Global coal demand is set to rise by 1.4% this year and surpass a record-high level of 8.5 billion tons for the first time, the International Energy Agency (IEA) said on Friday.

While coal demand in the United States and the EU is set for a 20% record decline this year, coal use in emerging economies “remains very strong, increasing by 8% in India and by 5% in China in 2023 due to rising demand for electricity and weak hydropower output,” the IEA said in its Coal 2023 annual report today.

This year marks the second consecutive year of record-high levels of coal demand globally after 2022 was also a record year for coal use.

The agency expects coal use to decline by 2.3% by 2026 compared to this year’s record-high levels, due to projections of major expansion in renewable energy sources over the next three years.

China’s coal demand is expected to drop next year and plateau through 2026, and global demand is set to decline to 2026, “but China will have the last word,” the IEA noted.

The outlook for coal in China will be significantly affected in the coming years by the pace of its clean energy deployment, weather conditions, and structural shifts in the Chinese economy, according to the agency.

Moreover, the three top coal producers in the world – China, India, and Indonesia – are boosting production, which is reaching new highs.

Those three coal producers, accounting for more than 70% of the world’s coal production, are expected to break output records in 2023, pushing global production to a new high in 2023.

Despite projected slight annual drops after 2023, global consumption is forecast to remain well over 8 billion tons through 2026, according to the IEA’s report.

“To drive down emissions at a rate consistent with the goals of the Paris Agreement, the use of unabated coal would need to fall significantly faster,” the agency said.

Keisuke Sadamori, IEA Director of Energy Markets and Security, commented,

“A turning point for coal is clearly on the horizon – though the pace at which renewables expand in key Asian economies will dictate what happens next, and much greater efforts are needed to meet international climate targets.”