Global coal demand growth stalling

December 20, 2025

Global demand for coal — long the largest source of energy for electricity and industrial processes — appears to be reaching a turning point as growth slows and consumption patterns begin to shift, driven especially by China’s rapid expansion of clean energy, analysts say.

According to energy experts, annual global coal use has stabilised at around 8.8–9 billion tonnes, with growth effectively stalling as China — which accounts for nearly half of all coal consumption worldwide — sees domestic demand flatten and even decline. Record additions of renewable power in China are displacing coal in electricity generation and signalling a structural change in global energy markets.

Coal use has been structurally declining in advanced economies such as the United States and the European Union for decades. The recent stagnation in coal demand growth reflects not just slower uptake in those regions, but also major shifts in coal-intensive sectors in emerging markets. In China, clean power expansion is increasingly reducing the share of coal in the electricity mix, even as total power use continues to rise. This disruption in what was traditionally the largest engine of coal growth is having ripple effects on global markets and investors.

Metallurgical coal — used primarily in steelmaking — is also seeing declines for a second consecutive year as industry trends move towards lower-carbon production methods. The downturn in this key segment suggests broader structural change beyond power generation alone.

Because China’s coal consumption has such an outsized influence, its shift has struck a critical blow to global demand growth. “When China’s coal demand stops growing, the world’s coal market stops growing with it,” said energy analysts, pointing to projections showing that continued renewable deployment could push global coal demand into outright decline. The stalling trend is reshaping the outlook for coal exporters from Australia, Indonesia, Russia, Canada and beyond, as markets become more volatile and long-term demand prospects weaken. At the same time, faster clean energy deployment is improving energy security and cutting emissions in key economies, reinforcing the global transition away from fossil fuels. Despite this structural shift, coal remains a major part of the energy mix in many regions. Emerging economies such as India continue to record strong coal consumption due to rising electricity and industrial demand. Global coal demand is projected to plateau through the latter half of the decade and, depending on the pace of renewable growth, could begin to decline more noticeably by 2030