BAKU, Azerbaijan, October 19. Global demand for
coal in 2026 will remain at the previous year’s level, totaling
approximately 8.8 billion metric tons.


According to the report “Energy Transition Outlook 2026” by the
international expert organization DNV, a steady decline is expected
in the future amid expanding electrification and the use of
renewable energy sources.


The report notes that coal demand in 2026 turned out to be
higher than expected because the crisis stemming from the conflict
surrounding Iran temporarily removed about one-fifth of liquefied
natural gas (LNG) supplies to Asia from the market for several
months. It is noted that, in response, power companies in China,
India, Japan, and South Korea increased their use of coal, which
helped maintain global demand at the previous year’s level.


At the same time, DNV expects this situation not to persist in
the long term. According to the forecast, global coal production
will decline from approximately 9 billion metric tons in 2026 to 7
billion metric tons in 2030 and 1.3 billion metric tons by
2060.


“In 2026, electricity generation accounted for 69% of global
coal demand, while the manufacturing sector accounted for 25%.
Going forward, the share of the electricity sector will decline. By
2060, it will account for 40% of a significantly reduced global
coal market.


At the same time, the relative importance of the manufacturing
sector will increase, as steel and cement production remains
difficult to electrify.


China will retain its position as the world’s largest consumer
of coal. In 2026, domestic demand will total 100 EJ, or 58% of the
global total. By 2040, it will nearly halve, falling to 55 EJ, and
by 2060, it will drop to 12 EJ—86% less than the 2026 level.


The main factor will be the continued replacement of coal with
renewable energy sources in the power sector. Despite the decline
in consumption, China will account for 40% of global coal demand in
2060.


India will be the only region where coal demand will first
increase and then begin to decline. It will rise from 24 EJ in 2026
to approximately 30 EJ in 2032 due to further expansion of industry
and the power sector. By 2040, the figure will fall to 21 EJ, and
by 2060, to 5 EJ," reports DNV.







According to the report, the bulk of the subsequent reduction in
India will come from the electricity sector: from 2040 through
2060, coal consumption in this sector will decrease by 88%. The
decline in demand from the manufacturing sector will be more
gradual.


In Southeast Asia, coal demand will remain virtually unchanged
until the mid-2030s, after which it will decline to 3 EJ by 2060,
or roughly one-third of current levels. At the same time, the
region’s share of global demand will increase from 6% to 12%, as
consumption in other regions will decline more rapidly.


In the rest of the world, coal demand will fall from 37 EJ in
2026 to 18 EJ by 2040 and 9 EJ by 2060. The main factor will be the
continued phase-out of coal in the power sector outside of Asia,
according to DNV.


According to the report, about 10% of the world’s coal volume is
traded internationally: “This is significantly less than the share
of oil and gas traded on the international market. Therefore, coal
production is primarily determined by regional demand.”


"In 2026, global coal production will total about 9 billion
metric tons, including 8 billion metric tons of hard coal and 1
billion metric tons of lignite. China and India will maintain
domestic production near current levels for longer than previously
anticipated. In the long term, coal production will decline
significantly in all regions. The largest absolute decline is
expected in China, while India’s share of declining global
production will increase.


The conflict surrounding Iran has also affected international
coal trade. Rising natural gas prices have stimulated demand for
bituminous coal in some Asian countries and temporarily contributed
to higher coal prices. This impact will diminish due to the
relatively small share of coal in international trade. Starting in
2026, global coal trade volumes will continue to decline as major
exporters prioritize meeting domestic demand and ensuring energy
security.


International coal trade volumes will decline by approximately
70% between 2026 and 2035 and by approximately 90% by 2060 amid
falling demand in all regions of the world,” the report states.