Imagine this: after decades of warnings about climate change, billions spent on green tech, and endless promises to phase out the dirtiest fossil fuel, the world is burning more coal than ever before. It’s 2025, and global coal consumption has just smashed its previous record. Kind of makes you wonder if all those bold predictions about a quick transition were a bit premature, doesn’t it?
I’ve always found energy markets fascinating because they don’t lie. Politics can spin stories, activists can march, but at the end of the day, the numbers show what the world actually needs to keep the lights on. And right now, those numbers are telling us that coal isn’t going anywhere anytime soon.
The Record-Breaking Reality of Coal in 2025
Let’s start with the headline figure that’s turning heads across the energy world. This year, global demand for coal climbed to a new all-time high—around 8.85 billion tonnes. That’s half a percent more than last year, and yes, previous estimates have been revised upward too. It’s not a massive jump, but it’s significant because it defies the narrative we’ve heard for years.
In my view, this isn’t just a blip. It’s a symptom of deeper structural realities in how the world produces and consumes energy. Renewables are growing fast—no one sane disputes that—but they’re not yet replacing baseload sources at the scale needed. Coal fills that gap, especially when demand surges.
What the Latest Forecasts Actually Say
Many experts now suggest 2025 could mark the peak for coal demand. They project a gradual decline over the next five years, bringing consumption down roughly 3% by 2030. But here’s the thing: we’ve heard peak forecasts before, and they’ve often proven wrong.
Even if the decline happens, levels would still sit above anything seen before the early 2020s. That’s hardly the dramatic collapse some expected. Instead, coal seems to be shifting roles rather than disappearing.
Coal is moving from pure baseload provider to a flexibility and backup resource as intermittent renewables take larger shares of generation.
Think about it. Wind and solar are fantastic when conditions are right, but grids need reliable power 24/7. Coal plants can ramp up or down relatively quickly, making them ideal partners for variable sources. It’s not romantic, but it’s practical.
The Dominant Player: China’s Coal Story
No discussion of global coal makes sense without focusing on China. Quite simply, the country consumes more coal than the rest of the world combined. Its trends dictate everything.
Demand there has stayed broadly flat recently, even as massive renewable capacity comes online. Why? Because electricity needs are exploding—think manufacturing, urbanization, electrification. Coal provides the steady backbone while solar and wind handle daytime peaks.
Interestingly, some non-power uses are actually growing. Coal-to-chemicals production and gasification processes are offsetting declines in traditional sectors like steel and cement. In fact, these could create upside surprises to current forecasts.
- Rapid renewable expansion reduces coal’s share of electricity generation
- Absolute demand remains high for grid stability
- Industrial applications provide new growth avenues
- Overall trajectory: slight decline possible, but no sharp drop
Perhaps the most interesting aspect is how China illustrates the limits of substitution. You can build all the solar panels you want, but if total power demand rises faster than renewables plus other sources, something has to fill the gap. Right now, that something is often coal.
Growth Engines: India and Southeast Asia
While advanced economies cut back, emerging markets are driving net growth. India stands out as the biggest source of additional demand through the end of the decade.
Electricity consumption is soaring alongside economic expansion. Add in rising needs for cement, steel, and other heavy industries, and you get sustained coal requirements. Many processes there still rely heavily on coal, and alternatives aren’t scaling fast enough.
Southeast Asia follows a similar pattern, though at an even faster growth rate. New power plants, metals processing, and general industrialization all point to higher consumption. Together, these regions largely offset reductions elsewhere.
It’s a classic development story. Countries lifting millions out of poverty need affordable, reliable energy. Coal checks both boxes better than most alternatives right now. Criticizing that from afar feels a bit disconnected from reality, if you ask me.
Advanced Economies: Decline, But Not Collapse
In Europe and the United States, the long-term trend is clearly downward. Plants are retiring, policies push decarbonization, and natural gas plus renewables eat into market share.
But short-term fluctuations remain. Europe has seen coal burn swing wildly based on gas prices, weather patterns, and supply concerns. Political commitments to phase-outs come with delays and exceptions—reality intrudes on ideology.
The U.S. picture is particularly intriguing. Analysts recently slashed expected coal retirements through 2030 from around 66 gigawatts down to just 40. Why the change?
- Rising natural gas prices in the near term
- Weather-driven demand spikes
- Growing electricity needs from data centers and electrification
- Policy support for keeping certain plants online
- Need for reliability as intermittent sources grow
I’ve found that markets often move slower than headlines suggest. Coal plants built decades ago are paid off, operate cheaply, and provide dispatchable power. In a world of tightening supply-demand balances, keeping them around makes economic sense.
The Bigger Picture: Surging Power Demand
One factor rarely gets enough attention: total electricity demand is exploding globally. AI data centers, electric vehicles, heat pumps, industrial re-shoring—all these trends require massive amounts of new power.
Data centers alone could add demand equivalent to entire countries in coming years. And they need constant, reliable supply. Intermittent renewables help, but building enough storage or alternative baseload takes time.
Nuclear power offers a clean, reliable solution, but new plants take a decade or more to construct. We’re looking at a 2030s story for meaningful impact in most places. Until then, existing coal capacity serves as a bridge.
It’s almost ironic. The same technological revolution driving climate concerns—AI, electrification—is also prolonging coal’s life by boosting demand faster than clean alternatives can fully replace it.
Why Substitution Is Harder Than It Looks
Outside electricity generation, coal’s role declines slowly for good reasons. Heavy industry—steel, cement, chemicals—relies on specific properties of coal or coke that alternatives struggle to match at scale and cost.
Green steel via hydrogen? Promising, but years from commercial dominance. Carbon capture on coal plants? Technically feasible, but expensive and limited deployment so far. These solutions will come, but timing matters.
Meanwhile, developing nations prioritize growth and affordability. Coal delivers on both. Forcing a rapid switch risks economic harm without proportional climate benefits, given where emissions growth actually occurs.
Looking Ahead: What Might Change the Trajectory
Could something accelerate coal’s decline? Sure. Faster nuclear deployment, breakthrough storage technologies, or sharper economic slowdowns in key markets. Policy shifts matter too—subsidies, carbon pricing, trade measures.
But betting against coal has burned forecasters before. Demand has proven resilient through multiple supposed peaks. The safest assumption might be gradual evolution rather than sudden revolution.
In my experience following energy trends, the world rarely follows straight lines. Transitions stretch longer than optimists hope and pessimists fear. Coal’s story seems to fit that pattern perfectly.
At the end of the day, energy policy succeeds when it aligns with physical and economic realities. Demonizing one source rarely works if alternatives aren’t ready. Perhaps the record demand in 2025 is simply reminding us of that basic truth.
So where does this leave us? With a more nuanced view of the energy transition, I think. Renewables will keep growing impressively. Efficiency will improve. But coal retains a stubborn role for longer than many expected—providing reliability, affordability, and industrial feedstock in a world that still needs all three.
The chart showing 2025’s record might frustrate idealists, but it informs realists. And in energy markets, being realistic is what keeps the grid running.
