BAKU, Azerbaijan, January 7. The largest increase in coal demand is expected in India, the EU, and China in 2022, Trend reports via the IEA's latest update on the coal market.
Thus, according to the Agency's outlook, India's demand growth is expected at 70 Mt, or 7 percent, year-on-year, while the EU's and the China's growth are forecast at 29 Mt (6 percent) and 18 Mt (0.4 percent), respectively.
As the report noted, the increase is mainly led by stronger power sector use.
"Still, while coal-fired power generation in China and India is rising to keep pace with stronger demand, some European countries have been temporarily switching to coal due to record-high prices for natural gas, low hydropower generation, and maintenance-related closures at nuclear plants," the IEA noted.
Meanwhile, a significant decline in coal consumption has been observed in the US ( down by 6 percent, or 31 Mt), where the shift from coal to gas is continuing and coal producers are struggling after years of under-investment.
"For 2022, we expect coal consumption to rise by 3.8 percent in Southeast Asia, largely driven by strong growth in Indonesia. From 2022 to 2025, we expect coal consumption to grow by approximately 4 percent per year on average, pushing total consumption to 422 Mt," the report said.
South Africa accounts for about 88 percent of Africa’s coal consumption and was the cause of the decline in demand on the continent from 2020 to 2022. In 2022, coal consumption in South Africa is expected to fall from 166 Mt to 157 Mt ( down by 5.5), partly reflecting the country’s slow recovery from the pandemic shock.
In general, "global demand growth for coal is expected to slow markedly in 2022, rising by just 1.2 percent but still reaching a new record of 8,025 Mt, slightly above the 2013 level (7,997 Mt). The lower growth largely reflects the weaker global economy, with GDP forecast to average 3.2 percent in 2022 as it struggles with the energy crisis, rising inflation and strained supply chain disruptions," the report added.
At the same time, global demand for coal will remain at around 2022 level of 8 billion tons until 2025, the IEA forecasts.