Global coal consumption is set to rise to an all-time high in 2022 and is expected to remain at similar levels in the next few years if more vigorous efforts are not made to move to a low-carbon economy, according to a report from the International Energy Exchange (IEA).

IEA in its annual market report said that global coal use is set to rise by 1.2 per cent in 2022, surpassing 8 billion tonnes in a single year and eclipsing the previous high set in 2013. According to IEA, the largest increase in coal demand this year is expected in India (+7 per cent), followed by the European Union (+6 per cent) and China (+0.4 per cent).

The report forecasts that global coal consumption will remain flat at this level through 2025 as a decline in demand from mature markets will be offset by robust demand in emerging Asian economies. IEA said that higher natural gas prices amid the global energy crisis have led to increased reliance on coal for generating power, but slowing economic growth has simultaneously reduced electricity demand and industrial output.

IEA said that the world’s three largest coal producers — China, India and Indonesia — will all hit production records in 2022. However, the report said that despite the high prices and comfortable margins for coal producers, there is no sign of surging investment in export-driven coal projects.

“The world is close to a peak in fossil fuel use with coal set to be the first to decline, but we are not there yet,” said Keisuke Sadamori, IDEA’s director of energy markets and security. “Coal demand is stubborn and will likely reach an all time high this year, pushing up global emissions. At the same time, there are many signs that today’s crisis is accelerating the deployment of renewable resources and this will moderate coal demand in the coming years.

Government policies will be key to ensuring a secure path,” said Sadamori. India demand In India, coal-fired electricity generation accounts for nearly 73 per cent of the overall power needs with such plants making up 50 per cent of the overall installed capacity of404 GW which is connected to the grids, with another 25 GW under construction. “We expect coal demand to rise to 1,220 mt in 2025, with a share of 8 per cent for metallurgical coal and 92 per cent for thermal coal,” the IEA report said.