India Monsoon & China Slowdown Flatten Global Coal Demand In 2025: IEA

A latest report from the International Energy Agency (IEA) claimed that the global demand for coal is likely to remain akin to the demand seen in 2024. The global agency said that this could be attributed to the prolonged monsoon period in India and the slower coal power production in China. As per the report, India and China alone accounted for 71% of the global coal consumption. 

As per the report, in India, usually a key driver of global coal growth, an early and strong monsoon reduced electricity demand and boosted hydropower generation. This has led to a rare decline in coal-fired power output, marking only the third year-on-year fall in India’s coal power generation in the past five decades.

"India remains a key driver of global coal demand, although total consumption in 2025 is expected to see a slight y-o-y decline of 1.2%, falling by 16 Mt to 1 297 Mt. This marginal decrease is primarily the result of a 3% drop in coal-fired power generation, driven by increased hydropower output and reduced electricity demand for cooling, alongside the continued expansion of renewable energy capacity," the IEA report said. 

China, the world’s largest coal consumer, is also showing little change. Coal demand in the country is on track to match 2024 levels, helped by strong domestic production and slower growth in coal-fired power generation. Because China uses more coal than the rest of the world combined, even small changes there have an outsized impact on global trends.

Minor Rise Globally 

As a result, global coal demand in 2025 is expected to rise by just 0.5% to around 8.85 billion tonnes, essentially flat compared with last year and close to record levels, the IEA said in its Coal 2025 report.

Elsewhere, coal demand followed a different path. In the United States, coal use is set to rise by about 8% in 2025, reversing years of decline. Higher natural gas prices and slower retirement of coal plants, backed by policy support, helped lift coal-fired generation.

In the European Union, lower output from hydropower and wind increased reliance on coal in the first half of the year. Even so, EU coal demand is still expected to fall in 2025, though by a modest 2%, far less than the sharp declines seen in the previous two years.

Coal Easing Down From 2030

Looking ahead, the IEA expects global coal consumption to level off and begin edging down toward the end of the decade. By 2030, demand is forecast to be about 3% lower than in 2025, with coal-based power generation dropping below 2021 levels.

India is expected to remain the main source of growth, with coal demand projected to rise by around 3% a year through 2030, adding more than 200 million tonnes. Southeast Asia is set to see the fastest growth, while China’s coal use is expected to decline slowly—unless higher electricity demand or slower renewable rollout changes the picture.

Global Coal Production 

On the supply side, global coal production is expected to stay near record levels in 2025 before easing in the years ahead. Coal trade is also under pressure, with global imports forecast to fall after peaking in 2024. Prices have continued to soften this year, reflecting weaker demand and ample supply.

Together, the trends suggest global coal use is no longer growing rapidly, even as it remains deeply embedded in power systems—especially in Asia—during the ongoing energy transition.