Global coal demand will experience a moderate decline

Recently, the International Energy Agency released the "World Energy Outlook 2025", focusing on the coal sector. The report indicates that with the rapid development of renewable energy, liquefied natural gas, and nuclear energy, coal, as a traditional fossil fuel, will face increasing competitive pressure from these energy sources. The global coal demand is expected to increase by 0.5% in 2025, reaching a record high of 8.85 billion tons. Although global coal demand is expected to reach a new high in 2025, it will remain stable in the coming years. Coal for power generation accounts for two-thirds of global coal consumption, and as the installed capacity of renewable energy sources grows rapidly and the nuclear power industry expands steadily, global coal power generation is expected to start declining from 2026. By 2030, global coal demand is expected to decrease by 3% compared to 2025, lower than the level in 2023. It is expected that global coal demand will enter a plateau and show a moderate downward trend before 2030. The International Energy Agency predicts that global coal power generation will drop below the 2021 level by 2030.

The moderate decline in global coal demand has a wide and far-reaching impact on the business sector, involving multiple fields and industries. Firstly, in the energy sector, the decline in coal demand directly leads to a decrease in the profitability of coal enterprises, exposing them to the risks of production cuts or even closures. For example, some small coal mines may go bankrupt due to the inability to withstand market pressure, while large coal enterprises need to maintain competitiveness through technological innovation and cost control. The decline in coal demand provides greater market space for renewable energy enterprises. With the rapid development and cost reduction of clean energy technologies such as solar and wind power, these energy sources are gradually surpassing coal in terms of economic viability and becoming more attractive energy choices. Therefore, renewable energy enterprises are expected to have new development opportunities. Coal demand decline will drive the power industry to transition to clean energy. Coal power generation is expected to start declining from 2026, while the installed capacity of renewable energy and nuclear power will grow rapidly. This will prompt power enterprises to increase investment in clean energy and optimize the energy structure.

Secondly, it has an impact on the international trade environment. The decline in global coal demand leads to a reduction in global coal imports, and major exporters (such as Australia and Indonesia) need to maintain competitiveness through technological upgrades and cost control. For example, increased demand in India may reshape the Asian coal trade pattern, while the decline in import demand in Japan and South Korea will impact Australia's thermal coal exports. To reduce reliance on coal, importing countries may accelerate their energy transition pace and seek diversified energy supplies to ensure security. At the same time, increasingly strict environmental regulations have led to an increase in transportation costs for coal, further compressing the profit margins of transportation enterprises. Moreover, the improvement in efficiency of railways and roads has also posed competition pressure on coal shipping. Although shipping technology advancements have improved efficiency and safety, the overall shrinking demand for transportation has posed challenges to the trade environment.

Thirdly, it has pressure on the transformation of coal enterprises. As the heat of the coal market declines, investors' reliance on coal-related assets decreases, increasing investment risks. Investors need to re-evaluate their investment portfolios and reduce the allocation of coal-related assets. At the same time, the decline in coal demand directly leads to a decrease in the profitability of coal enterprises, exposing them to the risks of production cuts or even closures. Many coal enterprises need to maintain competitiveness through technological innovation and cost control, while exploring paths for transformation to clean energy and efficient energy utilization. The decline of the coal industry also has an impact on the employment situation. A large number of coal workers may face the risk of unemployment, requiring government and enterprises to provide corresponding support and transformation opportunities.

In conclusion, the moderate decline in global coal demand is profoundly reshaping the international business landscape. In the face of this trend, international business entities need to proactively adapt to the market changes, through technological innovation, industrial upgrading, and adjustment of investment strategies, to seize new growth points amid risks, and jointly promote the transformation of the global energy system towards a more sustainable direction.