conclusion: global coal demand growth has declined by more than 50% over the past decade, with both thermal and metallurgical coal showing strong signs of plateauing—and potentially peaking.

CAGR Analysis: Measuring the Structural Slowdown

To compare coal demand growth across long-term periods, the Compound Annual Growth Rate (CAGR) was used as the primary metric. CAGR is widely regarded as the most appropriate measure for evaluating average annual growth over extended timeframes, as it uses the geometric mean of annual growth and allows for meaningful comparisons between periods.

In this analysis, CAGR was calculated for two ten-year periods:

• 2005–2014
• 2015–2024

CAGR Comparison

• CAGR (2005–2014): 2.81%
• CAGR (2015–2024): 1.31%

This represents a decline of over 53% in global coal demand growth rate between the two decades.

• First Decade vs Second Decade: Growth Momentum Halved

The area graph based on IEA data highlights a clear divergence between the two periods:

2005–2014:
Global coal demand increased from just over 6 billion tonnes to nearly 8 billion tonnes, adding close to 2 billion tonnes over the decade. This period was characterised by strong, relatively stable growth, driven largely by China’s rapid industrialisation and expansion of coal-based power and steel capacity.

2015–2024:
The second decade marks a visible slowdown, increased volatility, and significantly weaker growth momentum. Coal demand rose from just under 8 billion tonnes in 2015 to around 9 billion tonnes in 2024—an increase of only ~1 billion tonnes over ten years.

Despite identical timeframes, absolute demand growth halved, mirroring the sharp drop observed in CAGR.

Rising Volatility Hidden by Average Growth Rates

While CAGR provides a clean long-term comparison, it masks year-on-year volatility, which has increased materially in the post-2014 period.

Over the past 20 years, global coal demand slowed or declined in seven separate years:

• First decade (2005–2014): 2 declines (2009, 2014)
• Second decade (2015–2024): 4 declines (2015, 2016, 2019, 2020)

The higher frequency of demand contractions in the second decade underscores growing structural stress in coal markets, reflecting the combined impact of renewable energy deployment, policy interventions, economic slowdowns, and efficiency gains.

China at the Core of the Structural Shift

China remains the single most influential factor in global coal demand dynamics, accounting for nearly half of total global coal consumption. As a result, any slowdown in China’s coal demand growth has immediate global consequences.

Thermal Coal: Renewables Erode Demand Growth

China’s rapid and sustained addition of renewable energy capacity—at record levels year after year—is steadily displacing coal-fired power generation. As renewable capacity additions increasingly outpace electricity demand growth, coal-based thermal power generation is expected to decline structurally, bringing China’s thermal coal demand to a plateau and exerting downward pressure on global demand.

Metallurgical Coal: Steel Sector Transformation

The structural shift is even more pronounced in metallurgical coal:

In 2024, China halted approvals for new blast furnaces dependent on coking coal.

Policy emphasis has shifted toward expanding electric arc furnaces (EAFs), which rely on scrap steel and electricity rather than metallurgical coal.

As China accelerates the restructuring of its heavy industry—particularly steel—growth in metallurgical coal demand has effectively ended.

The pace at which China completes this transition will now determine whether global metallurgical coal demand merely plateaus or enters a faster structural decline.

Global Coal Trade: A Red Flag for Investors

The IEA Coal Market Report 2025 notes that global coal trade is set to decline for the first time since the COVID-19 pandemic. Should trade volumes fall again in 2026, the IEA has termed such an outcome as “unprecedented.”

This development has far-reaching implications for:

• New coal mine investments
• Capacity expansions
• Long-term project viability and asset valuations

For investors, the message from long-term data is unambiguous: coal demand growth can no longer be assumed as a baseline scenario.

Conclusion: Plateau Today, Peak Tomorrow

The combined evidence from:

• a 53% fall in CAGR,
• halving of absolute demand growth, and
• increased volatility in the second decade,

confirms that global coal demand has transitioned from a high-growth expansion phase to a low-growth, unstable plateau.

This is not a short-term correction but a structural shift driven primarily by China’s energy transition, renewable energy scale-up, and industrial decarbonisation.

For governments, coal PSUs, miners, and investors, the implications are profound: the era of coal-led growth is decisively fading, and strategic planning must adjust accordingly

The writer of this article is Dr. Seema Javed, an environmentalist & a communications professional in the field of climate and energy