BAKU, Azerbaijan, November 2. Global coal demand is expected to decrease by an average of 1 percent annually - from almost 75 million barrels of oil equivalent per day (mboe/d) in 2021 to around 58 mboe/d in 2045, Trend reports via the latest World Oil Outlook (WOO) from OPEC.
According to the report, amid soaring gas prices and a possible shortage of gas supplies, many European countries are increasingly returning to coal-based electricity generation. However, as the energy market situation stabilizes in the medium term, long-term energy and climate objectives will get more attention.
Major consumer Governments seem committed to their medium- and long-term goals related to coal consumption, continuing to support emission reductions and decommissioning of coal-fired power plants in favor of less carbon-intensive alternatives. The Parties to COP26, including China and India, agreed to accelerate their efforts to phase out relentless coal power in November 2021. In early 2022, the G7 countries also committed to significantly reducing the use of coal and other fossil fuels in electricity generation. This is the main reason for the expected significant decline in coal demand in the long term, OPEC said.
Thus, all OECD regions show significant reductions in coal demand with an average annual decline rate of 3.3 percent per year.
Meanwhile, China is expected to show the largest decline of 35 percent in coal demand with a drop from more than 40 mboe/d in 2021 to almost 26 mboe/d in 2045.
“Coal-fired generation should be gradually phased-out after 2026, according to official statements, which is in line with a target to reach a carbon emission peak by 2030. The decline in primary fuel demand is also attributed to more efficient units, which are likely to replace older plants and thus reduce transformation losses. Furthermore, the strong expansion of renewables, gas and nuclear will substitute for coal-fired generation in the long-term,” WOO noted.
At the same time, to compare, India’s coal demand is set to grow from around 8 mboe/d in 2021 to just above 13 mboe/d in 2040, after which it is expected to be steady.
“The slowdown is the result of the increasing substitution of coal by other fuels, such as nuclear, gas and renewables. However, while India made a commitment to phase-down coal at COP26, the government has highlighted prioritizing its multiple develop- mental goals of energy access, improved livelihoods and poverty reduction. This is why new build coal plants are expected to continue alongside the diversification of India’s energy portfolio,” OPEC explained.
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