Global Coal Investments Surge Amid Energy Demand, Defying Environmental Calls
While environmentalists and governments have been calling for the end of coal as a leading energy producer, the International Energy Agency (IEA) has reported that the rapid growth in electricity demand continues to drive investment in coal, mainly in China and India.
2024 saw global approvals for coal-fired power plants hit their highest level since 2015, with construction of as much as 100 gigawatts of new coal plants commenced in China alone during the year.
The IEA says coal remains the main source of energy in many countries; at the same time, it is the largest source of energy-related emissions—accounting for 45% of the total.
Sustained Strength
A new Horizons report from leading research firm Wood Mackenzie argues that global coal demand could in fact remain stronger for longer, with coal-fired power generation staying dominant through 2030, well beyond current projections.
Wood Mackenzie global head of thermal coal markets, Anthony Knutson, believes that this sustained strength would fundamentally alter the global energy transition timeline.
“We’re talking about delaying the phase-out of the world’s most carbon-intensive fuel source during a critical decade for climate action,” Mr Knutson said.
“While the long-term trajectory towards renewables remains intact, the path is proving far more complex than many anticipated as countries grapple with energy security and affordability concerns.”
Base-Case Decline
Wood Mackenzie’s base-case Energy Transition Outlook projects coal-fired power generation to decline by nearly 70% between 2025 and 2050, driven by decreasing renewable energy costs, advancements in battery storage technology, a resurgence in nuclear energy, and an increase in natural gas capacity.
However, Wood Mackenzie’s latest report has put forth a contrary ‘high coal demand’ case that offers a significantly different perspective, suggesting coal generation could average 32% higher than the base case through 2050.
Under the high coal demand case, output from global coal fleets is optimised to help meet steep and rapid load growth expectations, leading to significantly less renewable and gas energy deployment, as well as 2,100GW less global wind, solar, energy storage, and natural gas capacity between 2025 and 2050.
Without investment in carbon capture and storage, unabated emissions from the coal sector would increase by two billion tonnes compared to the base case scenario.
2024 Export Disruptions
Wet weather and incidents at Australian mines hampered export volumes in the March quarter 2025, which were down 9.7% from the March quarter 2024.
However, according to the latest Resources and Energy Quarterly report from the Department of Industry, Science and Resources (DISR), Australian exports will recover over the remainder of 2025 as these disruptions abate.
The DISR also noted that declining Chinese demand is a potential downside risk for Australian exports, although it believes the diversity of Australia’s target markets somewhat mitigates this risk, forecasting growth in exports to India and Southeast Asia.