Coal demand to rise steadily, agency says

Global coal demand will rise 2.6 per cent annually in the next six years and challenge oil as the top energy source, according to the International Energy Agency.

Coal consumption will climb to 4.32 billion tons of oil equivalent by 2017, compared with about 4.4 billion for oil, the Parisbased agency said Tuesday in its first Medium-Term Coal Market Report.

Usage will rise in all regions except the U.S., where cheap natural gas has damped demand, the IEA said.

Demand for coal rose 4.3 per cent last year, with China accounting for 67 per cent of the increase to replace Japan as the largest importer of the fuel, according to the report. Coal is the most polluting fossil fuel and without limits by climate change policies, demand and emissions of carbon dioxide will continue to rise, the IEA said.

“Thanks to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in global energy demand during the first decade of the 21st Century,” IEA Executive Director Maria van der Hoeven said. “Coal’s share of the global energy mix continues to grow each year, and if no changes are made to current policies, coal will catch oil within a decade.”

Countries outside the 34-nation Organization for Economic Cooperation and Development are expected to drive growth with an annual increase of 3.9 per cent.

Within the OECD, coal use will drop by 0.7 per cent a year as U.S. demand falls 2.5 per cent a year to 600 million tonnes in 2017, the IEA said. Total world consumption that year will be 6.17 billion tonnes, up from 5.28 billion last year.

Global demand continues to be driven by Asian economies.

India will increase its influence in coal markets thanks to large reserves, a population of more than one billion, electricity shortages and a projected increase in energy consumption, the IEA said.

The country’s demand is expected to rise 6.3 per cent a year to 643 million tonnes in 2017, the agency said.