World coal consumption fell by 6.2 exajoules (EJ), or 4.2% (its fourth decline in six years), led by declines in the US (-2.1 EJ) and India (-1.1 EJ). OECD coal consumption fell to its lowest level in our data series (which goes back to 1965), led by the US (-19.1%) and South Korea (-12.2%).
China and Malaysia were notable exceptions, increasing their consumption by 0.5 EJ and 0.2 EJ respectively.
The growth in renewables last year came largely at the expense of coal-fired generation, which experienced one of its largest declines on record (405 TWh, 4.4%). In addition to falling power demand and increasing deployment of renewables, coal was also hurt by a loss of competitiveness relative to natural gas, especially in the US and EU.
These trends are exactly what the world needs to see as it transitions to net zero: strong growth in renewable generation crowding out coal. That said, the ‘more than doubling’ in wind and solar generation over the past five years hasn’t made even the smallest dent in total coal generation.
The level of coal generation in 2020 was essentially unchanged from its level in 2015 as last year’s fall simply offset increases from the previous few years. It will take more than just strong growth in renewable energy to remove coal from the global power sector, especially at the pace it needs to happen. There is still a long way to go to squeeze coal out of the power sector.
Global coal production was down 8.3 EJ (5.2%). As with consumption, production growth in China (1.1 EJ) was outweighed by sharp declines in several countries, including the US (-3.6 EJ), Indonesia (-1.3 EJ) and Colombia (-1.0 EJ).
World coal reserves in 2020 stood at 1074 billion tonnes and are heavily concentrated in just a few countries: US (23%), Russia (15%), Australia (14%) and China (13%). Most of the reserves are anthracite and bituminous (70%). The current global R/P ratio shows that coal reserves in 2020 accounted for 139 years of current production with North America (484 years) and CIS (367 years) the regions with the highest ratios.
Coal prices fell for a second successive year in 2019, largely due to consumption falling by 4.2%. Prices fell fastest in North America (25%), followed by Northwest Europe (17.4%), then Japan. Prices in China were relatively resilient, falling by just 3%, amid rising coal consumption in the country.
Coal trade decreased by 6.2% in 2020, the second consecutive annual decline. Notable declines in exports came from the US (-0.6 EJ), Australia (-0.4 EJ) and Colombia (-0.4 EJ), accounting for 70% of the total decline in exports. On the import side, Europe continued to see significant declines (-1.2 EJ), followed by India (-0.5 EJ) and South Korea (-0.5 EJ), which together outweighed growth in the rest of Asia (0.9 EJ).