According to the International Energy Agency (IEA), China is important for global coal markets with one of every three tonnes of coal consumed worldwide burned at a power plant in the country.

This year, Beijing continued to diversify its power sector, advance the construction of nuclear plants and accelerate its expansion of solar and wind capacity. This should help limit increases in coal consumption through 2027, according to the report.

“The rapid deployment of clean energy technologies is reshaping the global electricity sector, which accounts for two-thirds of the world’s coal use. As a result, our models show global demand for coal plateauing through 2027 even as electricity consumption rises sharply,” said IEA Director of Energy Markets and Security Keisuke Sadamori.

“However, weather factors – particularly in China, the world’s largest coal consumer – will have a major impact on short-term trends for coal demand. The speed at which electricity demand grows will also be very important over the medium term,” he added.

IEA said coal demand in most advanced economies has peaked and is projected to steadily decline through 2027. This will be influenced by strong policies, such as those implemented in the EU, and the availability of alternative energy sources, including abundant natural gas in North America.

Meanwhile, coal demand continues to rise in some emerging economies, notably India, Indonesia, and Vietnam, amidst rapid economic growth, population increases, and surging electricity demand. Whilst the power sector is the primary driver, industrial coal consumption is also increasing, the report said.