Renewable energy surge brings down goal demand growth rate by 50%, finds IEA analysis

There is a 50% decline in global coal demand growth rate in last 20 years and rapid growth in renewable energy capacity in China shows signs of global coal demand flattening, according to analysis based on IEA data.

The analysis shows that growth in coal demand has been steadily growing in India and ASEAN countries, though that growth has been offset by the decline in coal demand in the EU and US. Coal demand trends in the rest of the world have largely remained flat.

"When China’s coal demand stops growing, the world’s coal market stops growing with it. The latest IEA data suggests this is not a cyclical pause, but a structural shift – driven by record renewable build-out and fundamental changes in heavy industry. For global coal markets, the era of growth is ending, and investors should take note," said Christine Shearer, Director of the Coal Program, Global Energy Monitor (GEM).

According to a study by the Centre for Research on Energy and Clean Air, meeting 2030 non-fossil energy targets in India, Indonesia, and China would be enough to plateau global coal demand. By maintaining current build rates in China through to 2035, global coal demand could start to decline.

“Global coal demand is set to increase slightly by 0.5% this year, indicating global demand has reached a plateau. China, responsible for more than 50% of global coal demand, has seen significantly less than average annual growth rate in demand,” according to analysis.

Madhura Joshi, Programme Lead, Global Clean Power Diplomacy, E3G, says India has made remarkable progress on renewables, with 2025 slated to be a record-breaking year.

“Coupled with the decline in coal demand, this augurs positive signs for the country’s energy transition. Continuing this trajectory of renewables and storage expansion can help India ensure affordable clean energy for its multiple objectives of development, growth, security, and climate,” she said.

It further says that the demand for metallurgical coal seems to have flattened, indicating that global metallurgical coal has reached a plateau and a peak is around the corner, if not already peaked. Signs of structural decline observed, with the commodity declining through to 2030.