A new report from the International Energy Agency (IEA), Coal 2025, reveals that India will account for the world’s largest absolute increase in coal consumption over the next five years. While global demand is expected to plateau and begin a gradual decline by 2030, India’s appetite for coal is projected to rise by an average of 3% annually, adding over 200 million tonnes to its current usage.
The “Eastward Shift” in Energy Demand
The IEA highlights a significant structural shift in the global coal market. While advanced economies like the United States and the European Union continue their structural decline in coal use, growth is now concentrated heavily in Asia.
- India’s Rise: Projected to add 225 million tonnes by 2030, driven by industrial expansion and a growing steel sector.
- Southeast Asia: Forecasted to see the fastest growth rate at over 4% per year, led by Indonesia and Vietnam.
- China’s Peak: Currently responsible for over half of global coal use, China is expected to see demand fall slightly by 2030 as it aggressively deploys renewable energy.
A “Mixed” 2025: Monsoons and Policy Shifts
Interestingly, 2025 saw several uncharacteristic trends that temporarily slowed coal’s momentum:
- Heavy Monsoons in India: An early and intense monsoon season in 2025 led to a rare decline in India’s annual coal use—only the third drop in 50 years—as hydropower output surged and cooling demand fell.
- US Rebound: Conversely, the United States saw a 7-8% increase in coal demand this year, reversing a 15-year downward trend due to higher natural gas prices and policy measures intended to slow coal plant retirements.
India’s Decarbonization Paradox
Despite the projected rise in coal volume, the share of coal in India’s total electricity mix is actually expected to fall from 70% in 2025 to 60% by 2030. This is due to the country’s massive scaling of non-fossil fuel energy.
| Metric | Current Status (Aug 2025) | 2030 Target |
| Total Capacity | 495 GW | ~770-800 GW |
| Non-Fossil Capacity | ~259 GW (52% of total) | 500 GW |
| New Coal Plants | 20 plants (14 GW) added in 2025 | Controlled additions for security |
The Road to 2030
The IEA warns that while global coal demand has reached a plateau, the “era of growth” is ending. However, for emerging economies like India, coal remains a critical “bridge” to ensure energy security and support a fast-growing economy while transitioning toward a 500 GW non-fossil capacity goal.