• Global Coal Demand Hits Record as Renewables Not Ready
  • Europe’s Conundrum as it Continues to Import Coal
  • The World’s Top 5 Coal Consumers

Global coal demand reached record levels in 2023 despite governments pushing for cleaner, more sustainable energy policies. As virtue signaling and hopes for the future meet today’s reality, governments must balance policy with actual necessity. Without cheap energy, history proves that economies will struggle to grow.

Aaron lives in Calgary, Alberta and was recently threatened by the grid shutting down as an Arctic front moved in. Renewables were responsible for less than 1% of energy generation during this period of about a week, proving unreliable in a near winter crisis. About 5-6 years ago, Alberta began decommissioning its coal plants…

Europe and the United States are shutting down coal plants to reduce their reliance on the worst form of energy from the standpoint of greenhouse gas emissions. Meanwhile, countries like China and India continue to use record amounts of coal for their electricity generation.

Europe’s Coal Crisis

The E.U. has been blessed with two abnormally warm winters following Russia’s invasion of Ukraine. According to the U.S. Energy Information Administration, U.S. coal exports to Europe soared 22% between August of 2022 and July of 2023. In a Dry Bulk Market, Hellenic Shipping News article, E.U. The Fifth Largest Importer of Coal, as Flows Up Again During First Quarter of 2023, the below excerpt illuminates Europe’s reliance on coal imports:

According to Banchero Costa,

“…the European Union is now the fifth largest seaborne importer of coal in the world, after China, India, Japan and South Korea. In 2022, the E.U. accounted for 9.8% of global seaborne coal shipments. The E.U.’s seaborne coal imports in the 12 months of 2022 surged by +33.8% y-o-y to 116.5 mln tonnes. This followed an equally strong increase of +30.1% y-o-y in 2021 when the total was 87.1 mln t.”

According to the U.S. Energy Information Administration, the U.S. increased its coal exports by 22% between August 2022 and July 2023, “driven almost exclusively” by European demand.

Before the E.U. banned almost all energy imports from Russia following the war, a full 1/3 of Russia’s coal exports went to Europe.

While imports may increase, usage in Europe and North America is declining as renewables account for more electricity generation each year. What’s more, European countries from Portugal to Belgium and Austria have completely phased out coal production.

Can the E.U. Thrive Economically Without Cheap Energy?

Germany is facing a recession for a second straight year, and rising energy costs are being blamed for its stagnant economy. Alex and Aaron argue that Germany will fail to remain a global manufacturing power without cheap energy.

The World’s Top 5 Consumers of Coal

  1. China is by far the largest consumer of coal for electricity generation in the world. It uses coal to power its vast and rapidly growing economy. The amount of coal consumed for electricity generation fluctuates yearly but is typically in the range of several billion tons annually.
  2. India is the second-largest consumer of coal for electricity generation. The country’s coal consumption has been growing along with its economy, as coal is a primary energy source for its power sector. India’s annual coal consumption for electricity generation is also in the order of hundreds of millions of tons.
  3. The United States, despite its significant shift towards natural gas and renewables in recent years, remains one of the top consumers of coal for electricity generation. However, its coal consumption has been decreasing over the years. The U.S. coal consumption for electricity is hundreds of millions of tons annually.
  4. Although Germany has been working on transitioning away from coal and towards renewable energy sources, it remains a significant coal consumer for electricity generation, especially in Europe. The exact figures fluctuate, but Germany’s coal consumption for power is substantial, although less than the top three.
  5. Japan relies on coal for a substantial portion of its electricity generation, especially after the Fukushima nuclear disaster in 2011 shut down many of its nuclear reactors. Japan’s annual coal consumption for electricity generation is significant, placing it among the top global consumers.

Coal Demand High While Price Eases

So, the top five largest economies are the top five largest coal consumers. In the weeks following Russia’s invasion of Ukraine, the price of coal per kilogram soared from $139 in January 2022 to over $400 in March 2022. After trading between $400 and $250 for about a year, the price has come down to about $113 per kilo but remains in high demand worldwide.