Coal demand growth to stall as appetite wanes: IEA

New Delhi: Growth in global coal demand will stall over the next five years as the appetite for the fuel wanes and other energy sources gain ground, International Energy Agency said today.

The share of coal in the power generation mix will drop to 36 per cent by 2021, from 41 per cent in 2014, driven by lower demand from China and the US, along with fast growth of renewables and strong focus on energy efficiency, the IEA said in the latest medium-term coal market report.

But in a sign of coal's paradoxical position, the world is still highly dependent on coal. While coal demand dropped in 2015 for the first time this century, the IEA forecasts that demand will not reach 2014 levels again until 2021.

However, such a path would depend greatly on the trajectory of China's demand, which accounts for 50 per cent of global coal demand and almost half of its production, and more than any other country influences global coal prices.

The new report highlights the continuation of a major geographic shift in the global coal market towards Asia. In 2000, about half of coal demand was in Europe and North America, while Asia accounted for less than half.

By 2015, Asia accounted for almost three-quarters of coal demand, while coal consumption in Europe and North America had declined sharply below one quarter. This shift will accelerate in the next years, according to the IEA.

Because it is relatively affordable and widely available, coal remains the world's number one fuel for generating electricity, producing steel and manufacturing cement.

It provides almost 30 per cent of the world's primary energy, and is expected to decline to 27 per cent by 2021. However, it is also responsible for 45 per cent of all energy-related carbon emissions and is a significant contributor to other types of pollution.

"Because of the implications for air quality and carbon emissions, coal has come under fire in recent years, but it is too early to say that this is the end for coal," said Keisuke Sadamori, director of the IEA's energy markets and security directorate, who launched the report in Beijing, China.

"Coal demand is moving to Asia, where emerging economies with growing populations are seeking affordable and secure energy sources to power their economies. This is the contradiction of coal - while it can provide essential new power generation, it can also lock-in large amounts of carbon emissions for decades to come."