Climate & Environment
IEA forecasts record 8.94 billion tonnes of coal demand
The revised outlook reverses an earlier forecast for a slight decline, with the path for 2027 hinging on LNG flows and energy prices.
Executive summary
- The forecast: The International Energy Agency expects global coal demand to rise 1.2% in 2026 to a record 8.94 billion tonnes.[1][2][3]
- The revision: The new estimate reverses the IEA's previous expectation that coal use would decline slightly this year.[1][2][3]
- The pressure: The agency says disrupted LNG shipments through the Strait of Hormuz have raised gas prices and encouraged more coal-fired power generation in several markets.[1][2][3]
- The uncertainty: The outlook for 2027 depends heavily on how quickly LNG trade through Hormuz and global gas markets normalize.[1][2]
Global coal demand is on course to rise 1.2% in 2026 to a record 8.94 billion tonnes, the International Energy Agency forecast Thursday. Reuters and Axios independently reported the agency's revised estimate.[1][2][3]
The projection marks a sharp turn from the IEA's earlier expectation that worldwide coal use would decline slightly this year. It is a forecast rather than a final consumption figure and may change as trade flows, weather and fuel prices evolve.[1][2][3]
The agency linked much of the revision to the Middle East conflict, which has curtailed liquefied-natural-gas shipments through the Strait of Hormuz and pushed gas prices higher. That has made coal more competitive for electricity generation in parts of Europe and Asia, including Japan, South Korea and China.[1][2][3]
The IEA also pointed to greater coal use by China's chemicals industry as high oil prices change feedstock economics. In India and Vietnam, a strong El Niño is expected to increase cooling demand while weighing on hydropower output, adding to coal-fired generation needs.[1][2][3]
Despite record demand, the agency expects global coal production to decline in 2026 while remaining above 9 billion tonnes for a third consecutive year. Demand and production are separate measures, and inventories and trade can cause them to move differently over shorter periods.[1][2]
The 2027 path is unusually uncertain. The IEA said a restoration of LNG traffic through Hormuz could ease gas prices and coal demand, while a prolonged disruption would keep the pressure in place. That makes the forecast conditional on both geopolitics and weather rather than a settled long-term shift.[1][2]