Global coal demand has stalled at around 9 billion tonnes a year.
China, which consumes nearly half the world’s coal, has seen demand flatten.
Record renewable energy additions are displacing coal in power generation.
Metallurgical coal use has fallen as steelmaking shifts to lower-carbon routes.
Exporters and investors face rising risks as markets turn more volatile.
Global coal demand at about 8.8–9 billion tonnes a year is approaching a turning point as growth stalls worldwide and China, which accounts for nearly half of global thermal and metallurgical coal consumption, flattens its demand through record renewable energy additions.
While coal use has been structurally declining in the United States (US) and European Union (EU) for two decades, China’s clean power surge is now decisive, according to analysts. Continued renewable deployment at current levels will likely push global coal demand into decline.
The slowdown is no longer limited to power generation. Global metallurgical coal demand has fallen for a second consecutive year, signalling that steelmaking, responsible for the bulk of met coal use, is undergoing a structural shift. In China, a pivot toward low-carbon steelmaking routes and a halt in new blast furnace construction indicate demand has reached a plateau. With China consuming around 50 per cent of the world’s coal, the consequences for exporters from Australia and Indonesia to Mongolia, Russia, Canada and the US are increasingly stark.
“When China’s coal demand stops growing, the world’s coal market stops growing with it,” said Christine Shearer, director of the coal program at Global Energy Monitor. “The latest International Energy Agency (IEA) report Coal 2025 suggests this is not a cyclical pause, but a structural shift—driven by record renewable build-out and fundamental changes in heavy industry. For global coal markets, the era of growth is coming to a close, and investors should take note.”
The central question now, analysts argue, is whether coal can find another growth engine on the scale of China. “That looks increasingly unlikely,” said Putra Adhiguna, managing director of the Energy Shift Institute. Demand is fragmenting across multiple markets, while financing is tightening as the energy transition accelerates. “Coal’s competitors are also moving fast. Clean energy is advancing on cost, energy security, and climate—all at once,” he said.
China’s data explain why global dynamics are shifting. Coal-fired power generation has been falling for more than 18 months, even as electricity demand continues to grow rapidly, according to Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air (CREA). Crude steel production has been declining for over four years, the longest downturn on record. “It’s the first time that demand for coal-fired power is falling even as power demand grows rapidly,” he said, noting that power and steel were previously the dominant drivers of global coal growth.
As China’s demand flattens, exporters are feeling the strain. In Australia, risks are mounting for producers and investors exposed to a shrinking market. “The risks facing Australian coal exporters and their investors are substantial and will only grow as the renewable energy transition accelerates,” said Brett Morgan, head of Australian campaigns at Market Forces.
In Indonesia, the world’s largest thermal coal exporter, exports are already declining. Binbin Mariana, Asia energy finance campaigner at Market Forces, said domestic coal power has become increasingly unviable, with generation costs up nearly 50 per cent over the past four years and global capital retreating as banks adopt coal-exclusion policies. Any continued investment, she said, “is a bet against the inevitable energy transition.”
Financial shifts in Japan show how policy can accelerate change. “Japan’s megabanks, once among the world’s largest coal backers, prove that clear financial policies can make a difference,” said Eri Watanabe, Japan energy finance campaigner at Market Forces, urging banks to extend exclusions beyond new coal plants to mining, infrastructure and metallurgical coal.
From a diplomacy and policy perspective, the moment is approaching a tipping point. Matthew Webb, associate director at E3G’s global clean power diplomacy, said the IEA’s latest outlook shows the world nearing “a global tipping point in the shift away from coal power,” a decade after the Paris Agreement. He pointed to the COP30 Presidency-led process on transitioning away from fossil fuels as a chance to lock in the decline of coal and avoid stranded assets.
China’s next moves will remain decisive. “Home to both the world’s largest coal fleet and the greatest solar and wind capacity, trends in China drive trends worldwide,” said Julia Nolan, senior associate at E3G, adding that the country’s upcoming five-year plan is an opportunity to plan a phase-down of unabated coal power.
India –– one of the traditional engines of coal demand growth, meanwhile, presents a parallel but distinct signal. The IEA report says in the country, an early and strong monsoon season depressed electricity demand and boosted hydropower output. As a result, the country’s annual coal power generation is set to decline year-on-year for only the third time in the past five decades.
According to Madhura Joshi, programme lead at E3G, the country’s rapid renewable expansion — 2025 is set to be a record year — combined with signs of slowing coal demand, points to a more balanced transition pathway. “Continuing this trajectory of renewables and storage expansion can help India ensure affordable clean energy for development, growth, security and climate,” she said.
Together, the numbers point to a clear shift: with nearly half of global coal demand concentrated in a single country now flattening, the long era of coal-driven global growth is drawing to a close, forcing exporters and investors to reckon with a smaller, more volatile market.