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Coal

2023

Analysis and forecast to 2026

The IEA examines the

full spectrum

of energy issues

including oil, gas and

coal supply and

demand, renewable

energy technologies,

electricity markets,

energy efficiency,

access to energy,

demand side

management and

much more. Through

its work, the IEA

advocates policies that

will enhance the

reliability, affordability

and sustainability of

energy in its

31 member countries,

13 association

countries and beyond.

This publication and any

map included herein are

without prejudice to the

status of or sovereignty over

any territory, to the

delimitation of international

frontiers and boundaries and

to the name of any territory,

city or area.

Source: IEA.

International Energy Agency

Website: www.iea.org

IEA member

countries:

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Japan

Korea

Lithuania

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Spain

Sweden

Switzerland

Republic of Türkiye

United Kingdom

United States

The European

Commission also

participates in the

work of the IEA

IEA association

countries:

Argentina

Brazil

China

Egypt

India

Indonesia

Kenya

Morocco

Senegal

Singapore

South Africa

Thailand

Ukraine

INTERNATIONAL ENERGY

AGENCY

Coal 2023 Abstract

Analysis and forecast to 2026

Page | 3

I EA. CC BY 4.0.

Abstract

The global coal market has experienced a turbulent three years. Demand dropped

sharply during the Covid pandemic, only to leap during the post-Covid rebound

and following Russia’s invasion of Ukraine. In 2022, global coal demand reached

its highest level ever. Today, coal remains the largest energy source for electricity

generation, steelmaking and cement production – maintaining a central role in the

world economy. At the same time, coal is the largest source of man-made carbon

dioxide (CO2) emissions, and curbing consumption is essential to meeting

international climate targets.

A historic turning point could arrive soon. The International Energy Agency’s latest

projections see coal demand peaking within this decade under today’s policy

settings, primarily as a result of the structural decline in coal use in developed

economies and a weaker economic outlook for China, which has also pledged to

reach a peak in CO2 emissions before 2030. However, key questions remain,

including when the peak in demand will occur, at what level, and how fast

consumption will decline after that point.

Since its first publication in 2011, the IEA’s annual Coal Report has served as the

global benchmark for the medium-term forecast of coal supply, demand and trade.

Its analysis also covers costs, prices and mining projects at regional and country

level by coal grade. Given coal’s impact on energy supply and CO2 emissions,

Coal 2023 is indispensable reading for those following energy and climate issues.

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Coal2023Analysisandforecastto2026INTERNATIONALENERGYAGENCYTheIEAexaminestheIEAmemberIEAassociationfullspectrumcountries:countries:ofenergyissuesincludingoil,gasandAustraliaArgentinacoalsupplyandAustriaBrazildemand,renewableBelgiumChinaenergytechnologies,CanadaEgyptelectricitymarkets,CzechRepublicIndiaenergyefficiency,DenmarkIndonesiaaccesstoenergy,EstoniaKenyademandsideFinlandMoroccomanagementandFranceSenegalmuchmore.ThroughGermanySingaporeitswork,theIEAGreeceSouthAfricaadvocatespoliciesthatHungaryThailandwillenhancetheIrelandUkrainereliability,affordabilityItalyandsustainabilityofJapanenergyinitsKorea31membercountries,Lithuania13associationLuxembourgcountriesandbeyond.MexicoNetherlandsThispublicationandanyNewZealandmapincludedhereinareNorwaywithoutprejudicetothePolandstatusoforsovereigntyoverPortugalanyterritory,totheSlovakRepublicdelimitationofinternationalSpainfrontiersandboundariesandSwedentothenameofanyterritory,Switzerlandcityorarea.RepublicofTürkiyeUnitedKingdomUnitedStatesTheEuropeanCommissionalsoparticipatesintheworkoftheIEASource:IEA.InternationalEnergyAgencyWebsite:www.iea.orgCoal2023AbstractAnalysisandforecastto2026AbstractTheglobalcoalmarkethasexperiencedaturbulentthreeyears.DemanddroppedsharplyduringtheCovidpandemic,onlytoleapduringthepost-CovidreboundandfollowingRussia’sinvasionofUkraine.In2022,globalcoaldemandreacheditshighestlevelever.Today,coalremainsthelargestenergysourceforelectricitygeneration,steelmakingandcementproduction–maintainingacentralroleintheworldeconomy.Atthesametime,coalisthelargestsourceofman-madecarbondioxide(CO2)emissions,andcurbingconsumptionisessentialtomeetinginternationalclimatetargets.Ahistoricturningpointcouldarrivesoon.TheInternationalEnergyAgency’slatestprojectionsseecoaldemandpeakingwithinthisdecadeundertoday’spolicysettings,primarilyasaresultofthestructuraldeclineincoaluseindevelopedeconomiesandaweakereconomicoutlookforChina,whichhasalsopledgedtoreachapeakinCO2emissionsbefore2030.However,keyquestionsremain,includingwhenthepeakindemandwilloccur,atwhatlevel,andhowfastconsumptionwilldeclineafterthatpoint.Sinceitsfirstpublicationin2011,theIEA’sannualCoalReporthasservedastheglobalbenchmarkforthemedium-termforecastofcoalsupply,demandandtrade.Itsanalysisalsocoverscosts,pricesandminingprojectsatregionalandcountrylevelbycoalgrade.Givencoal’simpactonenergysupplyandCO2emissions,Coal2023isindispensablereadingforthosefollowingenergyandclimateissues.Page3IEA.CCBY4.0.Coal2023Acknowledgements,contributorsandcreditsAnalysisandforecastto2026Acknowledgements,contributorsandcreditsThisInternationalEnergyAgency(IEA)publicationhasbeenpreparedbytheGas,IEA.CCBY4.0.CoalandPowerMarketsDivision(GCP),headedbyDennisHesseling,whoprovidedusefulsuggestionsandcommentsthroughouttheprocess.KeisukeSadamori,DirectorofEnergyMarketsandSecurity,providedwithessentialguidance.CarlosFernándezAlvarezhasledandco-ordinatedtheanalysis.JulianKeutz,ArneLilienkampandCarlosFernándezAlvarezaretheauthorsofthereport.OtherIEAcolleaguesprovidedimportantcontributions,includingYasminaAbdelilah,HeymiBahar,StephanieBouckaert,ErenÇam,LouisChambeau,JoelCouse,LauraCozzi,CaroleEtienne,VíctorGarcíaTapia,TimGould,CiaránHealy,AlexandraHegarty,PaulHugues,LauraMaríMartínez,GergelyMolnár,ApostolosPetropoulos,FrederickRitterandHiroyasuSakaguchi.TimelyandcomprehensivedatafromtheEnergyDataCentrewerefundamentaltothereport.TaylorMorrisonandNicolaDraguiprovidedinvaluablesupportduringtheprocess.ThanksgoalsototheIEAChinadesk,particularlyRebeccaMcKimm,YangBiqingandWangYujunfortheirresearchonChina.TheIEACommunicationandDigitalOffice(CDO)providedproductionandlaunchsupport.ParticularthanksgotoJethroMullen,actingHeadofCDO,andhisteam:AstridDumond,JuliaHorowitz,IsabelleNonain-SemelinandThereseWalsh.JustinFrench-Brookseditedthereport.OurgratitudegoestotheInstituteofEnergyEconomicsattheUniversityofCologne(EWI)forsharingtheirextensivecoalexpertiseandmodellinginsights.CRUprovidedinvaluabledataandinformationforthisreport.ThankstoGlenKurokawaforhissupportandsuggestions.OurgratitudegoestotheIEACoalIndustryAdvisoryBoard(CIAB)fortheirsupport.Specialthankstotheinternationalexpertswhohaveprovidedinputduringtheprocessand/orreviewedthedraftofthereport.Theyinclude:KevinBall(WhiteheavenCoal),MickBuffier(Glencore),MichaelCaravaggio(EPRI),RodrigoEcheverri(NobleResources),NikkiFisher(ThungelaResources),JustinFlood(DeltaElectricity),PatriciaNaulitaLumbanGaol(Adaro),LukazsMazanek(PolskaGroupaGornicza),PeterMorris(MineralsCouncilofAustralia),BrianRickettsPage4Coal2023Acknowledgements,contributorsandcreditsAnalysisandforecastto2026(Euracoal),HansWilhemSchiffer(RWE),PaulSimons(YaleUniversity)andAkiraYabumoto(J-POWER).Theindividualsandorganisationsthatcontributedtothisreportarenotresponsibleforanyopinionorjudgementitcontains.AnyerrororomissionisthesoleresponsibilityoftheIEA.Forquestionsandcomments,pleasecontactCarlosFernándezAlvarez(Carlos.Fernandez@iea.org).Page5IEA.CCBY4.0.Coal2023TableofcontentsAnalysisandforecastto2026TableofcontentsExecutivesummary..................................................................................................................7Demand....................................................................................................................................11Supply......................................................................................................................................41Trade........................................................................................................................................60Thermalcoal.........................................................................................................................63Metallurgicalcoal..................................................................................................................70Pricesandcosts.....................................................................................................................76Prices....................................................................................................................................76Costs.....................................................................................................................................89Coalminingprojects:Export..............................................................................................103Generalannex.......................................................................................................................114Page6IEA.CCBY4.0.Coal2023ExecutivesummaryAnalysisandforecastto2026ExecutivesummaryGlobalcoalconsumptionreachedanall-timehighinIEA.CCBY4.0.2022…Globalcoaldemandreachedarecordhighin2022amidtheglobalenergycrisis,risingby4%year-on-yearto8.42billiontonnes(Bt).Thegrowthengineforcoaldemand,whichincreasedinbothpowerandnon-powersectors,wasonceagainAsia.InChina,demandroseby4.6%,or200milliontonnes(Mt).InIndia,itincreasedby9%,or97Mt;andinIndonesia,wherenickelsmeltersbecameasignificantsourceofdemandgrowth,itshotupby32%,or49Mt.TheUnitedStatessawcoaldemandfallby8%,or37Mt,morethananyothermarket,whilea4.3%increaseinconsumptioninEuropewasmoremutedthanmanyhadfeared.DespitesubduedhydropowerandnuclearelectricitygenerationinsomeEuropeancountries,aweakeconomyandmildwinterinEuroperestrainedtheimpactofnaturalgaspricespikes,whichencouragedsomeswitchingtocoal.…andtheworldisheadingtowardsanewrecordin2023In2023weexpectcoaldemandtofallinalmostalladvancedeconomies.ThebiggestdropsinconsumptionwilloccurintheEuropeanUnionandtheUnitedStates,whererecordannualdeclinesofaround20%areexpected.Otheradvancedeconomies–suchasKorea,Japan,CanadaandAustralia–aresettoseelowerratesofdecline.Nevertheless,thegrowthinChina(around5%)andIndia(over8%),aswellasinIndonesia,VietNamandthePhilippines–whichtogetherrepresentmorethan70%ofglobalcoaldemand–willmorethanoffsetthesedecreasesonagloballevel.InChinaandIndia,inparticular,risingcoalconsumptionisdrivenbyrobustgrowthindemandforelectricityandlowhydropoweroutput.Overall,weexpectglobalcoaldemandtogrowslightly(by1.4%)bothinpowerandnon-powersectorsin2023toaround8.54Bt,anewrecord.Globalcoaldemandissettodeclineto2026–butChinawillhavethelastwordWeforecastthatChina’scoalconsumptionwillfallin2024andplateauthrough2026,withhydropoweroutputsettorecoverwhileelectricitygenerationfromsolarPVandwindincreasessignificantly.However,thepaceofeconomicgrowthinChinaanditscoaluseinthecomingyearsissubjecttouncertainty.Thecountry’seconomyisundergoingmajorstructuralchangesasitreachestheendofinfrastructure-led,energy-intensivegrowth,butthespeedatwhichitchangesPage7Coal2023ExecutivesummaryAnalysisandforecastto2026gearsandcontinuestoexpandcleanenergycapacitywillhaveasignificantinfluenceontheoutlookforcoal.Theavailabilityofhydropowerisakeyvariableintheshortterm,sincecoalisusedasasubstitutewhenhydrounderperformsinChina.India,Indonesiaandotheremerginganddevelopingeconomiesareexpectedtorelyoncoaltopowerstrongeconomicgrowth,despitecommitmentstoacceleratethedeploymentofrenewablesandotherlow-emissionstechnologies.Bycontrast,duetotheirdifferenteconomicandenergycontext,wedonotseeamajorriskofcoaluserisingagainamongadvancedeconomies.Coalpowerplantsarebeingregularlyshutteredintheseeconomies,andindustrialcoalconsumptionissettodeclineduetoweakindustrialoutput,improvedefficiency,andincreasedswitchingtootherfuels.Overall,weexpectglobalcoaldemandtodropin2024andplateauthrough2026,evenintheabsenceofgovernmentsannouncingandimplementingstrongercleanenergyandclimatepolicies.Asaresult,globalcoalconsumptionin2026issettobe2.3%lowerthanin2023–althoughChinawillhavethelastword.Coal’sshifttoAsiaisacceleratingThedominanceofChinaincoalmarketsisstrongerthananyothercountryforanyotherfuel.Itconsumesmorethanhalfoftheworld’scoalandproduceshalfofit,anditisthelargestimporter,accountingforclosetoone-thirdoftheglobalcoaltrade.ButIndiaandASEANalsoexertagrowinginfluence–helpingfurthershiftthefocusofthecoalmarkettowardsAsia.In2000,advancedeconomiesaccountedforalmosthalfofglobalcoalconsumption(48%),whileChinaandIndiatogetheraccountedfor35%.CoalconsumptionhasdeclinedintheEuropeanUnionsincethe1980sandintheUnitedStatessincethe2000s,whereasithasgrownstronglyinChina,IndiaandASEAN.Asaresult,in2026,weexpectChinaandIndiatoaccountformorethan70%ofglobalcoalconsumption.Bycontrast,theEuropeanUnionandUnitedStatesareexpectedtoeachaccountforaround3%ofglobalcoalconsumption.Thisincreasinggapinrelianceoncoalbetweencountriescouldpresentchallengesforfutureinternationaldialogueontheneedforrapiddeclineinglobalcoalusetoreachclimategoals.MajorcoalproducersareincreasingtheiroutputEnergysecurityhasmovedfurtherupthepoliticalagendaafterthemarketdisruptionssparkedbytheCovid-19pandemicandRussia’sinvasionofUkraine.ForChinaandIndia,domesticcoalproductionhaslongbeenthecornerstoneofenergysecuritypolicy.Inrecentyears,bothcountrieshavestruggledtokeepthelightsonduringperiodsofhighelectricitydemandevenbeforetheseshocksowingtocoalshortagesandhighprices.Asaresult,bothgovernmentshaveintensifiedeffortstoincreasecoalproductionsinceOctober2021.Page8IEA.CCBY4.0.Coal2023ExecutivesummaryAnalysisandforecastto2026Outputfromthethreelargestproducerscontinuetoreachnewhighs.InChina,productioninbothShanxiandInnerMongoliasurpassed1Btinrecentyears.Indiaisalsoprojectedtocrossthisthresholdin2024.AndinIndonesia,whichhassignificantlyboostedcoaloutputinrecentyearsamidelevatedinternationalpricesandincreasingregionaldemand,productionisexpectedtoreach700Mtin2023forthefirsttime.Meanwhile,ligniteproductioninEurope,whilestillsignificant,willfallinlinewithregionaldemandthrough2026.HardcoalproductioninPoland,whichhascommittedtoshutdownitscoalminesby2049,issettocontinueitsslowbutinevitabledecline.ProductiondroppedintheUnitedStates,thoughthedeclinewasnotassteepasthecollapseindemand,givenhigherexportsandstockbuilding.USproductionissettodeclinefurtherthrough2026tobelow400Mt,whichwouldbethelowestlevelinsixdecades.InAustralia,productionissettodeclinethrough2026,drivenbybothlowerdomesticdemandandexports.Coaltradehasexpandedtoanall-timehighin2023butwilldeclineafterwardsThevolumeofcoaltradehasincreasedalmosteveryyearthiscenturywithveryfewexceptions.In2015,China’smeasurestoprotectitsdomesticcoalindustry,coupledwithaslowingeconomythatweighedonconsumption,ledtothefirstcontractionincoaltradesincethe1990s.In2020,theeconomicdownturndrivenbytheCovid-19pandemictriggeredtheseconddrop.Now,afterarecoveryin2021and2022,globalcoaltradevolumesaresettoriseagainin2023,reachingrecordlevelsforseaborneandtotaltrade–thoughdeclinesareexpectedinthecomingyears.Europeanimportscollapsedin2023amidlowdemandandplentifulstocks,whileJapan,KoreaandChineseTaipeireducedtheirimportsinlinewithlowercoaldemand.However,growthinChina,whichwillrecorditshighestimportseverin2023,willmorethanoffsetthesedeclines.DespitestrongdomesticproductioninChina,exportershavebenefittedfromrobustdemandandmassivestockbuildingduetoenergysecurityconcerns.Onthesupplyside,Indonesiaonceagainprovedtobethemostflexibleexporterandwillexportcloseto500Mtin2023,alevelthathasneverbeenreachedbyanycountrybefore.Australiawillincreaseexportsby10MtasdisruptionsinducedbyLaNiñainthepastfewyearsrecede.Russia’seffortstoreplaceitsformerEuropeanenergycustomerscontinue,withabouthalfofexportsin2023directedtoChina,upfromlessthanone-quarterin2021.Page9IEA.CCBY4.0.Coal2023ExecutivesummaryAnalysisandforecastto2026In2023,thermalcoalpricesareretreatingfromtheir2021and2022highsInOctober2021,thermalcoalpricesreachedunprecedentedlevelswhensupplywasinsufficienttomeetasuddenriseindemandafterCovidrestrictionswereeasedinmanycountries.AfterRussia’sinvasionofUkrainein2022,highgasprices,supply-sideconstraints,andenergysecurityconcernsdrovecoalpricestoall-timehighs.Yetaftersummer2022,lowergaspricesandgreatercoalsupplyledtoapullbackincoalprices.In2023,priceshavefurtherrecededglobally,althoughtheyarestillhigherthanpre-Covidlevels.Regionaldisparitiesareevident,withpricessteadierinChinaowingtostrongdomesticsupply,whileweatherdisruptionsjoltedpricesinAustralia.Russiancoalhastradedatavariablediscount,sometimesontheorderofUSD200pertonne,thoughmorerecentlyithasbeenjustafewdollarspertonnecheaper.Coalproducershaveseensignificantcostinflationinthepastfewyears,whichhasstemmedfromincreasedroyaltiesowedtogovernmentsinsomepartsoftheworldandsurgingcostsforfuel,explosives,tyresandlabour.TwoyearsofunprecedentedprofitshaveleftcoalproducersflushwithcashCoalpricesduringthepasttwoyearshavebeenmuchhigherthanexpected.Consumershavestruggledtocopeasenergybillshavejumped.Somecountriesintervenedtoprovidesupportthroughregulatorymeasuresandsubsidies,especiallyintheelectricitysector.Meanwhile,producershaveenjoyedstrongmarginsevenastheircostshaverisen,andgenerousroyaltieshavemadesignificantcontributionstothepublicbudgetsofmanyproducercountries.Coalminingcompanieshavepaidbackdebts,increaseddividendsandbuybacks,andretainedsomecash.Diversifiedminershaveoftenchannelledcoalprofitstowardsothercommoditiesasgrowingdemandtiedtotheenergytransitionisexpectedtodriveuptheirprices.However,Glencore,thelargestthermalcoalexporter,willalsobecomeamajorproducerofcokingcoalafteritcompletesitsacquisitionofElkValleyResources,whichwasannouncedearlierthisyear.Giventhedifficultyofreceivingregulatoryapprovalsandpublicpushbackagainstnewprojects,purecoalplayersaregenerallyoptingtoacquireexistingminesratherthandevelopprojectsfromscratch.Page10IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026DemandGlobalcoaldemandisexpectedtopeakin2023anddecreasethereafterIn2022,coaldemandreachedanewrecordhighof8415Mt,increasingby4%.Theincreasewasmainlybackedbygrowthincountriesthatrelyheavilyoncoal,suchasChinaandIndia.Furthermore,extraordinarilyhighgaspricesandgenerallyweakernuclearpowerandhydropowerproductiondrovegrowthindemandforcoaltogeneratepower.Coaldemandforpowergenerationroseby4%to5687Mt.Coalusefornon-powerpurposesroseby3.7%to2728Mt.Accountingformorethanhalfofglobalcoaldemand,Chinaisbyfartheworld’slargestcoalconsumer.In2022,thecountry’soverallcoaldemandroseby4.6%toatotalof4520Mt,withcoaltakingashareofmorethan60%inpowergeneration.India,theworld’ssecond-largestcoalconsumercomprisingabout14%ofglobalcoaldemand,recordedanincreaseof9%,totalling1162Mt.In2023globalcoaldemandisexpectedtohaveincreasedonlymarginallyby1.4%,albeitreachinganewall-timehighofabout8536Mt.Coaldemandgrowthislosingmomentumduetolukewarmeconomicprospectspairedwiththeweakeningofthefactorsthatpushedcoal-firedpowergenerationin2022.Meanwhile,globalcoaldemandisexpectedtocontinuemovingeastwards,withChina,India,andASEANcountriescombinedconsumingthree-quartersofglobaldemand.Atthestartofthecentury,thatsharewasaround35%,lowerthanthecombinedshareoftheEuropeanUnionandtheUnitedStatesatthattime.Inabsoluteterms,coaldemandin2023isestimatedtohaveincreasedmoststronglyinChina(up220Mt,or4.9%),followedbyIndia(up98Mt,or8%)andIndonesia(up23Mt,or11%).ThelargestdeclinesareexpectedintheEuropeanUnion(down107Mt,or23%)andtheUnitedStates(down95Mt,or21%),drivenmainlybytheelectricitysector,butalsobyweakindustrialactivity.DataandforecastsforRussia,currentlythefourthlargestcoalconsumer,aredifficulttoestimate,givenongoingwaragainstUkraine.Likewise,Ukraine’sforecastisquiteuncertain.Forourforecastperioduntil2026weexpecttoseeatrendemergingofdecliningworldwidecoaldemand,startingin2024.WithgrowthinIndiaandASEANoffsettingdeclinesintheEuropeanUnionandtheUnitedStates,Chinaremainsthedecisiveplayerforsettingthetrendofglobalcoaldemand.HigherrenewablePage11IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026growththanoverallelectricitydemandgrowthislikelytopushglobalcoalconsumptiononadownwardtrajectory.Thiswouldimplythatcoalislikelytopeakin2023.Globalcoalconsumption,2002-2026Mt900080007000200520082011201420172020202320266000UnitedStates5000ASEAN4000ForecastIEA.CCBY4.0.30002000100002002ChinaIndiaEuropeanUnionRestofworldChangeinglobalcoalconsumption,2022-2026Mt860085368500315084159876840084834485830010722013795205820081008000-+2023-+20262022IndiaASEANUnitedStatesChinaRestofworldForecastEuropeanUnionIEA.CCBY4.0.Page12IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026Coalinpowergenerationissettodeclinethroughto2026In2022,globalelectricityproductiongrewbyabout2.3%toatotalof29074TWh.Coal-firedpowergenerationmadeupabout36%ofthetotal,remainingthelargestsource.DrivenbygrowingelectricitydemandinAsia,highgaspricespushingupcoaluseforpowergenerationinsomepartsoftheworld,andaweakperformanceoverallfromnuclear(down141TWh),coal-firedpowergenerationgrewbyabout1.4%(up141TWh)resultinginanincreaseincoaldemandfromthepowersectorofabout4%(up220Mt).Thedifferenceingrowthratesisaccountedforbyadecreaseinthecalorificvalueofcoalusedforpowergeneration,mainlyinChina.Lowergaspricesin2023,fallingclosetopre-crisislevels,haveledtoapartialreverseofthegas-to-coalswitchintheEuropeanUnion.Incontrast,thepowermixinChinaandIndiaislessexposedtoglobalgaspricedevelopments,andthereforethedevelopmentofrenewablesandgrowthinelectricitydemandarethemaindeterminantsofcoal-firedgeneration.Globalpowerdemandgrowthisexpectedtohaveslowedto2%in2023,curbed,amongotherfactors,byweakeconomicgrowthinmatureeconomiesintheaftermathoftheenergycrisis.Weanticipatecoal-firedpowergenerationtohavegrownby1.5%(up158TWh),increasingcoaluseinthepowersectorby1.4%(up81Mt).Weexpectrenewableadditionstohaveaccountedforthelargestshareofelectricitydemandgrowthin2023,gaining5%(or443TWh).Changeinglobalpowerdemandandgenerationbysource,2022-20264000TWh3000IEA.CCBY4.0.200010000-1000Demand-+Demand-+2022-2023Others2023-2026ForecastPowerdemandCoalGasRenewablesandnuclearIEA.CCBY4.0.Page13Coal2023DemandAnalysisandforecastto2026Forourforecastperiod2024-2026,thisdevelopmentisabouttobecomeevenmorepronounced,withrenewablesgrowthexceedinggrowthinelectricitydemandinitiatingadownturnincoal-firedpowergeneration.Afterrecentyearsoflowrainfall,weassumethatthechangeinweatherpatternfromLaNiñatoElNiñowillimprovehydroavailabilityinChinaandIndia.Inaddition,asteepupwardtrendinlow-costsolarPVdeploymentsupportstheriseinrenewablegeneration.Furthertothat,nucleargenerationissettoseemoderateincreases,especiallyinChina,IndiaandtheEuropeanUnion.Againstthisbackground,coal-firedgenerationislikelytobepushedintoadownwardtrajectoryfrom2024.Inthethree-yearperiod,weexpectadecreaseof5%,fallingto10067TWhin2026.Bythen,coal’sshareoftheglobalelectricitymixwouldhavedroppedtojustover30%,thelowestshareinIEArecords.Non-powerthermalcoalandlignitedemandgrowsslightlythroughto2026Besidespowergeneration,thermalcoalandlignitefindapplicationsinarangeofotheractivities,includingbutnotlimitedtothemanufactureofcementandprovidingheatforindustrialandresidentialpurposes.In2022,overallnon-powerthermalcoalandligniteconsumptionroseby7%to1642Mt.Onthisbasis,non-powerusesaccountedfor22%ofoverallthermalcoalandligniteconsumptioninthatyear.Themajorshareofthisgrowthin2022isaccountedforbyChineseconsumptionrisingto973Mt,wherethecoalconversionsectortoreplacecostlyoilandgasproductsplayedasignificantrole.AnevenstrongerincreaseinrelativetermswasobservedinASEANcountries,whereconsumptionincreasedby51%from65Mtto98Mt.ThisexceptionalincreasewaspredominantlyfuelledbyIndonesiangrowth(up31Mt).Indonesiaisstrategicallyrampingupitsnickelproduction,toservegloballyrisingdemandsforthiscriticalmineralusedinthemanufactureofbatteries.AsproductionprocessesinIndonesiaoftenusecoalasadirect(reductant)orindirect(captivepowergeneration)constituent,nickelproductionhasbecomeanimportantdriverofcoaldemand.Indeed,thishasimplicationsforthecarbonfootprintofthatnickel.Page14IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026Changeinthermalcoalandligniteconsumptionfornon-powerpurposesbyregion,2021-2026120Mt100Restofworld80EuropeanUnion60OtherAsia40ASEAN20IndiaChina0Forecast-20World-402022-20232023-20262021-2022IEA.CCBY4.0.Weexpectaggregatednon-poweruseofthermalcoalandlignitetohaveslightlyincreasedin2023,asgainsinASEAN,IndiaandChinaarelikelytoovercompensatefordeclinesintheEuropeanUnionandotherAsiancountries.InChina,ongoingeffortstodecreasecoalconsumptionforresidentialheatingandsmallindustry,andthestagnationofinfrastructure-relatedinvestmentdampeningcementdemand,weighontheoutlookfornon-powercoalconsumption.Conversely,thecoalconversionsector(coal-to-liquids,coal-to-gasandcoal-to-chemicals;seefurtherdetailinthesectionbelow)exhibitshugepotentialforcoaluseandfindsitselfontheriseamidChina’sendeavourtoreduceenergyimportdependency.Overall,weexpectaslightdeclineinChina’sthermalnon-powercoaldemandthroughto2026.India’snon-powerthermalcoalandligniteconsumptionislikelytocontinueitsupwardtrajectory,asindustrialactivityisexpectedtoincreasebyalmost6%annuallyinthenextthreeyears.Accordingly,weestimateconsumptiontoriseby44Mtby2026.TogetherwithASEAN(up20Mt),Indiaisexpectedtoserveastheenginebehindthermalnon-powercoalconsumptioninthenextthreeyears.Summarisingthesedevelopments,weforecastglobalthermalcoalandligniteconsumptionfornon-powerusetoincreaseby58Mt,or1.1%annually,until2026.Page15IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026Metcoaldemandplateaus,butuncertaintyinChinaincreasesMetallurgical(met)coal,whichincludescokingcoal(hard,medium,andsemi-soft)andcoalforpulverisedcoalinjection(PCI)isaprimaryingredientinsteelmaking.Coke,whichisgeneratedfromtheheatingofcokingcoalinacokeovenwithoutoxygen,isalsoemployedinthemanufactureofcarbides,ferroalloysandotherchemicalcompounds.Accordingly,ourprojectionsformetcoaldemandareprimarilybasedonthesteelproductionforecastsoforganisationssuchastheWorldSteelAssociation,aswellasGDPgrowthandindustrialproduction.Preliminarydatafor2022showaslightdeclineinglobalmetcoalconsumption,downby2Mtto1086Mt.Amidthatyear’senergymarketrollercoaster,Russia(down3Mt,or4.1%),Korea(down2Mt,or6%),andtherestoftheworld(down10Mt,or12%)accountedforthegreatestreductions.Inlightofaweakeconomicperformanceandhighenergypricesin2022,Chinesemetcoaldemandrosebyonly2%to718Mt.Ourestimatefor2023showsanoverallsurgeinmetcoalconsumptionof1.4%to1101Mt.Thiscomeshandinhandwithenergypricesdecliningalmosttopre-crisislevelsandhighersteelproductioninsomecountries.TheincreaseisfuelledbygrowthinChinaandIndia,whichmorethanoffsetdeclinesintheEuropeanUnionandotherworldregions.Metcoalconsumptionandannualchangebyregion,2021-2023Mt40Mt12001000208006000400-20200020222023-402022-202320212021-2022ChinaIndiaRussiaEuropeanUnionJapanKoreaRestofworldIEA.CCBY4.0.Page16IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026Forthenextthreeyears,wedonotexpectsignificantchangesinmetcoalconsumptionasenergymarketsandeconomicoutlookappeartobeonamoderatetrend.Furthermore,substitutesformetcoal,suchashydrogen,donotappeartobemarket-readyintheforecastperiod,andthusproducersareunlikelytooffsetmetcoaldemandamideconomicgrowth.Asaresult,weforecastoverallmetcoalconsumptiontoslightlyincreaseby17Mtto1118Mtoverthecourseofthenextthreeyears,withIndiacontributingthemosttotheuplift.WedonotexpectChinesemetcoalconsumptiontoalignwithoverallindustrialactivity,asinfrastructure-relatedinvestmentsconsumingsteelarelikelytodeclineinthecomingyears.Forecastchangeinmetcoalconsumptionbyregion,2023-20261160Mt1140111811201101110010802023RussiaEuropeanUnionJapanandKorea2026ChinaIndiaRestofworldIEA.CCBY4.0.ChinaisreachingpeakcoalWithtotalconsumptionof4520Mtin2022,Chinaisbyfartheworld’slargestcoalconsumer,accountingfor54%ofglobalcoalconsumption.Themajorshare(84%)ofChina’scoalconsumptionwasthermalcoal,totalling3801Mt,whichwaspredominantlyusedforpowergeneration.Theremainingvolumeswere718Mtofmetcoal.Afteraweakeconomicperformancein2022,whensevereenergyshortagesandstrictlockdownsimposedbyazero-Covidpolicyweighedonenergyconsumption,Chinahasbeengainingmomentumagain.GDPisestimatedtohaveincreasedby5.2%in2023,up2.2percentagepointsfromthepreviousyear’sgrowth.However,weexpectmetcoalconsumptiontohaverisenbyaslowerrate,assteelproductioninthefirstthreequartersof2023onlyroseby1.7%year-on-year.ThisPage17IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026comesasnewconstructionactivity,historicallydrivingdemandforsteelandcement,hasenteredasubduedperiodasthehousingmarketappearstobeoversupplied.For2023,weestimateanincreaseinmetcoalconsumptionof2.7%to738Mt.ThemaindriverbehindChina’scoalconsumptionisthepowersector.Weexpectcoal-firedpowergenerationtohaveincreasedbyalmost7%in2023.Giventhatnon-powerconsumptionofthermalcoalhasremainedalmostflat,weestimategrowthintotalthermalcoalconsumptionof5%in2023,reaching4002Mt.Againstthisbackground,Chinaisabouttoreachanewall-timehighof4740Mtin2023.AnimportantremarkisthatthequalityofcoalproducedinChinadeterioratedin2022and2023followingaproductionpush(see“Supply"Chapter).Asaresult,theaveragecalorificvalueofcoalusedhasdeclined.Therefore,thegrowthofcoalconsumptioninenergyterms–morerelevantfortheassessmentofCO2emissions–islowerthaninmassterms,whichisthemeasureusedinthisreport.Year-on-yearpercentagechangeinthreeeconomicindicatorsinChina,January-October202320%15%10%5%0%-5%-10%-15%-20%Jan-FebMarAprMayJunJulAugSepOctThermalpowergenerationSteelproductionCementproductionIEA.CCBY4.0.Source:IEAanalysisbasedonNationalBureauofStatisticsofChina(2023),StatisticalDatabase.OurforecastforChina’scoalconsumptioninthenextthreeyearsfollowsdevelopmentsinthepowersectorandprojectionsforindustrialproductionandoveralleconomicgrowth.Thebackboneofourestimateistheriseinrenewablegenerationexceedinggrowthinelectricitydemand,mainlydrivenbytheaccelerationinsolarPVdeploymentandreboundingprecipitationin2024,pushinguphydrogeneration.ThiscausesthermalcoalconsumptionforpowergenerationPage18IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026todeclinesignificantly,downby6%or175Mtby2026.Atthesametime,metcoalconsumptionandnon-powerthermalcoalconsumptionaresettoundergomoderatedeclinesbetween2024and2026.Asaresult,weexpectChinesecoalconsumptiontodecreaseby4.3%or205Mtby2026comparedto2023.Forthefirsttime,thestructuralshiftinpowergenerationtowardsrenewablesimpliesnotonlyapeakinChinesecoaldemandin2023butalsoapeakinworldcoalconsumptionin2023,asChina’sdevelopmentdictatestheglobaltrendonthebasisthatotherworldregionsbalanceeachotherout.AnnualchangeincoalconsumptionbygradeanduseinChina,2023-2026Mt250200150100500-50-100-1502023202420252026MetcoalThermalcoal(non-power)Thermalcoal(power)ForecastIEA.CCBY4.0.AstronguptickinrenewablesinitiatesthedeclineinChina’scoalpowergenerationWithaninstalledcapacityofapproximately1.1TWandgenerationof5489TWhin2022,coalcontinuedtoholditspositionasthepredominantenergysourceforelectricitygenerationinChina.Furthermore,electricitygenerationisresponsibleforabout74%ofChina'sthermalcoaldemandandabout63%ofitstotalcoaldemand.Historically,bothgenerationandcapacityhavegenerallygrowninlinewithelectricitydemand,providingvitalsupportforChina'seconomicascent.However,thisinterrelationappearstobediminishinginthefaceoftherapidgrowthofrenewablepowergeneration.GrowthinChina’scoal-firedpowergenerationin2023isexpectedtohaveacceleratedfromthatseenin2022,whenweakeconomicactivityreinedincoal-firedpowergeneration.Weestimateelectricitydemandtohavesurgedby6%in2023,surpassing9000TWhforthefirsttime.ThisincreasedelectricitydemandPage19IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026isrootednotonlyinrobusteconomicactivitybutalsoinheatwavesinseveralprovinces,withBeijingexperiencingoneofitshottestsummersonrecord.Severedroughtsinthefirstsixmonthsoftheyearwereamajordriver,weighingonhydropoweravailabilityandexacerbatingtheuptickincoal-firedgenerationandcoalconsumptionaccordingly.Againstthisbackground,weestimatethermalcoalconsumptionforpowergenerationtohavesurgedby190Mtto3018Mtin2023.Inlightofthepowershortagesinrecentyears,causedbycoalshortage,alackofavailablegenerationcapacityandinefficientdispatchincentives,Chinahasbeenseekingtoensureresourceadequacybyexpandingitscoal-firedpowerplantfleet.In2022,Chineseauthoritiesapprovedmorethan100GWofcoal-firedpowercapacity.Inthefirsthalfof2023,Chinaadded17GWofcoalcapacity,beganconstructionof37GW,andapproved52GWofnewprojects.Thisenlargestheprojectpipelineupto243GW,withanother149GWannouncedbutnotformallyapproved.Thesurgeinrenewablesislikelytobeardownontheaverageutilisationofcoal-firedpowerplants,asadditionalcoalcapacityismainlyneededtomeetincreasingpeakdemands.Actually,on10November2023,theChinesegovernmentannouncedcapacitypaymentsforcoalpowerplantstoensureinvestmentisrecoveredirrespectiveoftheirloadfactor.1However,thereisariskthatadditionalcoalcapacitymaycauselock-ineffects,weighingonfutureeffortstocutemissions.Fortheperiodbetween2024and2026weexpectachangeinChina’spowergeneration,layingthefoundationforcoalconsumptiontodeclinefrom2024onwards.Thekeytothisdevelopmentisasteepupwardtrajectoryinrenewablegeneration,whichgrowsfasterthanelectricitydemand.Weassumethathydroavailabilityreboundsafteratwo-yearlow,andthattheacceleratinggrowthinwindandsolarcapacitybearsfruit.Togetherwithsteadyincreasesinnucleargeneration,thiscausescoal-firedgenerationtostartitsdownwardtrendafter2023.Nonetheless,thisstructuraltrendmayseetemporarydeviations,drivenbyeventssuchascoldsnaps,heatwaves,rainfall,andvolatilityinwindspeedandsolarirradianceaswellasthedevelopmentofelectricitydemand.Allthesefactorsinfluencetheutilisationofcoalplants,whichlargelyserveasthedefaultelectricitysupplier.Insummary,weestimatecoalconsumptionforpowergenerationtodeclineby175Mtduring2024-2026,downto2843Mt.1ThefirstannouncementindicatesUSD45/kWperyearasthebenchmarkforfixedcostsofcoalplants,whilethemechanismIEA.CCBY4.0.willcoverapercentageofthatcost(30%in2024-2025and50%in2026).Page20Coal2023DemandAnalysisandforecastto2026ForecastchangeinelectricitydemandandgenerationinChina,2023-20262000TWh150010005000-500Demand+-PowerdemandRenewables,nuclearandothersCoalandcoalproductsIEA.CCBY4.0.TodemonstratetheeffectofuncertaintyinrenewablegenerationoncoalconsumptioninChina,wecanshowthevariationinthehistoricalloadfactorofrenewables(leftgraphbelow)andtranslateitintohypotheticalcoalconsumption(rightgraphbelow).Notably,allrenewabletechnologies–hydro,solarPVandwind–exhibitacertainvariabilityinannualhistoricalloadfactors.Theobservationofrenewablebehaviouroverthelasttwotothreedecadesshowsthat,inChina,hydrodisplaysaspreadof10percentagepointsbetweentheminimumandmaximumloadfactor,whilewindandsolarPVexhibitspreadsof8and5percentagepoints,respectively.Alower-than-averageloadfactorofrenewablesneedstobereplacedbyothertechnologies,whichinthecaseofChinaismostlycoal.GiventheconsiderablerenewablecapacityinChina,thesefluctuationshaveanon-negligibleimpactoncoalconsumption.Inoursubsequentanalysis,weassumethatcoal-firedpowerplantsbalancedifferenthypotheticalloadfactors,giventherenewablecapacityin2023.Thefindingsrevealthat,assumingtheweakestperformanceofhydro,wind,andsolarobservedoverthelasttwotothreedecades,theadditionalcoalconsumptionforpowergenerationwouldamounttoalmost200Mt.Conversely,themaximumloadfactorforrenewableswouldexceed240Mtofavoidedcoaluse.Assumingaloadfactorofrenewablesinthe25thor75thpercentilewouldapproximatelyhalvethechangesincoalconsumptioncomparedtotheextremecases.Eventhoughthesimultaneousoccurrenceofextremeloadfactorsremainsimprobable,theanalysisunderscoresthemagnitudeoftheuncertaintythatweathereffectshavePage21IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026oncoalconsumption.Andthisisonlytheanalysisofthesupplysideofelectricity;theimpactofweatheronelectricitydemandisafurtherrelevantdeterminantforcoalconsumption.LoadfactorofrenewablesandhypotheticaleffectoncoalconsumptioninChina45%300LoadfactorMt40%20035%30%10025%020%15%-10010%-2005%0%-300HydroPVWind25%Min75%MaxIEA.CCBY4.0.Notes(left):Hydroloadfactorbasedon1990-2023data;PVandwindloadfactorsbasedon2000-2023data.Thetopandbottomedgesoftheboxesrepresentthe75thand25thpercentiles,respectively.Thelinesinsidetheboxesrepresentthemedians.Notes(right):Hypotheticalcoaluserepresentsvolumesthatwouldbeconsumed,ifdifferentlevelsofcombinedloadfactorsofrenewablesapply,i.e.,25%correspondstoassumingallrenewablesareinthe25thpercentileloadfactor.Weassumecoalconsumptionof0.45MtperTWhofelectricity.China’sthermalnon-powerdemandsawaremarkablehighin2022,butissettodeclinethroughto2026China’sthermalcoalconsumptionfornon-powerusesroseby7%to973Mtin2022,accountingfor22%ofChina’stotalcoalconsumption.ThisamountisalmostequivalenttothecombinedcoalconsumptionofEuropeandNorthAmerica.Despitetheeffortsmadeduringthepastdecadetoswitchfromcoaltoother–mostlygasandelectricity–inordertoreduceairpollutionfromsmall,inefficientandoutdatedcoalboilers,theuseofcoalinsectorsotherthanpowerandsteelinChinaisstillconsiderable.Unlikeinmostdevelopedcountries,coalinChinaisstillusedinavarietyofindustriesfromfoodtotextilesandpapertonumerousothersectors.Duetotheswitchawayfromcoal,weexpectcoaluseinsmallindustryandinresidentialheatingtocontinueitsdeclineinthecomingyears.Page22IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026Moredifficultistheswitchincementmaking,whichwouldrequiretheavailabilityoflow-costalternativefuels,giventhehighproportionoftotalproductioncoststhatfuelaccountsfor.Cement,whichutilisesover200Mtofcoalperyear,isthesinglelargestconsumerofthermalcoalamongindustries.CementproductioninChinaappearstohavepeakedin2020,andafterthemajordeclinein2022(over10%),weexpectthedeclinetohavecontinuedin2023,despitegrowthobservedinthefirsthalfof2023.TherealestatesectorinChinaiscontracting,andthisissettoweighoncementproductionandsotoooncoaldemand.Thisappliesnotonlyto2023butalsototheforecastperiod,asthistrendappearstobestructuralinnatureandnotresolvableintheshortterm.Asignificantdriverofthegrowthinthermalnon-powerapplicationsin2022wasthecoalconversionsector,asdescribedinthesectionbelow.Summarisingthesedevelopments,weestimatethermalnon-powercoalconsumptiontohaveslightlyincreasedin2023to984Mt.Forthetrajectoryuntil2026,weexpectdeclinesinindustrialandheatingapplicationstomorethanoffsetgrowthintheconversionsector,leadingtoareductionof0.8%downto976Mt.StronggrowthseeninChina’scoalconversionsectorCoalconversionreferstotheprocessesthatusecoalasafeedstocktoobtainanothercommodityastheoutput(usuallyviacoalgasification).Dependingonthefinalproduct,itistypicallyclassifiedascoal-to-liquids,coal-to-gas(SNGorsyntheticnaturalgas)orcoal-to-chemicals,withmethanolplayinganimportantroleasafinalproductorasanintermediateproducttoproduceolefinsandotherchemicals.Foroveradecade,coalconversioninChinahasbeenseenasastrategytoreduceforeigndependence,amidincreasingoilandgasimports,andtomonetisedomesticcoalassets–particularlythoseconsideredstrandedduetoqualityorlocation–whilepromotinglocaljobs.Ontheflipside,theseprocessesaregenerallyenergyinefficient,water-andCO2-intensive,andhaveveryvolatileeconomicprofitabilityduetoitsdependenceonoilandgasprices.Page23IEA.CCBY4.0.Coal2023DemandCoal-to-gasAnalysisandforecastto2026FertiliserKeyprocessroutesofthecoalconversionsectorinChinaSyntheticAmmonianaturalgasPolyesterCoalSynthesisgasOlefins,GasificationEthyleneothersCoal-to-Coal-to-glycolDiesel,liquidschemicalsDirectcoalIndirectcoalgasolineliquefactionliquefactionMethanolIEA.CCBY4.0.IntermediateEnduseCoal-to-liquidsreferstotheproductionofliquidfuelssuchasdieselorgasolinefromcoal.Coaliseitherliquifieddirectlyinareactorbyhydrogenationorconvertedintosynthesisgas,and,usingtheFisher-Tropschprocess,thenconvertedtoliquidfuelsthroughindirectliquefaction.ThebiggestamongChina’sprojectsisthe4MtpaShenhuaindirectliquefactionplant,whichcameonlinein2017.ThefacilityisoperatedbytheNingxiaCoalIndustryGroupandfirstreachedfullcapacityinlate2021.In2021forChinaasawhole,38Mtofcoalwasusedtoproducearound10Mtofoilproducts,accordingtoIEAstatistics.Liquidsproducedfromcoalcurrentlyaccountfor1%ofoilconsumptioninChina.Giventheprojectsunderconstruction,weassumeannualgrowthofover8%forcoal-to-liquidsbetween2022and2026.Thepredominantendproductsinthecoal-to-gasroutearesyntheticnaturalgas(SNG)andfertiliser.Ammonia,whichismainlyusedtoproducefertilisers,isproducedinChinamostlyusingsynthesisgasfromcoalgasification,unlikeanyothercountry.Whiletheconsumptionoffertilisershasremainedsomewhatsteady,theneedtoreduceairpollutioninresidentialareashasspurredtheconsumptionofnaturalgasandindirectly,theproductionofSNG.ThefirsttwoSNGprojectscommencedin2013,withatemporarysuspensionofapprovalsin2015duetoenvironmentalissues.In2016,threenewprojectswereapproved.Originally,thegovernmentsetatargettoproduce55bcmofSNGby2020,butasof2021,SNGaccountedforaround10bcmofdomesticgasproduction.Againstthisbackground,weassumecoalconsumptionforcoal-to-gastogrowby5%annuallybetween2022and2026.However,thisfigureissubjecttouncertainty,asanestimated300bcmofprojectsarecurrentlyatdifferentstagesofdevelopment,indicatingapotentialsurgeinSNGproduction.InXinjiangalone,sixprojectsaccountingfor26bcmofSNGcapacityperyearhavebeenPage24IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026announcedforcompletioninthenextfouryears.Thiswouldinvolveconsumptionofaround60-65Mt.InInnerMongolia,Xinmeng’s8bcmperyearprojectcurrentlyunderconstructioncouldconsumealmost20Mtpaofcoalonceworkingatfullcapacity.Themostdynamicsectoramongcoalconversioniscoal-to-chemicals,alsoknownasCTX.Itinvolvesthegasificationofcoaltosynthesisgas,whichisthenprocessedmostlyintomethanolorethyleneglycol.Methanolisoftenconvertedtoolefins,thebasisformanufacturingplastics,whereasethyleneglycolisthebasisforpolyesterandothermaterials.OverthepastdecadetheChinesegovernmenthassupportedCTXprocesseswithsubsidies,increasingtheshareofcoalasasourceinpetrochemicalsfrom3%in2010to16%in2018.Bytheendof2020,therewereoperationalprojectsinChinawithproductioncapacitytotalling16Mtpaofcoal-to-olefinsand4.9Mtpaofcoal-to-ethyleneglycol,andsincethenthesectorhascontinueditsgrowth.Weexpectgrowthtocontinueintheyearsahead,asnumerouscoal-to-olefinsprojectshavebeenannouncedinInnerMongolia,Shanxi,andGansu,amongotherregions.Forexample,Sinopec,whichalreadyownsfiveCTXfacilitiesinNingxia,InnerMongolia,Anhui,Guizhou,andXinjiang,hasannouncedaprojecttoproduceafurther0.8MtofolefinsviaCTXinInnerMongoliafrom2024.ChinesemetcoalconsumptioncontractsamidarealestatecrisisChina’smetcoalconsumptionstoodat718Mtin2022,accountingforabouttwo-thirdsofworldwidemetcoalconsumptionand16%ofthecountry’soverallcoalconsumption.Thevastmajority(87%)ofmetcoalconsumptioninChinaiscokingcoal,whichismostlyconvertedtocoke,areductantintheblastfurnaceprocessforpigironproductionandotherindustrialprocesses.Pigiron,inturn,isthemainingredienttosteelmaking.Thebalanceofmetcoal(13%)isPCI(pulverisedcoalinjection)coal,whichisinjectedintheblastfurnacetoreducecokeconsumption.22022marksthesecondyearinarowofpigironproductionremainingstagnant,therebyweighingonthegrowthinmetcoalconsumption.Newhomeconstruction,akeydriverforChinesesteeldemand,fellbyabout40%in2022,downtoitslowestlevelsince2009.Aswithcementdemand,thecrisisintherealestatesectorislikelytocontinueweighingonmetcoaldemand.Nonetheless,weestimatemetcoaldemandin2022tohavemoderatelygrown,asthesubstitutionofhigh-qualityAustralianwithlower-qualitycokingcoalprobablyincreasedthespecificconsumptionofcokeintheblastfurnaces.2Thisisanestimate,asChinesestatisticsdonotreportPCIasaseparatecategory.IEA.CCBY4.0.Page25Coal2023DemandAnalysisandforecastto2026ChangeinmetcoalconsumptioninChina,2021-2026,andshareofmetcoalgrades,2022Mt25Metcoal2022(718Mtpa)13%20151050-5-10-15-2087%-252021-2022-2023-202220232026ForecastCokingcoalPCIIEA.CCBY4.0.Forthefirsthalfof2023,theChineseNationalBureauofStatisticsreportsgrowthinpigironproductionof2.7%andgrowthincokeproductionof1.8%comparedtothefirsthalfof2022,implyingslightgainsinmetcoalconsumption.Forthefullyearof2023,weestimatemetcoalconsumptiontohavegained2.7%,toatotalof738Mt.Inourforecastperiod,weexpectsteeldemandtoremainmutedasareflectionoftheongoingrealestatecrisis,affectingpigironproduction,andthusmetcoaldemand.Moreover,about20provinceshavereleasedplanstoincreasescrapuseincrudesteelproduction,whichwouldreducetheproductionofpigiron.AndsomeChinesefirmsplantoinstallcokeproductionunitsinIndonesia,whichwouldaltercokingcoaldemandinChina.Againstthisbackground,ourestimateisformetcoalconsumptiontodecreaseby1%annuallyuntil2026,downto716Mt.CoaldemandgrowthinIndiaacceleratedin2022and2023CoalconsumptioninIndiasurgedby9%toatotalof1162Mtin2022,markinganotheryearofremarkablegrowthafter2021’s14%reboundfromtheCovid-19pandemic.India’scoaldemandismainlydeterminedbyitsuseinpowergeneration,accountingfor74%ofoverallconsumption.Theremaindercomprises231Mtofthermalcoalandlignitefornon-poweruse,ofwhichcementanddirectironreductionarethemainconsumers,and72Mtofmetcoal,primarilyusedinsteelproductionviatheblastfurnaceroute.DespiteaglobalcontractioninPage26IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026economicgrowthandenergypricesreachingall-timehighs,India’seconomycontinueditsupwardtrendwithGDPgrowthof7%inthefinancialyear(FY)2022.Amongotherfactors,thiseconomicdevelopmentwassupportedbystrongdomesticcoalproduction(up12%)andthecountry’smoderateexposuretoglobalmarketprices,asIndia’scoalimportsharestoodatlessthan20%in2022.For2023,weexpectIndia’seconomytohavegrownagain,albeit,ataslowerpacecomparedto2022,withindustrialactivityseeinggrowthof5%andpowergenerationalmost9%higher.Coal-firedpowergenerationmeetsmostofthegrowthinpowerdemand,asrenewables,despitebeingontherise,cannotmeetdemandgrowth–unlikeinChina.For2023,weexpectcoalconsumptionforpowergenerationtohaveincreasedby9%to937Mt.Alignedwiththeeconomicoutlook,industrialoutputhasalsobeenrisingstronglyin2023,pushingupdemandforthermalcoalandligniteinnon-powerapplications,likecementanddirectironreduction.Accordingly,weestimatenon-powerthermalcoalandligniteconsumptiontohaverisenby12Mtin2023,to243Mt.MetcoalhasthesmallestshareofIndiancoalconsumption,withanexpectedtotalof81Mtin2023.Likeothercoalgrades,metcoalconsumptionisgrowingassteelproductionsurgedthrough2023,indicatedinourgraphbyyear-on-yearchangesindirectironreduction(thermalcoal)andblastfurnaceironproduction(metcoal).Year-on-yearpercentagechangeforvariouseconomicindicatorsinIndia,January-September202330%20%10%0%-10%PowergenerationCementproductionDirectreducedironproductionBlastfurnaceironproductionIEA.CCBY4.0.Source:IEAanalysisbasedonMcCloskey(2023).McCloskeyCoal,MetalsandMiningService.Page27IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026IndiabecomesthemainengineofcoaldemandgrowthIndiabecomesthedrivingforcebehindtheupwardpressureonglobalcoaldemandthroughto2026,eveniftheglobaltrendisdecidedinChina.Fortheforecastperioduntil2026,weestimateIndiancoaldemandtoriseby3.5%annuallyto1397Mt,withgrowthineverycoalgrade.Indiahasatargetforrenewablestoachievea50%shareofitspowergenerationmixby2030,therebyreducingthepowersector’sdependencyoncoal.AsinChina,solarPVissettogainmomentumandsurgeintheperiodto2026,withcapacitylikelytotripleby2026comparedto2021.Nonetheless,additionalcoal-firedgenerationwillstillberequiredtomeetthegrowthindemandandensuresecurityofsupply.Againstthisbackground,India’slatestNationalElectricityPlanforeseesbetween19GWand27GWofadditionalcoalcapacityupto2027,dependingonthescenario,despiteabouttwicethecapacityalreadybeingintheprojectpipeline.Forthenextthreeyears,ourmodelforecastsannualgrowthincoalconsumptionforpowergenerationof2.4%,whereasrenewablegenerationisforecasttogrowby12%annually.India’snewpolicyonbiomassco-firing,startinginApril2024,setsanobligatoryblendingrateof5%forcoalplants,increasingto7%subsequently.However,itseffectoncoalconsumptionisuncertain,asthebiomasssupplychainisinitsinfancy.Asaresult,weestimateamoderateincreaseincoalforpowergenerationof69Mtto2026,thetotalreaching1006Mt.Coalfornon-powerpurposesisexpectedtosurgesignificantly,withindustrialproductionsettoincreaseannuallyby6%between2024and2026.Giventhefocusoninfrastructure,weexpectastrongincreaseincementproduction,beingoneofthemaindriversofgrowthinnon-powerthermalcoalandlignitedemand.Forexample,theAdaniGroup,thelargestindustrialconglomerateinIndia,isaimingtodoubleitsproductioncapacityby2028uptoaround140Mtpa.ThemarketleaderUltraTechiscurrentlyrunningacapacityofabout132Mtpaandisseekingtoreach160Mtpasoon.Togetherwithconsistentlyincreasingsteeldemanddrivingconsumptionofsteamcoal(directironreduction)andmetcoal(blastfurnaceroute),weestimatenon-powercoalconsumptionof391Mtin2026,growing21%overthethree-yearperiod.Page28IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026AnnualchangeincoalconsumptionbycoalgradeinIndia,2022-2026120Mt10080604020020232024202520262022MetcoalThermalcoalandlignite(non-power)Thermalcoalandlignite(power)ForecastIEA.CCBY4.0.AnnualchangeinpowergenerationbysourceinIndia,2022-2026TWh1601401202023202420252026100806040200-20-402022CoalandcoalproductsNuclear,gas,oilandotherRenewablesForecastIEA.CCBY4.0.Thelong-standingdeclineofUScoalcontinuesthroughto2026CoaldemandintheUnitedStatesisgenerallydeterminedbypowergeneration,accountingformorethan93%ofUScoaldemand.Coal-firedpowergenerationhadbeenonadownwardtrajectoryforalmostadecadeuntilitsshortuptickinPage29IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto20262021,whichwasrootedintherecoveryfromtheCovid-19pandemicamidhighgasprices.Afterthisbriefrevival,coal-firedpowergenerationcontinueditsdeclinein2022,fallingbyalmost8%to915TWh.Reducedcoal-firedgenerationwascompensatedbymorerenewablegenerationandanincreasingshareofgas-firedgenerationdespitehighergaspricesin2022.Followingcurrentannouncements,UScoal-firedgenerationcapacityissettodecreasebyabout13%by2026comparedwith2022.BasedontheEnergyInformationAdministration(EIA)weexpectplannedretirementstototalmorethan10GWin2023andanaccelerationinrenewablecapacitytosupportthedownwardtrendincoal-firedpowergeneration.Thus,weestimatethermalcoalandlignitedemandof345Mtin2023.Moreover,theUSInflationReductionActislikelytoboostinvestmentinrenewables,acceleratingthistrend.However,theuseofcarboncaptureandstorage(CCS)couldsupportcoal-firedgenerationinthemediumterm,andtheBidenadministrationsignificantlyincreasedexistingtaxcreditsforcarbondioxidestoredunderground,incentivisingCCS.But,asutilitiesappeartostrugglewiththecostsandtechnologicalcomplexityofCCS,andwiththedevelopmentofCCSprojectstakingseveralyearstocomplete,wedonotassumeanynoticeableeffectsoncoaldemandbefore2026.Overall,weforecastcoal’sshareintheelectricitymixtofallby8percentagepoints,downto12%in2026comparedwith2022.Combinedwithalmoststeadydemandformetcoalinthenextthreeyears(ataround14Mt),thiswouldresultinacoalconsumptionof276MtintheUnitedStatesin2026,muchlowerthananyconsumptionintheUnitedStatesinIEAstatisticssince1960.Page30IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026UScoal-firedcapacityandgeneration,2018-202628012721400GWTWh2409.59.46.115.1120024610.41.811.63.51000200160178800120600805424004020002018201920202021202220232024202520260Retirement(leftaxis)Generation(rightaxis)ForecastIEA.CCBY4.0.Notes:Capacityvaluesfor2023to2026arebasedonannouncedretirements.2018aggregatedcapacityisbasedonoperationalcapacityin2022andretirementsandcommissionsbetween2018and2022.Retirementsafter2022areplannedretirements.Sources:IEAanalysisbasedonEIA(2023),ElectricPowerMonthlyandEIA(2023),CoalData.AndIEAestimates.Afterashort-liveduptick,theEUcoaldemandphase-downcontinuesRussia’sinvasionofUkrainesignificantlydisruptedtheEuropeanUnion’scoalandgasmarkets,resultinginunprecedentedpricelevels.Amidanalreadytightgasmarketinearly2022,thesubsequentshutdownsofRussiangassuppliesfuelledpriceincreasesevenfurther.Moreover,severalpolicieswereenactedtoguaranteesecurityofsupplyoverthewinter2022/23,includingtheobligationtofillgasstoragefacilities.Amongotherfactors,thisledtogaspricesskyrocketinginsummer2022.Thecrisisalsohadramificationsforthecoalmarket,albeitwithoutreachingthepricelevelswitnessedinthenaturalgassector.Duetothelowermarginalcostsassociatedwithcoal-firedgeneration,therewasanoticeableuptickincoaldemandforpowergenerationthroughout2022comparedwithpriorexpectations.Thesurgeincoal-firedgenerationwaspropelledbyconstrainedavailabilityofFrenchnuclearunitsandbelow-averageperformanceofScandinavianhydropower.SomeEuropeancountriesdevelopedpoliciestoliftcoal-firedplantutilisation,extendthelifetimeofexistingunits,orevenrestartclosedcoal-firedpowerplantstoalleviatepowermarkets.Inlightofhighenergypricesin2022,industrialactivityslowed,thuscausingmodestreductionsinindustrialcoaldemand.Page31IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026However,withmildweatherinthe2022/23winterandsuccessfulpoliciessuchastargetedreductionsinenergyconsumption,pricelevelseventuallycamedowninbothcoalandgasmarkets.Thereturntopricelevelssimilartothoseoccurringattheendof2021ledtogas-firedunitsbecomingcost-competitiveagain.Spring2023evensawaperiodwhenoldandinefficientgas-firedunitshadlowermarginalcoststhanefficientcoal-firedunits.Togetherwiththereturnofnuclearunitsthathadbeenundermaintenanceformonths,andincreasingrenewablegenerationoverthecourseof2023,coal-firedgeneration–andthuscoaldemand–plunged.Moreover,electricitydemandisestimatedtohavefallenagainin2023,bymorethan4%,leadingtothelowestelectricitydemandseenintheEuropeanUnionfortwodecades.Reflectinganenergymarketthathaseasedcomparedwith2022,coalphase-outplansarestillontheagenda,causingsignificantreductionsincoalcapacityinthenextthreeyears.Germanyaloneissettoreducelignite-firedplantsby3.7GWandhardcoalcapacityby8GWbetween2023and2025,whichalsoincludesplantsthattemporarilyreturnedfromgridreservetothemarketduringtheenergycrisis.Acceleratingdeploymentofrenewables,especiallysolarPV,willexacerbatethedeclineincoal-firedgeneration.Thiscomesdespiteelevatedgaspricelevelsthroughoutthecomingyears,whichindicatescompetitivegenerationbetweencoal-andgas-firedunitsassumingstrongpricesforEUAllowances(EUAs,orCO2tradingunits).Asaresult,ourmodelsindicateadecreaseinEUcoaldemandfromthepowersectorof71Mtbetween2024and2026,withdemandtotalling192Mtin2026,andPolandreducingitscoaldependencyataslowerpacethantheothermemberstatesusingcoalforpowergeneration.Thiscorrespondstoasignificantdeclineof27%forthethree-yearperiodto2026.However,theoutlookiscloselylinkedtothedevelopmentofgasprices,whichmayinturnaffecttheestimatesforcoaldemand.Drivenbypowermarketdevelopmentsandinpartbymoderateeconomicgrowth,aggregatecoalconsumptionintheEuropeanUnionisexpectedtodeclinefrom354Mtin2023to278Mtin2026.InJune2023,theRepublicofTürkiyeovertookGermanyandPolandincoal-firedpowergenerationforthefirsttime.Theincreaseincoal-firedgenerationcomesdespiteanoveralldecreaseincoalconsumption(down0.7%),duetoahigherutilisationofimportedhardcoalandlessgenerationfromlower-CVdomesticlignite.TheTurkishgovernmenthasnotannouncedproposalstostopusingcoalyetandplanstoenablenewcoalminingactivitytofuelpowergenerationdespitethepressureofenvironmentalmovements.By2026,ourmodelforecastsdeclineincoaldemandto109Mt,asrenewablesreplacesignificantsharesofcoal-firedgeneration.Page32IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026EUmarginalcoal-andgas-firedpowergenerationcosts,2021-2026500500EUR/MWhEUR/t450450Forecast400400350350300300250250200200150150100100505000Jan-21Jan-22Jan-23Jan-24Jan-25Jan-26Coal(leftaxis)CCGT(leftaxis)Germanlignite(leftaxis)EUA(rightaxis)IEA.CCBY4.0.Notes:EUA=EuropeanUnionAllowance.CCGT=combined-cyclegasturbine.CCGTnetefficiency=49-58%.Coalnetefficiency=35-46%.Lignitenetefficiency=39%.Sources:IEAanalysisbasedonArgusMediagroup.Allrightsreserved.AndIEAestimates.CoaldemandgrowthinASEANisdrivenbyIndonesiaASEANcoalconsumptiontotalled413Mtin2022,upby13%comparedtothepreviousyear.CoalconsumptionacrossASEANisdeterminedbypowergeneration,accountingfor71%ofconsumptionin2022.NearlyhalfofASEANconsumptionwasinIndonesia(49%),followedbyVietNam(20%),Malaysia(9%)andthePhilippines(9%).For2023,weexpectASEANconsumptiontohavecontinueditsincreasetoreach444Mt,mainlydrivenbyasurgeinIndonesiandemand.Giventhestrongeconomicoutlookfortheregionandthenumberofcoal-firedpowerplantsunderconstruction,weforecastdemandof528Mtin2026,growingby6%annually.DespiteIndonesiaaimstotransitiontocleanenergyandreducecoalusage,underlinedbytheUSD20billionpackageintheJustEnergyTransitionPackage(JETP)3,itisabouttoconstructmultiplenewcoal-firedpowerfacilitiestailoredforindustrialpurposes.Thesecaptivecoalplants,whoseprimaryobjectiveistofeednickel,cobaltandaluminiumsmelters,accountfor13GWofthetotal18GWin3JustEnergyTransitionPartnership(JETP)Indonesiaisaninitiativelaunchedon16November2022inBalibytheIEA.CCBY4.0.GovernmentofIndonesia(GoI)andtheInternationalPartnersGroup(IPG).TheIPGwillprovidefinancialsupporttoIndonesiatogetajustenergytransition.Page33Coal2023DemandAnalysisandforecastto2026thepipeline.ThisexpansionreflectsIndonesia’sstrategytotransformthecountryintoaprominentmanufacturinghubforelectricvehiclesandbatteries,inwhichnickelplaysakeyrole.Nickel,thefifth-mostcommonelementonearth,isconsideredacriticalmineral.Itisusedinawiderangeofapplicationsduetoitsspecialchemicalcharacteristics,includingitshighmeltingpointanditsresistancetocorrosion.About70%ofprimarynickelproductionisusedinsteelproduction,followedbybatteryproductionwithashareofabout11%,whichissettoincreaseinthecomingyearswithsurgingdemandforbatteries.Accordingtoitspurity,nickelcanbecategorisedintoClass1(withanickelcontenthigherthan99.8%),whichisusedinbatterymanufacturing,andClass2(withanickelcontentlowerthan99.8%),whichispredominantlyusedasanalloyingmetalinsteelproduction.Indonesiaistheworld’slargestnickelminer,miningaroundhalfoftheglobaltotal,andhasbecomeamajorproducerofClass2nickel;however,itisalsoextendingitsClass1capacitywithgrowingdemandfromglobalbatterymanufacturers.Ingeneral,twomainnickelproductionprocessesareappliedinIndonesia:therotarykiln-electricfurnace(RKEF)andthehigh-pressureacidleach(HPAL)process.InthemoreenergyintensiveRKEFprocess,crushednickeloreisfirstprocessedwithareductantinarotarykilnbeforeanelectricfurnacemeltsittoferronickel(FeNi)ornickelpigiron(NPI),bothofwhichareClass2nickel.FeNiandNPIcaneitherbeusedinsteelproductionorconvertedtonickelmatte,which,inturn,canbeprocessedintoClass1nickelforbatteries.InIndonesia,coalisuseddirectlyintheprocessandoftenincaptiveplantsdedicatedtosmelting,toproducetheelectricityrequiredinthisprocess.IntheHPALprocess,nickeloreismixedwithacidandsteaminanautoclave.Afterthis,theleachiswashedbycounter-currentdecantationbeforemixedhydroxideprecipitate(MHP)isobtainedthroughtheadditionofmagnesiumoxide,ormixedsulphideprecipitate(MSP)isobtainedthroughtheadditionofhydrogensulphide.MHPandMSPcanfinallybeprocessedtoClass1nickelforbatteries.Coalisusedindirectlyforpowergeneration–oftenincaptiveplants–inthisprocess.Withgrowingdemandforelectricvehiclesandbatteries,demandfornickelisincreasingandsoistheinvestmentinnickelproductioncapacityinIndonesia,ledbyChinesecompaniesactiveintheelectricvehicleindustrysupplychain.Significantinvestmentsarebeingmadeinbothprocesses.Forexample,ChinesenickelproducerLygendalonewilladdaproductioncapacityofmorethan0.4Mtpanickelmetalequivalentby2024,accordingtoArgusMedia,includingsixHPALprojectstotalling0.12Mtpaand20RKEFprojectstotalling0.28Mtpa.Page34IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026Mainlydrivenbythedevelopmentinthepowersectorandrapidlygrowingnickelproduction,weexpectIndonesia’scoalconsumptiontohaveincreasedby23Mtin2023to228Mt.SurgingdemandfornickelissettostrengthentheproductionofNPIinthecomingyears,andthusweestimatecoaldemandof284Mtin2026.DevelopmentandforecastchangeincoalconsumptioninASEANcountries,2022-2026Mt600Mt60500504004030030Mt2002011024246800000000102023202610020222021002022202320262023-26IndonesiaVietNamMalaysiaPhilippinesThailandOtherASEANForecastIEA.CCBY4.0.TheexpectationisthatcoaldemandincreasedinVietNamin2023,mainlyduetoheatwavesthatresultedinsummertemperaturesofupto44°Cdrivingupcoolingdemand.Reducedhydrogenerationcausedbylowwaterlevelsfurtherpushedcoalconsumption,whichisestimatedtohavetotalled89Mt.Lookingahead,VietNamrecentlyaligneditscoalcapacityexpansiontargetswiththeJETPagreement.Accordingtocurrenttargets,coalcapacityshouldpeakat30GWin2030,indicatinganincreaseof4GWfromtoday’sactivecapacity.Againstthisbackgroundweestimateasurgeincoalconsumptionto103Mtin2026.InthePhilippines,weexpectcoalconsumptiontohaveincreasedslightlyfrom39Mtin2022to40Mtin2023.Likemostcountries,coalconsumptioninthePhilippinesismainlydeterminedbypowergeneration,andthemajorshareofcoalconsumedisimportedfromIndonesia.Inlightofastrongeconomicoutlook,weexpectcoalconsumptiontoincreaseaswell,reaching45Mtinthenextthreeyears,asrenewableadditionsseemunlikelytooffsetthegrowthinelectricitydemandinthenearfuture.Thailandusessignificantamountsoflignitetopowerelectricitygeneration.In2022,ligniteaccountedfor15MtofThailand’scombinedcoalconsumptionof35Mt.Lignite-firedcapacityissettobeexpandedby0.7GWby2026;however,Page35IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026theremainingcoal-firedcapacityisunlikelytochangesignificantlyinthecomingyears.For2023,weexpectcoalconsumptiontohavedecreasedby9%,andby2026weforecastaslightincreaseto38Mt.CoaldemandissettodeclineinmatureAsiaPacificeconomiesCoalconsumptionintheAsiaPacificregionisdominatedbyitsuseforpowergeneration.KeyconsumersinthisregionareJapan,Korea,Australia,andChineseTaipeiwithacombinedconsumptionof468Mtin2022.InJapan,coalconsumptionwasalmoststeadyfrom2021to2022,slightlyincreasingby2Mttoatotalof185Mt.DespiteskyrocketingLNGspotprices,coal-firedgenerationhasnotbeenaffectedsignificantlyduringthepastyear’senergycrisisasJapaneseLNGsuppliesarelargelycoveredbylong-termcontracts.Thereturntopre-crisispricelevelsinenergymarketsaswellasambitioustargetsforthedeploymentofrenewables(i.e.thedoublingoftherenewableelectricityshareby2030comparedtothe2019level)areweighingontheoutlookforthermalconsumption.Moreover,Japan’sKansaiElectricPowerhasrestartedoperationsatitsTakahama1and2nuclearreactors,whichhadbeenshutdownfollowingtheFukushimadisaster,addingabout1.5GWtothesystem.Also,asof2023,aregulatoryadjustmentallowsfortheextendedoperationofoldnuclearplantsbeyond60years,improvingtheprospectsfornucleargeneration.Besidespowergeneration,metcoaldemandisexpectedtoremainalmoststeady.Againstthebackgroundofthesedevelopments,weestimateJapanesecoalconsumptiontodecreaseby8%by2026toatotalof157Mt.CoalconsumptioninKoreaalsobarelychangedin2022(down1Mt),totalling126Mt.Despitepricesdecliningin2023,Korea’scoalconsumptionisexpectedtohavedecreasedthisyear,downto120Mt.InApril,Korearestructureditsemissiontargetsfor2030asittightensthetargetsforthepowersectorwhilerelaxingthemfortheindustrialsector.Theadjustedtargetforthepowersectoristobereachedbyincreasednuclearandrenewablegeneration,whilereducingtheshareofcoalinpowerproductionfromabout34%in2021toabout20%in2030.Accordingly,thesetargetsarereflectedinourestimatesforthenextthreeyears,withcoalconsumptiondecreasingto112Mtin2026.OverallcoalconsumptioninAustraliadeclinedfrom100Mtin2021to95Mtin2022andisestimatedtohavecontinueditsdecreaseoverthecourseof2023withareductionof4%.Fortheoutlookuntil2026,weconsiderfurtherdeclinesincoal-firedpowergenerationtobelikely,ascoalcapacityincreasinglyservesasbackuppowertocoverpeakhours.TheAustralianEnergyMarketOperatorexpectstwo-thirdsofcoal-firedpowerplantstobedecommissionedby2033,althoughcurrentPage36IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026renewableadditionsarefallingshortoftargets,raisingconcernsaboutgridstabilityandpoweroutages.By2026,weexpectadecreaseincoalconsumptionof11%to81Mt.CoalconsumptioninChineseTaipeiamountedto62Mtin2022with46Mtusedforpowergeneration.In2023,weexpectcoalconsumptiontohaveremainedalmoststeady,asrenewableexpansioncontinued,butnucleargenerationdecreased.ChineseTaipeiplanstofullyphaseoutnuclearpowerby2025,andatthesametimeseekstopushuptheshareofrenewablesinthepowermix.Weestimateaggregatecoalconsumptionof57Mtin2026.CoalconsumptionbygradeinaselectionofmatureAsiaPacificeconomies,2022and2026Mt20018016014012010080604020020222026202220262022202620222026JapanKoreaAustraliaChineseTaipeiThermalcoalThermalcoalandligniteMetcoalForecastIEA.CCBY4.0.RobustcoaldemandinSouthAsiaEmergingmarketssuchasPakistan,Bangladesh,andSriLankaweregreatlyaffectedbythehighenergypricesof2022.Attimes,thesecountriescouldnotaffordtopurchasesufficientamountsofprimaryenergy,suchascoalorgas,toensuretheirgrowingdemandwasmet,partlyresultinginenergyshortages.Ourestimationfor2023includessteadytomoderategainsinthesemarkets,ascoalpriceshavedeclinedsignificantlyrelativeto2022levels.ThePakistanirupeesawaninflationrateofalmost20%in2022,andinflationremainedhighduring2023.ThisledtoadeclineinthepurchasingpowerofPakistanibuyers,increasingthecostofcoalimports.Tocounteractthis,Pakistan’scoalminerssteadilyboosteddomesticproduction.SECMC,Pakistan’slargestcoalminer,hassetatargettoincreaseitsoutputbyaround50%by2024,Page37IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026includingthesignificantexpansionofligniteproduction.Furthermore,the1.3GWTharBlock-IpowerplantfundedbytheChina-PakistanEconomicCorridor(CPEC)beganoperatinginFebruary,fuellingcoaldemand.Thisrecentstart-upisinlinewithPakistan’slatestannouncementsofashiftawayfromgastocoalinreactiontothehighLNGpricessufferedin2022,aimingtoquadrupleitsdomesticcoal-firedcapacityto10GW.However,financingfortheseprojectsisuncertainasChina,thelargestfinancer,hascommittedtonotfinancenewcoalplantsabroad.Giventhesedevelopments,ourmodelcalculatesanincreaseincoalconsumptionfrom32Mtin2023to39Mtin2026.SimilardevelopmentsinrespectofinflationtookplaceinBangladesh,wherethevalueoftheBangladeshitakasharplydecreasedandmadecoalimportscostly.Evenanewcoalplant,commissionedinlate2022,ranoutofcoalandwasidleforseveralweeksin2023.Togetherwithadverseweatherconditionscausinghigherdemand,thisledtodisruptionsinelectricitysupply,especiallybetweenMayandJuly.However,coalcapacityinBangladeshissettoincrease.The1.2GWMatarbariand1.2GWBanshkhalicoalplantsareinthetestingphaseandareexpectedtobegincommercialoperationshortly.InNovember2023,the1.3GWMaitreePowerPlantwascommissioned,puttingcoalgenerationcapacityabove5GW.Althoughprojectsareunderconsideration,theirprogressisuncertainasfundinginstitutionsfromoutsidethecountrypledgetowithdrawfromfinancingcoalprojectsinternationally.Coalconsumptionin2022was7Mtandisexpectedtohaveincreasedto13Mtin2023.Ourestimateisforcoalconsumptiontoincreaseto19Mtby2026,fuelledbysignificantcapacityadditionsandastrongeconomicoutlook.CoalconsumptioninSriLankaplungedto1.9Mtin2022andisexpectedtohaveremainedalmoststeadyduring2023.Ourestimateisforcoalconsumptiontoincreaseto2.6Mtby2026,butthisissubjecttotheperformanceoftheLakvijayapowerstation,theonlycoalpowerplantinSriLanka.CoalplantperformanceinSouthAfricaisdecisiveforAfricancoalconsumptionCoalconsumptioninAfricadecreasedby4.4Mtin2022toatotalof187MtamidpersistentissuesinSouthAfrica’scoalplantfleet.However,thedecreasewasmodestasconsumptionwasalreadyatareducedlevelintheaftermathoftheCovid-19pandemic.During2023economicactivityinAfricahasbeenstagnant,andpowercutsinSouthAfricacontinuedtoweighonthecontinent’scoaldemand.Fortheperioduntil2026,weforecastaU-turninthecontinent’scoalconsumptiontrend,withtotaldemandincreasingto193Mtinthenextthreeyears,mainlyduetobetterperformanceofthecoalassetsoperatedbythestate-ownedpowerutilityEskom.Page38IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026Africa’scoalconsumptionismainlydrivenbydevelopmentsinSouthAfrica,accountingfor84%ofthecontinent’sconsumptionin2022.AmidhighenergypricesandslowrecoveryfromCovid-19,SouthAfrica’scoalconsumptiondecreasedin2022by6Mtto160Mt.For2023SouthAfricaissettohaveexperiencedrecordloadshedding,affectinghouseholdsandindustrialactivityalike.Thepoorperformanceofcoalpowerplants,ownedbyEskom,isthemainculpritforthepowershortages.Thesepowercutsareestimatedtohaveshaved2percentagepointsoffthecountry’sGDP.Consideringthelowavailabilityofthecoal-firedpowerplantfleet,weestimatecoalconsumptionin2023tohavedecreasedfurtherto154Mt.SouthAfricaispartoftheJETP,whichaimstoclosealmosthalfofSouthAfrica’scoalplantsby2030.Lookingahead,thecircaUSD500millionEskomJustEnergyTransitionProject(EJETP),fundedbytheWorldBank,seekstodecommissionthe56-year-oldKomaticoalplantandinturnfundtheinstallationofaround0.2GWofrenewablecapacityandabout0.2GWofbatterycapacity.Thecoalplantwasshutdowninlate2022andrecordedlowavailabilityinrecentyears.However,giventhecriticalsupplysituation,SouthAfrica’sclimatepolicybodyrecentlysuggesteddelayingtheretirementofcoalplantswithoutspecifyingatimeline.Inadditiontothat,Eskomwasduetorestart2.4GWofcoalcapacitybytheendof2023.Againstthisbackground,weexpectcoalconsumptiontoreboundto164Mtby2026.InZimbabwe,a0.3GWcoal-firedpowerunitstartedoperationinMarch,andanotherblockofasimilarsizeisexpectedtocomeonlineinlate2023.CoalcapacityinBotswanaisabouttoincreaseaswell,asanew0.6GWcoalplantisplannedforconstructionbyIndia’sJindalSteelandPowerLtd.,withcompletionduein2026.Beyondthese,weexpectnonewcoalprojectstobecommissionedinAfricaby2026.Globalcoaldemandislikelytoshowitsfourthsignificantdeclinesincethe1980sWiththisyear’scoalreportforecastingastructuralreversalinglobalcoalconsumption,itisworthputtingrecentdevelopmentsintoperspective.Thehistoricaltrajectoryofcoalconsumptionexhibitsanalmostconstantincreaseoverthelastfourdecades,doublinginthe30-yearperiodfrom1984to2014.However,threecrisis-driveneventscausedcoalconsumptiontodeclinesharplyforashortperiod.ThefirsteventinitiatingadownwardtrendwasthecollapseoftheSovietUnionaroundthe1990’smarkingtheendoftheColdWar.TheresultingpoliticaluncertaintyandthedismantlingofheavyindustryintheUSSRandcountriesinitsorbitweighedoneconomicactivity,whichinturnledcoalconsumptiontodeclineby7%between1989and1992.Page39IEA.CCBY4.0.Coal2023DemandAnalysisandforecastto2026Anotherremarkabledeclineincoalconsumptiontookplaceduringtheperiod2014-2016,whenaneconomicslowdowninChinacurbedglobalcoaldemand.Withweakgrowthinpowerdemand,morethanmetbynon-coalgenerationsources,lowerdemandfornon-powerapplicationsandcontractioninthesteelandcementsector,Chinesecoaldemanddroppedby9%inthesethreeyears,andglobaldemandby6%asaconsequence.Thelatestdropinglobalcoalconsumptionstartedin2019,whennaturalgaspricesfallingtowell-belowaveragelevelsandslowgrowthinpowerdemandweighedoncoal-firedgeneration.Thedecreaseincoalconsumptionwasevenstrongerin2020,withCovid-19asthedriverofthedownturn.Thepandemiccausedthedisruptionofsupplychains,industrialactivitytoplunge,andpowerdemandtodropaccordingly.Duringthetwo-yearperiodglobalcoaldemandsawadeclineof3.9%.Alltheabove-mentioneddeclinesinglobalcoalconsumptionwerereversedduringtherecoveryoncetheeffectsofthecrisiswereover.Now,amidsteadydemandformetcoal,weappeartobefacingastructuralchangeincoaldemandforpowergenerationtriggeredbytheriseofrenewables,whichareabouttogrowmorestronglythanelectricitydemand.Intheshortterm,theuncertaintycomesfromweathervariability,whichsignificantlyimpactsrenewablegeneration.Overthelongerterm,theacceleratinggrowthofrenewablesislikelytocontinue.Irrespectiveofdemandlevels,theeastwardshiftofcoalconsumptionleavescoalbastionssuchasChina,IndiaandtheASEANcountriestobedecisivefortheactualtrendinglobalcoalmarkets.Globalcoalconsumption,1978-2026Mt9000198419901996200220082014202020268000IEA.CCBY4.0.700060005000400030002000100001978HistoricalSignificantdeclineForecastIEA.CCBY4.0.Note:Theperiodto2020showsdatawithoutadjustmentfromthefiscaltothecalendaryearinsomeworldregions.Page40Coal2023SupplyAnalysisandforecastto2026SupplyGlobalcoalsupplyislikelytohavepeakedin2023andthentodeclineinlinewithdemandFurthergrowthinglobalcoaldemandin2022,afterthebigreboundin2021,pushedglobalcoalsuppliestonewhighsofabout8582Mt(up7%).TheincreasewasledbyChina,whichdroveupdomesticproductiontoreduceitsexposuretohighimportpricesandtoavoidsupplyshortages.IndonesianproductiongrowthovertookIndiangrowth,withexportsseeingaremarkableupticktoserveincreasedseabornedemandforthermalcoalamidariseindomesticdemand.Globalcoalproductionisforecasttohaverisenby1.8%in2023,withcontinuedgrowthinIndia,ChinaandIndonesiamorethanoffsettingdeclinesintheUnitedStatesandtheEuropeanUnion.Thus,2023marksanotherall-timehighinglobalcoalproduction,totalling8741Mt.Steamcoalandligniteaccountforabout87%ofglobalcoalproductionandtheirgrowthinproductionaccountsforsimilarshareoftheglobalproductionincrease.Cokingcoalaccountsforthebalance,drivenbystronggrowthinMongolia.Changeinglobalcoalproduction,2021-2026800Mt600RestofworldIEA.CCBY4.0.Russia400EuropeanUnionUnitedStates200AustraliaIndonesia0IndiaChina-200ForecastWorld-400IEA.CCBY4.0.-6002021-20222022-20232023-2026Page41Coal2023SupplyAnalysisandforecastto2026Fortheforecastperiod,weexpectanetreductioninglobalcoalproductionstartingin2024,whichwouldmeanglobalcoalproductionpeakingin2023inlinewithglobalcoaldemand.OngoingdeclinesintheUnitedStatesandtheEuropeanUnionarelikelytobecomplementedbyreducedproductionvolumesinIndonesia,asChinesedemandforseabornethermalcoalislikelytodecrease.ThelastbastionofremarkablegrowthinproductionisIndia,servingthegrowingdemandfromitspowersector.Ourmodelsuggeststhatdeclinesinothercountrieswillmorethanoffsetthisgrowth,resultinginglobalproductionof8394Mtin2026.Globalcoalproduction,2002-2026Mt9000800070002005200820112014201720202023202660005000400030002000100002002ChinaIndiaIndonesiaAustraliaUnitedStatesRussiaRestofWorldForecastIEA.CCBY4.0.CoalproductioninChinasawaremarkableuptickin2022In2022,China’scoalproductiongrewbyalmost9%to4374Mt,anall-timehigh.Chinasignificantlyboosteddomesticcoalproductioninresponsetoapolicyreleasedinautumn2021,whichmadecoalproductionakeyenergypolicypriority,asearliercoalshortagescausedseverepowercuts.Furthermore,aramp-upofdomesticcoalproductionwasaimedatreducingChina’sexposuretoimportprices,whichreachedextraordinarilyhighlevelsin2022.Domesticproductionrosetounprecedentedhighs,passing400MtinasinglemonthforthefirsttimeinDecember2022,accordingtotheNationalBureauofStatistics.Page42IEA.CCBY4.0.Coal2023SupplyAnalysisandforecastto2026Atabout85%,mostofChina’scoalproductionisthermalcoal,complementedbymetcoal4.Morethan80%ofitsthermalcoalproductionisconcentratedinjustfourregions:InnerMongolia(34%),Shaanxi(23%),Shanxi(20%)andXinjiang(6%).Whilst2021sawadecreaseinoutputfromsmall-andmedium-sizedminesinsomeregions,thermalcoaloutputroseinallminesegmentsin2022.Thefourmajorregionsaccountedformorethan90%ofthetotalthermalcoaloutputincreaseof10%,predominantlydrivenbyexpandingoutputfromlarge-scalemines.InnerMongoliaalonecontributedmorethanhalfofthegrowth.ChangeinthermalcoalproductioninChina’smajorproducingregionsbyminesize,2021-2022Mt2001751501251007550250InnerShanxiShaanxiXinjiangOthersMongoliaLarge(>6.9Mtpa)Medium(2.3-6.9Mtpa)Small(<2.3Mtpa)IEA.CCBY4.0.Source:IEA,adaptedfromCRU(2023).ThermalCostModel(database).However,asChinaboosteddomesticproductiontoavoidsupplyshortages,thequalityofthethermalcoalhasdeclined.Inarecentreport,theCindaSecuritiesResearchandDevelopmentCentrenotedthatthegrowthrateofcoalconsumptionforpowergenerationhasbeensignificantlyhigherthantherateofgrowthinthermalpowergeneration,indicatingadeclineincoalquality.Furthermore,keyminingareasinnorthernShanxiarereportedtohaveshiftedfromhigh-qualitytolower-qualitythermalcoal,astheirhigh-qualityreservesdeplete.Inadditiontothat,estimatedwashingratios,anindicatorforcoalquality,havedecreasedbyalmostfivepercentagepointsbetween2020and2022.Metcoalproductionroseby1.1%in2022,withShanxicontributingmostofthisgrowth.Shanxiremainsthemostimportantmetcoalproducerwithashareofmore4AlthoughChinaalsoproducesanthraciteandlignite,availabledatadonotreportthesecategoriesseparately.Page43IEA.CCBY4.0.Coal2023SupplyAnalysisandforecastto2026than50%.Asinthermalcoalproduction,therehasbeenatrendtowardsupper-medium-sizedandlargemines.Nonetheless,drivenbysurgingdemandinrecentyears,smallerminesalsocontributedtoproductionexpansion.ChangeinmetcoalproductioninChina’smajorproducingregionsbyminesize,2021-2022Mt4.03.53.02.52.01.51.00.50.0ShanxiSouthEastNorthOthersLarge(>6.9Mtpa)Medium(2.3-6.9Mtpa)Small(<2.3Mtpa)Source:IEA,adaptedfromCRU(2023).MetallurgicalCostModel(database).IEA.CCBY4.0.Chineseproductiongrowthslowedin2023WeestimateChina’scoalproductiontohaveincreasedby1.3%in2023,to4429Mt.InMarch,Chinareachedanewmonthlyhighof417Mt,surpassingtherecordsetthreemonthsearlier.ProductiontypicallyedgeshigherinMarchduetorestockingafterChina’sNewYearcelebrations.Growthindomesticproductionhasbeenslowingasthetighteningofsafetymeasures,includingsafetychecks,improvementstominingfacilitiesandatighteningofapprovalprocessesinresponsetofatalmineaccidentsweighonmineoutput.Inthefirstthreequartersof2023,rawcoalproductionrosebyabout1395Mt,morethanofathirdofwhichwasaddedbyShanxi,China’slargestcoalminingregion.OutputinShanxirosebyabout5%comparedtothesamein2022.Thesecondlargestcoalproducingregion,InnerMongolia,addedanother26Mt(up3%).ThestrongestrelativeproductiongrowthwasrecordedinXinjiangwithalmost9%or25Mt.5MonthlydatabasedonNBSdoesnotnecessarilymatchIEAdata,asmonthlyvolumesareadjustedintheannualreporting.IEA.CCBY4.0.Inaddition,NBSreportsrawcoalandIEAreportsmarketablecoal.Page44Coal2023SupplyAnalysisandforecastto2026Coalproductionbymonth,China,2016-2023Mt450400JulAugSepOctNovDec35020222023300IEA.CCBY4.0.250200150100500JanFebMarAprMayJunRange2016-2021Source:IEAanalysisbasedonNationalBureauofStatisticsofChina(2023),StatisticalDatabase.Year-on-yearchangeincoalproductionbyregionofChina,JanuarytoSeptember,2022-2023Mt6030%5025%4020%3015%2010%105%0InnerShaanxiXinjiang0%ShanxiMongoliaOthersAbsolutechange(leftaxis)Relativechange(rightaxis)IEA.CCBY4.0.Source:IEAanalysisbasedonNationalBureauofStatisticsofChina(2023),StatisticalDatabase.Page45IEA.CCBY4.0.Coal2023SupplyAnalysisandforecastto2026ThedifficultbalanceofChina’scoalsupplythroughto2026Afterthepowershortages–partlyattributedtocoalshortagesandhighcoalpricesinrecentyears,particularlyin2021–China’scoalproductionhasramped-upsteeplysincesummer2021toavoidsimilarevents.Atthesametime,spurredbylowerpricesoninternationalmarketsandwiththeaimofreducingtheriskofshortages,Chinahasalsoincreaseditsimportssignificantly(see“Trade”Chapter).Indeed,thesuccessfulaccelerationofproductiontogetherwithincreasingimports,combinedwithslowergrowthincoalconsumption,haveresultedinasurplusofsupplyandconsiderablestockbuilding.Atpowerplantsalone,coalstockswerereportedtoamountto200MtinJune2023.Theexpectationoflowerdemandsignalsareductioninsupplythroughto2026,butthequestionisthedegreetowhichdomesticsupplyandimportswillbeaffectedbythecurrentglut.Toaddressthisquestion,weneedtoconsiderthat2023willhaveseenwellover1.2billiontonnesofcoal–over800Mtfromdomesticminesandalmost4006Mtfromimports–arrivingatChinesecoastalregions.Thearbitragebetweendomesticproductionandimportsisdeterminedbydifferentfactors.Firstisthecost.AsChineseproductionismovingtothewestofthecountry,sotransportcostsandthereforefinalcostsareincreasingtoo.However,thesecostincreasesonlypartiallyweighonthesupplyofdomesticcoal,asthecontractpolicyprotectsthedomesticmarketandstabilisesfinalprices.For2024theNationalDevelopmentandReformCommissionhasrequestedpowergeneratorstoprocure80%oftheircoalneedsviatermcontracts.Thissharehasbeenreducedcomparedwith2023owingtotheabundantcoalstockscurrentlyexistingatpowerplantsites.Moreover,onthesupplyside,allproductioncapacityapprovedsinceSeptember2021mustbesoldthroughtermcontractsinordertostabilisedomesticsupply.Conversely,thefavourablequalitycharacteristicsofsomeimportedcoal(e.g.Indonesiancoalwithalowashandsulphurcontent)makeitbeneficialtoblenddomesticandimportedcoalinsomeChinesecoalpowerplants,underpinningtherequirementforimports.Weexpectbothcoalproductionandimportstodecreasethroughto2026,butthisissomethingthatweneedtomonitorandwilladjustaccordinglyinthefuture.InadditiontotheuncertaintyabouttheperformanceoftheChineseeconomy,increasinglyweather-dependentelectricitysupplyanddemandarefurtherincreasinguncertainty.Indeed,currentlyabundantcoalstocksareaprotectionagainsttheweathervagaries.6Totalimportsareover400Mt,whichincludesomeland-basedimportsfromMongoliaandRussia.IEA.CCBY4.0.Page46Coal2023SupplyAnalysisandforecastto2026Chinesepolicycurrentlycontinuestoincentivisehighproductionquantities.However,aninitialindicationoflowerproductionvolumesiscentralauthoritiescommentingonthedeteriorationofdomesticcoalquality,whichhasbeeninducedbyfactorssuchasminingareaswithlowerqualityorlowerwashingratiostofulfilproductiontargets.Itisimportanttonotethatthequalitydeterioration(i.e.decliningcalorificvalue)discussedinthedemandsectionisindependentofthesupply-demandimbalance,asbothproductionandconsumptionaremeasuredintonnes.Inasituationofoversupply,thepushtoincreaseoutputwillmoderateandthereturntoqualityversusquantitywillalsohelpbalancethemarket.WeforecastChinesecoalproductiontostartitsdownwardstrendfrom2024onwards,inlinewiththedevelopmentofdemand.Weexpectcoalproductiontodeclineby1.4%annuallyto4250Mtin2026.However,inDecember2023theChinesegovernmenthasdecidedtoestablishaminingcapacityreserveof300Mtpastartingin2027,butthisisafterourforecastperiod.Coalproductionbyyear,China,2021-20264600Mt202120222023202644004200IEA.CCBY4.0.IEA.CCBY4.0.400038003600340032003000Indiasurpassesthe1billiontonneproductionmarkandcontinuesitsgrowthIn2022,India’sdomesticcoalproductionrosetoabout922Mt,up12%comparedto2021.ByboostingdomesticproductionIndiatriedtoavoidsupplyshortagesandreduceimportdependencyamidthehigh-priceenvironmentandinviewofrisingdemand.At99%,almostallofIndia’sdomesticproductionisthermalcoalandlignite7;in2022ittotalledclosetoabout915Mt.7Inthisreport,cokingcoalusedforthermalpurposesisconsideredthermalcoal.Page47Coal2023SupplyAnalysisandforecastto2026India’scoalsectorcanbedividedintothreecategories:public,captive,andcommercialmining.Inthepublicsector,twostate-ownedcoalminingcompanies–CoalIndiaLtd(CIL)andSingareniCollieriesCompanyLtd(SCCL)–arethemainproducersofhardcoal,whereasstate-ownedNLCIndiaLtdproduceslignite.CIL,whichaccountsforabout80%ofdomesticcoalproduction,contributedthree-quartersofthetotalgrowthseenin2022,recordinga12%increaseinproduction.CILisplanningtocontinueproductiongrowthandMineDeveloperscumOperators(MDOs)areakeypillarofitsstrategy.CILisincreasinglyusingMDOs,andithasatargettooutsource90%ofproductioninfiveyears.Thecaptivecategoryincludesmines,servingdemandfromindustrialorpowerfacilitiesowningthemines.Whiletheshareofcaptiveblocksisonly12%ofIndia’scoalproduction,theyhavegrownataremarkablepace,up27%inthefirsteightmonthsof2023.NTPC,thelargestpowerproducer,isrampingupproductioninitscaptiveblocksatarapidpace.InFY2023,theyincreaseditsoutputby65%upto23Mt,withplansforfurthergrowth.Weanalysethedevelopmentinthecommercialcategoryinthesectionbelow.Weexpectcoalproductionin2023tohavefurtherincreasedbyabout11%toatotalof1027Mt,surpassingthe1billiontonnemarkforthefirsttime.Thisestimateisbackedbyanotherrecordinmonthlyproduction:accordingtoIndia’scoalministry,monthlycoalproductionexceeded100MtforthefirsttimeinMarch,totalling107Mt.Inadditiontothat,weaker-than-usualmonsoonsinSeptembersupportedcoaloutput.Monthlycoalproduction,India,2016-2023120Mt100IEA.CCBY4.0.806040200NovDecJanFebMarAprMayJunJulAugSepOct2023Range2016-20212022IEA.CCBY4.0.Source:IEAestimatesbasedonMcCloskey(2023).McCloskeyCoal,MetalsandMiningServicePage48Coal2023SupplyAnalysisandforecastto2026DomesticproductionisbeingsupportedbyextensiveinfrastructureinvestmentsofaboutUSD3billionbyCILthroughtotheendofFY2029inviewofexpectedgrowthincoaldemand.Investmentisplannedtoimprovethefirstmileconnectivityofmines,addingpipeconveyorswithacombinedcapacityofabout764Mtpa.Furthermore,withthecompletionofthe1337kmEasternDedicatedFreightCorridor,coalfromtheeastofIndiacannowaccessthenorthernregionsinhalfthetimeittookbeforeitscompletion.AnotherinitiativethatmayeasetransportcostsistheRail-Sea-RailStrategy,whichaimstointegraterailandsearoutesinordertoreducecostsandimprovetheefficiencyofcoaltransport,inparticularfromOdisha,ChhattisgarhandJharkhandtothewesternregions.Withcoaldemandsettoriseintheyearsahead,mainlydrivenbyincreasedcoal-firedpowergeneration,weexpectcoalproductiontoincreaseaccordingly.ThestrategicfocusoftheIndiangovernmentonreducingitsimportdependencyislikelytoleadtogrowthindomesticsupplysurpassinggrowthindemand.Weanticipateproductiongrowthof156Mtby2026,outputtotalling1183Mt.InNovember2023theCoalMinistryannouncedplanstoincreaseproductionto1.4billiontonnesinFY2027.Theministryestimatesarequirementof400Mtpatofeed80GWofnewcapacity,althoughactualconsumptionmaybelowerdependingonthecontributionofrenewablesandthedevelopmentofelectricitydemand.Therefore,wewillmonitordevelopmentsinthesector,andpotentiallyreviewourproductionforecastupwardinthefutureifneeded.Annualdomesticcoalproductionbycompany,India,2021-20261400Mt12001000IEA.CCBY4.0.80060040020002021202220232026CILSCCLOtherForecastIEA.CCBY4.0.Sources:IEAanalysisbasedonMcCloskey(2023),IEAestimates.Page49Coal2023SupplyAnalysisandforecastto2026CommercialminesinIndiaareprogressingfasterthanexpectedTheIndiangovernmentdecidedtopartiallyendCIL’smonopolyinthecoalminingsectorin1993byopeningittoprivatecompanies,thereforeenablingcaptiveblocks.In2015thepossibilityofcommercialsaleswasapprovedinordertoboostdomesticproduction.Theaimwastoclosethegrowinggapbetweendemandandproduction,whichwasincreasingthevolumeofimports,andtoincreasethecoalsector’scompetitivenessandspurindustrialdevelopment.Themechanismfortheallocationofminesiscurrentlyorganisedintheformoftenders,withthefirsttranchehavingbeenlaunchedinJune2020.Sevenauctionroundshavebeencompletedsuccessfullyandtheeighthroundwaslaunchedon15November2023,offering39mines.Atotalof91mineshavebeenallocatedtobiddersinthesevenauctionsthathavebeencompleted.Thevastmajorityofofferedandallocatedminesarethermalcoalmines,servingdemandfromcaptiveoron-gridcoalpowerplants.Thecumulativepeakratedcapacity(PRC)oftheallocatedminesthathavebeenfullyexploredtotalsaround221Mtpa,whichismorethan20%ofIndia’scurrentannualcoalproduction.Thisnumbershouldincreaseoncetheexplorationoftheremainingminesiscompleted.Thehighestnumberofcoalmineswasallocatedinthesixthauctioninthefirsthalfof2022,totalling22exploredmineswithacombinedPRCof75Mtpa,andsevenunexploredmines.However,thenumberofminesofferedineachroundhasbeendisproportionallyhigherthanthenumberofminesallocated,asmanysitesareindeepforestanddifficultterrain,andthereforestruggletofindbidders.Thisisespeciallytrueforthelatestauction,inwhichonlysixoutof106mineswereallocated.Toattractmorebuyers,theIndiancoalministryhasprepareddronevideosforthenextauction,givingbuyersanideaofthemines’topography.Page50IEA.CCBY4.0.Coal2023SupplyAnalysisandforecastto2026Commercialcoalauctionresults,numberofminesandPRC,India160250NumberofminesMtpa1402001201001508060100405020001st2nd3rd4th5th6th7thauctionauctionauctionauctionauctionauctionauctionNotallocated(leftaxis)AllocatedunexploredAllocatedexploredAllocatedcumulativePRC(rightaxis)IEA.CCBY4.0.Note:AllocatedcumulativePRCexclusivelyshowsPRCoffullyexploredmines.Sources:IEAanalysisbasedonIndia,MinistryofCoal(2023),ArgusMediaGroups.Allrightsreserved.Therangeofcompaniesthathaveplacedsuccessfulbidsinthelastsevenauctionsisdiverse.Amongthemarebignameslikestate-ownedNLCandstockmarketquotedJindalPower,butalsocaptiveindustrialconsumersandseveralsmallercompanieswithlittleexperienceincoalmining.Incontrasttosomeexpectations,theauctionedcommercialcoalminesareprogressingataremarkablepace.Already,fiveoutofthe91allocatedmineshavecommencedoperations,despitebeingacquiredonlythreeyearsago.Fourmoremineshaveobtainedallthenecessarypermissionsandarepoisedtocommenceproductionsoon,signallingthatthecommercialcoalauctionmechanismisasuccessfulstrategyforIndiatoboostitsdomesticproductionandreduceimportdependency.OutputinIndonesiaisdrivenbydomesticandinternationaldemandIndonesia’scoalproductionrosebyabout20%to687Mtin2022.Thecountrywasoneofthefewcoalexportingnationstosignificantlyincreaseproductiontosupplytheextraordinarilytightcoalmarketsseenin2022.Thiscomesdespiteanexportbaninearly2022causingsomeminerstoholdoutputbackandintenserainfallpartiallydisruptingminingoperations.For2023,weestimateIndonesianproductiontohavecontinueditsgrowthto725Mt,surpassingthenationaltargetof695Mtby30Mt,andthe700MtmarkPage51IEA.CCBY4.0.Coal2023SupplyAnalysisandforecastto2026forthefirsttimeever.However,annualgrowthcomparedto2022isestimatedtohaveslackened.Indonesiaexportsabout70%ofitscoal,thevastmajorityofwhichislowcalorificvalue(CV)thermalcoalservingdemandmostlyfromChinaandIndia.Bothexportmarketsarelikelytohaveseenrecordlevelsofcoalimportsin2023,withIndonesiaincreasingproductiontomeetseabornedemand.Nonetheless,someIndonesianminingcompanieshaveconsideredproductioncutsinresponsetomarketpricesapproachingproductioncostlevels.Furthermore,Indonesia’scoalinfrastructurestillfacesinefficiencies,forexampletheJambiprovinceislikelytohavefallen50%shortofits36Mtproductiontarget,asinadequatetransportcapabilitiesconstraincoaloutput.Inthenextthreeyears,weexpectIndonesianaggregatecoalproductiontodecline,assignificantreductionsinexportsmorethanoffsetgainsindomesticcoalconsumption.ReducedseabornedemandistriggeredbyIndiatryingtoloweritsimportdependencyandbyanall-timehighinChinesecoalproduction.Overall,weexpectareductionof64Mtby2026,downto661Mt.Changeincoalproductionandtotalcoalproduction,Indonesia,2022-2026150800Mt700Mt6005001004003005020010000-502022-100-150202220232023-20232026Metcoal(export)2026Thermalcoal(export)IEA.CCBY4.0.Thermalcoal(domesticconsumption)TotalForecastAustraliancoalproducers:BetweengloomydomesticdemandandthemoreattractiveseabornemarketAustralia’scoalproductionslightlydecreasedin2022by3.7%,asLaNiñacausedadverseweatherconditionswithfrequenttorrentialrainfallandminefloodings,andastheaftermathoftheCovid-19pandemiccontinuedtoweighontheindustry.Page52IEA.CCBY4.0.Coal2023SupplyAnalysisandforecastto2026AfterthreeconsecutiveyearsofLaNiña,AustraliaexperiencedElNiñoforthefirsttimeinsevenyearsin2023.ElNiñoisassociatedwithhotteranddryerweatherconditions,creatingbetteroperatingconditions.Atthesametime,ahigherriskofbushfirescouldaffectproduction,andminesarestillreportedtofacelabourshortages.ChinaliftingitsunofficialbanonAustraliancoalimportsinearly2023sentapositivesignalforAustralianproduction.However,ChinesedemandforAustraliancoalremainsbehindexpectations,asotherworldregionssuchasRussiaandMongoliaaremorecost-competitive.IncreasingmetcoaldemandinIndia,causedbysurgingsteelproduction,isbeingmetbyhigherimports.DemandfromJapanremainedstalledthroughout2023,weighingonAustralianmetcoalproduction.Againstthisbackground,weestimateproductiontohaveslightlydecreasedthisyeartoabout439Mt.Changeincoalproductionandtotalcoalproduction,Australia,2022-202620500Mt450Mt10400350IEA.CCBY4.0.0300250-10200150-20100-30500-402022202220232023-20232026Metcoal(export)2026Thermalcoal(export).Thermalcoalandlignite(domestic)TotalIEA.CCBY4.0.ForecastThroughto2026,weforecastAustralianthermalcoalandligniteproductiontocontinueitsdecline,asnewthermalcoalprojectsfaceincreasingheadwindsinlightofpressurefromenvironmental,social,andgovernance(ESG)standards,andfromfinancingandinsuranceissues,aswellasdomesticdemandforthermalcoalandlignitebeingonadownwardtrajectory.Inaddition,demandfromJapan,aprimarydestinationforAustralianhigh-CVthermalcoal,iscontractingoverthenextthreeyears.Asaresult,weexpectadeclineinthermalcoalandligniteproductionof33Mt,downto250Mtin2026.Weforecastmetcoalproductiontoriseagainthroughto2026,withsomenewminescomingonline,reaching159Mtby2026.Page53Coal2023SupplyAnalysisandforecastto2026RussiancoalproductionisshiftingtotheeastwithexportsIn2022Russia’scoalproductionremainedstableatabout444Mt(up0.3%).ThesanctionsimposedonRussiainresponsetoitsinvasionofUkraineandeastboundrailwaybottleneckshindereditfromextendingproductiontobenefitfromhighglobaldemandandcoalprices.ThegeopoliticalsituationfurtherimpliedashiftinproductionwithinRussiafromcentralandwesternpartsofthecountrytotheeast.For2023weestimateRussia’scoalproductiontohaveincreasedby2.9%to457Mt.ItsdecisiontointroduceanexportdutyoncoalfromOctober2023islikelytoputpressureonexportsandproduction.Also,rearrangingsupplychainswiththeshifteastwardsmaystillcausedisruptionstoproduction;during2023,railwaydeliveriestowesternandsouthernexportterminalswererestricted.Butoverall,China’sappetiteforRussiancoalislikelytohavesupportedRussianproduction,especiallyintheeast.However,forecastsforRussiaaredifficultunderthecurrentwartimecircumstances.Upto2026weexpectcoalproductionincentralRussiatodecline,whereaseasternproductionsitesshouldcontinuetoincreaseoutput,therebystrengtheningtieswithChina.Butasglobalseaborneimportdemandarelikelytodeclineinthenextthreeyears,thiswillhaveanimpactonRussianexports,andthusonproduction.WeexpectaggregatecoalproductioninRussiatodecreaseby18Mtto439Mt.Changeincoalproductionbyregionandintotal,Russia,2022-202615Mt20232023-5002023202610Mt20264504005IEA.CCBY4.0.3500300-5250-10200-15150-20100-2550202202022CentralEastWestTotalForecastIEA.CCBY4.0.Sources:IEA,adaptedfromCRU(2023),CoalCostModel(database).AndIEAestimates.Page54Coal2023SupplyAnalysisandforecastto2026MongoliaalsoregardsChinaasitsprimarycoalexportdestination.Newrailwaysenablinghigherexportsprovidepositivesignalsformorecoalproduction.Weforecastproductiontomorethandoubleby2026comparedto2022,reaching84Mt.UScoaloutputisbackonadownwardtrajectoryDespiteattractiveexportmarketconditions,coalproductionintheUnitedStatesrosebyonly3%to539Mtin2022.Persistentsupplychaindisruptionsandtightlabourmarketsweighedoncoaloutputandlimitedproductiongrowth.Afterseeinggrowthin2022,weexpectUScoalproductiontohavereturnedtoadecliningtrendin2023,fallingby10%comparedto2022.Thedeclineinproductionishalfofthedeclineinconsumption,owingtodomesticstockbuildingandhigherexports.TheEnergyInformationAdministration(EIA)expectsstockpilingin2023toreachabout47Mt,mostlyatpowerplantsites.ManyUScoalplantsareunderlong-termcontracts,ensuringsteadysupply,butcoal-firedgenerationhasturnedoutlowerthanexpected,resultinginsurpluscoal.Thewesternregionhasbeendisproportionallycontributingtothereducedproduction,withtheWestElkmineinColoradoexperiencinggeologicalissues,andinUtahpartialclosuresoftheLilaCanyonmineandalongwallmoveattheSkylinemineslowingproduction.Forourforecastperiod,weexpectthesteepdeclineincoal-firedpowergenerationtocontinuetoweighoncoaloutput,causingreductionsinallkeyminingregions.Forthenextthreeyears,weforecastareductionofalmost11%peryear,withproductiontotalling346Mtin2026.Coalproductionbyregion,UnitedStates,2008-20261200Mt1000IEA.CCBY4.0.80060040020002010201220142016201820202022202420262008InteriorregionWesternregionForecastAppalachiaregionIEA.CCBY4.0.Source:IEAestimatesbasedonUSEIA(2023)Coaldata.Page55Coal2023SupplyAnalysisandforecastto2026InternationalmarketsarethemaindriversforColombiaandCanadaDespitehighexportprices,Colombia’scoalproductionslightlydecreasedby2.8%toabout54Mtin2022.AdverseweatherconditionsandprotestsatElCerrejón,thelargestcoalmine,weighedheavilyonthecountry’scoaloutput.For2023weestimatecoalproductioninColombiatohavesurgedbyaremarkable18%to64Mt,drivenbyfavourableweatherconditionsinminingregions.Glencore’soutputisreportedtohaverecoveredfrom2022’sdipbyincreasingproductionattheCerrejónmineby5Mt,whereasoutputfromDrummondInternational’sElDescansomineisexpectedtohavegrownby4Mtin2023.Meanwhile,thefutureofthecountry’scoalminingindustryisbeingdebated.PresidentGustavoPetro,electedlastyear,isseekingtoacceleratethecountry’senergytransition,andissuedpresidentialdecreesimposingabanonnewcoalminesandexpansionprojectsinthedepartmentofLaGuajira.ThesewereoverruledbytheConstitutionalCourt,buttheenvironmentministryisabouttoissueanotherdecreedelimitingopenpitcoalmining,underliningthegovernment’sdesiretoendcoalmining.There-openingofminesclosedbyProdeco(LaJaguaandCalenturitas)isveryunlikely.Againstthisbackground,weexpectcoalproductiontodecrease7%annuallyinthenextthreeyearsto52Mtin2026.Coalproductionbycompany,Colombia,2021-2023,andforecastproduction,202670Mt60IEA.CCBY4.0.504030201002022202320262021TotalDrummondInternationalGlencoreOtherIEA.CCBY4.0.Source:IEA,adaptedfromCRU(2023),CoalCostModel(database).Page56Coal2023SupplyAnalysisandforecastto2026Canada’scoalproduction,whichischaracterisedbyalmostequalvolumesofthermalandmetcoal,decreasedbyabout2.1%toalmost47Mtin2022.In2023,weestimatemetcoalproductiontohaveincreased,therebypushingtotalCanadianproductionupto49Mt.InlightofCanada’scoal-firedgenerationphase-outanditsplantoendthermalcoalexportsby2030,metcoalprojectsarefavouredoverthermalcoalprojects.Basedonthistrend,weexpectmetcoalproductiontoslightlydecreasefrom29Mtin2023to27Mtin2026,andthermalcoalandligniteproductiontodeclinefasterfrom20Mtin2023to13Mtin2026.TeckResourceshasjustagreedonthesalesofitscoalbranchElkValleyResources.Sofar,theeffectofthisoperationonfuturecoalproductioninCanadaisnotclear.EUligniteproductionre-entersitsphase-outcourseAmidtheenergycrisisanddrivenbyelevateddemandforcoal-firedpowergeneration,coalproductionintheEuropeanUnionroseforthesecondconsecutiveyearin2022growingby17Mtto349Mt(up5%).Theoutputincreasewasdrivenbya7%riseinligniteproductionwhichmakesup84%oftheEuropeanUnion’soverallcoalproduction.Bycontrast,productionofsteamcoal(down4%)andmetcoal(down6%)decreased.Germany(37%share)andPoland(31%share)arethetwolargestcoalproducersintheEuropeanUnion.Germany,whichonlyproduceslignite,increasedoutputstoabout131Mt(up4%).Meanwhile,inPolanddecreasingsteam(down4%)andmetcoalproduction(down2%)compensateditsincreaseinligniteproduction(up4%).TheincreaseincoalproductionwasledbyBulgaria,whichrecordedasubstantial26%growthinligniteproductionto36Mt(up7Mt).BulgariaovertookCzechia(35Mt)tobecomethethird-largestcoalproducerintheEuropeanUnionin2022.InCzechia,increasesinligniteproduction(up14%)werepartiallyoffsetbydeclinesmetcoalproduction,resultinginanoverallincreaseof11%.Page57IEA.CCBY4.0.Coal2023SupplyAnalysisandforecastto2026Year-on-yearchangeincoalproduction,EuropeanUnion,2022-202620%40Mt2010%00%-20-10%-40-20%-60-30%-80-40%20222023202420252026Metcoal(leftaxis)SteamcoalLigniteForecastLignite(rightaxis)ForecastIEA.CCBY4.0.Withdemandforlignitedropping,productionshouldfollowasimilartrend.WeconsidercoalproductionintheEuropeanUniontohaveseenareversalof2022’scrisis-drivenuptick,plungingbyanestimated74Mtor21%in2023.Inthenextthreeyears,weexpectEUcoalproductiontocontinueitsphase-outcourse,withannualdeclinesbetween13Mtand26Mtresultingintotalcoalproductionof221Mtin2026.WedonotaccountforproductionatthenewWoodhouseCollieryintheUnitedKingdomgiventheuncertaintieslinkedtotheproject,butwewillrevisethisinthefutureiftheprojectgoesahead.ThepatternofdeclineisprincipallydrivenbyGermaneffortstophaseoutligniteanditstargettogenerate80%ofitselectricityfromrenewableenergyby2030.Conversely,weexpectmoderatereductionsinPoland,withligniteproductiondownby6Mtuntil2026.Elsewhere,productionshouldfollowconsumption,whichisdeterminedbylignite-firedpowergeneration,ashardcoalproductionisnegligibleoutsidePolandandCzechia.SouthAfrica’scoalproductionremainsconstrained–notonlybytransportinfrastructureOwingtopersistentinfrastructureissuesanddemanddestructionmostlyduetothewideunavailabilityofdomesticcoalpowerplantsafteryearsofpoormaintenance,coalproductioninSouthAfricaremainedstableatabout230Mt(up0.6%)in2022,despitepricesreachingrecordlevelsinoverseasmarkets.Page58IEA.CCBY4.0.Coal2023SupplyAnalysisandforecastto2026Coalproductioncontinuestobeaffectedbyamalfunctioningtransportsystem.Thenationalrailwayoperator,Transnet,hasrecordedmultiplesevereinterruptionsinrecentyears,includingderailments,strikes,locomotiveshortages,hackingandcabletheft.Duetotheseongoinginterruptions,coalproducersincreasinglyusetrucktransport,whichislessefficientthanrail.Giventhecontinuedissuesincoaltransportinfrastructureanddemandfromthepowersectorplungingonrecordlowavailabilityofcoalplants,weestimatecoalproductionin2023tohavedeclinedby3%to223Mt.Upto2026,weexpectSouthAfrica’scoalproductiontostabiliseatcurrentlevels,asweassumemoderategainsincoaldemandtobeoffsetbyamoderatedecreaseinexports.Amidlastyear’shighprices,coalproductioninotherAfricancountriesroseby31%to28Mtin2022.ThecountriescontributingthemosttothisincreasewereZimbabwe(up2Mt),Mozambique(up2Mt),Tanzania(up1.5Mt)andNigeria(up0.5Mt).TheBotswanangovernmentsupportsdiversificationawayfromdiamondmining,andprojectsunderconsiderationareprogressing(see“Coalminingprojects:Export”Chapter).Nonetheless,wetakeacautiousapproachandwillmonitorthedevelopment.Ifprojectsgoahead,wewillreviseourestimateupwardinthefuture.OtherAfricancountriesseemunlikelytokeepcoalproductionathighlevels,andthereforeweexpectaggregatedcoalproductioninthesemarketstoremainalmostconstantuntil2026.Page59IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026TradeInternationalcoaltradetowardsanewhistoricalrecordIEA.CCBY4.0.in2023Internationaltradeincoalroseto1376Mtin2022,upby1%fromthepreviousyear.Tradedcoalaccountedforabout16%ofoverallcoaldemand.Withashareofabout77%,mostofthetradedcoalwasthermal,risingby1.6%in2022,whilethetradeinmetallurgicalcoalslightlydecreasedby1%.Totalseaborneexportsrosetoabout95%ofallexports.Theglobaltradeincoaliscontinuingitsshifteastward.WhiletraditionallythecoaltradewasconcentratedinthePacificandAtlanticbasins,thevolumescurrentlytradedacrosstheIndianOceanaregreaterthanthoseintheAtlanticBasin,drivenbyongoingdemanddeclinesinEuropeandincreasingdemandfromIndia,PakistanandBangladesh.About78%ofallexportsaredirectedtocountriesintheAsiaPacificregion.In2022,thelargestimporteroutsideAsiawasGermanyatabout42Mt,up10%comparedto2021,drivenbyelevateddemandandsecurityofsupplyconcernsafterRussia’sinvasionofUkraineandtensionsinthegasmarket.At471Mtanda34%shareofglobalexports,Indonesiawasthelargestexporterbyvolumein2022,followedbyAustraliaatatotalof344Mtrepresentingaboutaquarterofglobalexports.Forthefirsttime,Indonesiaalsobecamethelargestexporterinenergyterms,overtakingAustralia,whichexportscoalwithanaverageCVmorethan25%higherthanIndonesia.Atabout224Mt,Russiawasthethird-largestexporter.Russia’swaragainstUkraineandthesubsequentinternationalsanctionsagainstitledtoareshufflingofcoalsupplychainsandafurthershiftofexportsfromland-basedtoseabornetransport.Sanctionsaffecttheconductofbusiness,suchasexclusionfromtheinternationalpaymentserviceSWIFT,aswellasphysicaldeliveries.TheEuropeanUnionimposedabanonRussiancoalimportsstartingwithabanonnewcoalpurchasesfromRussiafromApril2022.Thebancameintofulleffecton10August2022,whenallphysicaldeliveriesfromRussiawerehalted.Before2022,Russiaexportedabout33MtofcoalbyrailmainlytoUkraine,Poland,GermanyandChina.FollowingtheonsetofthewarandtheEUban,Russia’sexportsbyrailcontractedby75%,withmainlyChinaremainingforland-basedexports.TostrengthenitstieswithChina,Russiaisinvestingineastboundrailwayprojects.InNovember2022theTongjiangBridgebetweenRussiaandChinaopened,andfurtherprojects,includinganotherbridgeacrosstheAmurRiver,havebeenapproved.Page60Coal2023TradeAnalysisandforecastto2026In2023globalcoalexportsareexpectedtohavereachedanall-timehighofabout1466Mt.GlobaltradehasfurthershiftedtoAsia,withabout83%ofimportsbeingdirectedtotheAsiaPacificregion.ChinaandIndiaareexpectedtohaveincreasedtheirsharetoabout47%ofglobalimports.ChinaespeciallybenefitsfromcheapcoalimportsfromneighbouringcountriessuchasRussia–tradingcoalatadiscountduetosanctions–andMongolia,whichlacksalternativebuyers.WeestimateChina’soverallcoalimportstohaveincreasedby50%to451Mtin2023,althoughfinalnumberscanchangeasChina’simportsinDecemberarehistoricallyveryvolatile.Atthesametime,Russia’sdependencyoncustomersinChinaandIndiaisincreasing.Inthefirstninemonthsof2023,about60%ofcoalexportsfromRussiaweredirectedtoChinaandIndia.Exportdestinationsasashareoftotalexportsperyear,Russia,2016-2023100%80%60%40%20%0%20172018201920202021202220232016ChinaJapanKoreaEuropeanUnionIndiaASEANChineseTaipeiOtherTürkiyeIEA.CCBY4.0.2023isbasedonJanuarytoSeptemberdata.Source:IEAestimatesbasedonIHSMarkit(2023),CoalPriceDataandIndexes.Throughto2026,weexpectglobalcoaltradetodeclinebyabout12%,drivenbygrowingdomesticproductionincoal-intensiveeconomiessuchasChinaandIndiaandcoalphase-outplanselsewhere,suchasinEurope.Whilethermalcoalexportsareexpectedtodeclinebyabout16%by2026,exportsofmetcoalareexpectedtoslightlyincreasebyalmost2%.Page61IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026Thermalcoaltradeisexpectedtohavepeakedin2023,whilemetcoaltradeflattensoutafter2023Thermalcoaltradedevelopments,exportsbydestination,2021-2026Mt120024%18%90012%6%6000%-6%300-12%-18%0-24%-300-600-900-1200202120222023202420252026Restofworld(leftaxis)ChinaIndiaForecastAnnualgrowth(rightaxis)ForecastIEA.CCBY4.0.Metcoaltradedevelopments,exportsbydestination,2021-2026Mt120024%90018%60020212022202320242025202612%3006%00%-6%-300-12%-600-18%-900-24%-1200Restofworld(leftaxis)ChinaIndiaForecastAnnualgrowth(rightaxis)ForecastIEA.CCBY4.0.Page62IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026ThermalcoalAmidhighprices,thermalcoaltradeincreasedin2022Asexplainedinthe“Demand”Chapter,amidtheenergycrisisandextraordinarilyhighgasprices8in2022,globalcoaldemandgrewstrongly.However,thelargestconsumers,ChinaandIndia,ramped-updomesticproduction,andtherefore,globaldemandgrowthonlypartiallytranslatedintoincreasedthermalcoaltrade.Thermalcoalexportsroseto1056Mt,up1.6%comparedto2021,andcoalimportsremainedconstant.9Theshareofthermalcoaldemandmetbyinternationalthermalcoaltradestoodat14%.ThetradeinthermalcoalispredominantlyconcentratedintheAsiaPacificregion,withboththefivelargestimportersandthetwolargestexporterslocatedthere.In2022,theAsiaPacificregionwastheoriginof63%andthedestinationof84%oftheglobalthermalcoaltrade.Witha44%shareoftotalexports,Indonesiawastheworld’slargestexporterofthermalcoal,followedbyAustralia(17%)andRussia(16%).Toreduceexposuretohighmarketpricesandensuresupplies,ChinaandIndia,thetwolargestimportersofthermalcoal,increaseddomesticcoalproductionsignificantlyin2022.China’sthermalcoalimportsdecreasedby17%toabout237Mtduetoincreasedproduction.Despitehigherdomesticproduction,India’sthermalcoalimportsroseby22%to161Mt.At140Mt,Japanremainedtheworld’sthird-largestimporterofthermalcoal.ImportsintoASEANdecreasedby1.9%toabout117Mt,afterdeclinesinVietNam,ThailandandMalaysia.Incomparison,thegas-to-coalswitchingandenergysecurityconcernsdroveupthermalcoalimportsintotheEuropeanUnionby38%,anevenstrongerincreasethantheyearbefore,whenEUeconomieswerereboundingfromtheCovid-19-induceddecline.In2022,highpricesencouragedexporterstorampupcoalproductioninsomecountries,whileotherscouldnot,mainlyduetoinfrastructuralbottlenecksoradverseweatherconditions.Indonesiawasthemostflexiblethermalcoalexporter,rampingupproductionbyabout20%to681Mt.Incontrast,inAustralia,theworld’ssecond-largestthermalcoalexporter,thermalcoalproductiondecreasedby5%,ascoalproductionwasseverelyimpactedbyadverseweatherconditionsduetoLaNiña.Subsequently,Australia’sthermalcoalexportsdecreasedbyabout6%to181Mt.8Formoredetailsongasmarketsdynamics,seetheIEAGasMarketReport.IEA.CCBY4.0.9Importsandexportsdiffer,duetothetimelapsebetweendeparturesandarrivals,andreportingissues.Page63Coal2023TradeAnalysisandforecastto2026ExportsfromSouthAfricarosebyabout8%,althoughtheindustryhassufferedfrominfrastructuraldisruptionsinrecentyears.Incontrast,thermalcoalexportsfromRussia,thethirdlargestexporterofthermalcoal,decreasedby9%toatotalof173Mt,asthermalcoaloriginallydestinedfortheEuropeanUnioncouldnotbefullyredirectedelsewhereduetoeastboundinfrastructuralbottlenecks.ThermalcoalexportsfromtheUnitedStatesdeclinedby4.5%toabout35Mt,mainlybecauserailbottleneckshamperedUSproducers’abilitytobenefitfromhighinternationalprices.AmidEU’suptickinthermalcoalimportsin2022,SouthAfricaandColombiamadeupforlowerRussianexportsMaintradeflowsinthethermalcoalmarket,2022(Mt)IEA.CCBY4.0.Note:Mapvaluesarebasedonavailableexportdataanddonotnecessarilymatchimportnumbersduetoreportingtimes.Page64IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026Thedeclineindemandactsasadragonthermalcoaltradethroughto2026Thermalcoalexportsin2023areexpectedtohaveincreasedbyalmost6%toatotalof1118Mt,accountingforabout76%oftotalcoalexports.China’sthermalcoalimportsareexpectedtohavegrownby114Mt(up48%)to351Mt,drivenbyplummetingcoalpricescomparedtotheyearbeforeandamplecoaldemand.China’sramp-upofthermalcoalimportsisbackedbyendingtheunofficialbanonAustraliancoal.India’sthermalcoalimportsareforecasttohaverisenbyabout1.3%in2023,despitestrongexpansionofdomesticsupply.Nonetheless,toensurethesecurityofsupply,India’sgovernmentrevisedtheblendingmandateforimportedcoalupwardfrom4%to6%inOctober2023.Theregulationdirectspowerplantoperatorstoblenddomesticcoalwithimportedcoaltominimisetheriskofshortagesindomesticsupply.Atthesametime,thegovernmenturgedcoalmineproducerstomaximiseoutput.ImportsofthermalcoalintotheEuropeanUnionareexpectedtoreturntoadownwardtrajectoryin2023aftertwoyearsofincreases.Weestimatethermalcoalimportstohavefallenbyabout44%,to46Mt,alevelofdeclinelastseenintheCovid-19year2020.ThermalcoalimportsintoGermany,thelargestimporterintheEuropeanUnion,areestimatedtohavedecreasedbyabout38%,whilethesecond-largestimporter,Poland,islikelytohavemorethanhalveditsimports,althoughthisdependsontheperformanceofdomesticmines.Globalthermalcoalimportsareexpectedtohavepeakedin2023andthentofallto2026,inlinewiththepeakinglobaldemand.Globalthermalcoalimportchanges,2022-20261160Mt1120IEA.CCBY4.0.1080104010009609208808408002022-+2023-+2026ChinaIndiaJapanKoreaOtherAsiaEuropeanUnionRestofworldForecastTotalIEA.CCBY4.0.Page65Coal2023TradeAnalysisandforecastto2026Theoverallexpecteddeclineinthermalcoalimportsbetween2023and2026isledbyChina,withimportsdecliningbyabout110Mt(down31%),whileimportsintoIndiaareexpectedtodeclinebyabout27Mt(down17%).ImportsintoJapanareforecasttocontractby13Mt(down10%).ThermalcoalimportsintotheEuropeanUnionareexpectedtodeclineby20Mt(down44%).Seabornethermalcoalexportsareexpectedtohavesurpassedtheformer2019recordin2023,togetherwithoverallthermalcoalexports,asadecreaseintradeacrosstheAtlanticandIndianbasinswasmorethanoffsetbyincreasingtradeinthePacificBasin.Weexpectseabornetradein2023tohaveincreasedbyabout5%,withIndonesiaexportingcloseto500Mt,alevelneverreachedbyanycountrybefore.Afterthegrowthin2023,seabornetradeisexpectedtodecreasegloballybyabout16%by2026.Seabornethermalcoaltradechangesbybasin,2022-20261120Mt1080IEA.CCBY4.0.10401000960920880840800-+2023-+20262022IndianForecastPacificTotalAtlanticIEA.CCBY4.0.Russia’sexportsareincreasinglydependentonChinaRussia’sinvasionofUkraineledtosanctionsfrommainlyWesterncountries,whichinturnledtoareshufflingofthermalcoaltradeflowsin2022and2023.InApril2022,thegovernmentofJapandecidedtophaseoutRussiancoalimportsgradually.Consequently,importsofthermalcoalfromRussiafellby41%in2022.TheEuropeanUnionissuedabanonRussianimports,whichcameintofulleffectinAugust2022.Importsfellby49%.InAugust2023,theUnitedStates,JapanandSouthKoreadecidedtofurtherreducetheirdependencyonRussianenergyinatrilateralsummit.Page66Coal2023TradeAnalysisandforecastto2026Drivenbythesanctions,Russianexportdestinationscontinuetotrendeastwardsandbecomemorelimited.Inthefirstninemonthsof2023,theshareofthermalcoalexportsdirectedtoChinarosefrom28%inthepreviousyearto49%,indicatingahighRussiandependencyonChinesecustomers.ThermalcoalexportsfromRussiatoIndiarosebyabout19%,whileabout16%ofitsthermalcoalexportswenttoTürkiye.Atthesametime,raildeliveriestowesternandsouthernexportterminalshavebeenrestricted.Drivenbyadditionalinfrastructureprojectsunderconstruction,tieswithChinaareexpectedtostrengthenfurther.TotalexportsofthermalcoalfromRussiaareexpectedtostandat170Mtin2023(down2.2%).Monthlyy-o-ychangeinthermalcoalimportsfromRussiabydestination,2023Mt86420-2-4-6-8Jan-23Feb-23Mar-23Apr-23May-23Jun-23Jul-23Aug-23Sep-23ChinaJapanKoreaChineseTaipeiIndiaASEANTürkiyeEuropeanUnionUnitedKingdomOtherIEA.CCBY4.0.Source:IEAanalysisbasedonIHSMarkit(2023),CoalPriceDataandIndexes.ChinaandIndiaarepivotalforcoalexportersWeexpectIndonesianthermalcoalexportstohaveincreasedtoabout500Mtin2023,upbymorethan6%.Indonesia’sdomesticmarketobligationrequirescoalproducerstoprovideatleast25%ofoverallproductiontothedomesticmarket.Thisparticularlyaffectsthermalcoal,asitconstitutesabout99%ofoverallproduction.In2022,assomecompaniesdidnotcomplywiththeobligation,theIndonesiangovernmentissuedatemporarybanonexportsinviewofdepletingcoalstocksatpowerplantsinJanuary.Comparedwith2022,2023’sampledomesticproductionandreducedattractivenessofexports,owingtolowermarketprices,hasensuredsufficientsuppliestothedomesticmarket.Page67IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026ChinaisIndonesia’slargestbuyerofthermalcoal.In2021,China’sshareofIndonesianthermalcoalexportsrosetoaround45%.In2022,however,thissharedecreasedto37%asChinesebuyerswerereluctanttobuyhigh-pricedcoalfromtheglobalmarket.Instead,IndonesianthermalcoalwasmainlydirectedtoIndia.Inthefirstninemonthsof2023,thistrendisrevertedagain,astheshareofexportstoChinagrewto42%,whiletheshareofexportstoIndiafellbelow20%,downfrom26%in2022.ChangeinIndonesia’smonthlyy-o-ythermalcoalexportsbydestination,2023Mt302520151050-5-10-15Jan-23Feb-23Mar-23Apr-23May-23Jun-23Jul-23Aug-23Sep-23ChinaJapanKoreaChineseTaipeiIndiaASEANEuropeanUnionOtherIEA.CCBY4.0.Source:IEAanalysisbasedonIHSMarkit(2023),CoalPriceDataandIndexes.InAustralia,theLaNiñaweatherphenomenoncausedadverseweatherconditionsinrecentyears,withfloodingsinterruptingsupplychains.ThishasnowchangedtoElNiño,whichisassociatedwithhotteranddrierweather,andislikelytoimproveminingconditions.Totalthermalcoalexportsareexpectedtohaveincreasedby8%toatotalof196Mtin2023.Meanwhile,exportdestinationschangedagainin2023,asinFebruaryofthatyearChinaendeditsunofficialbanonAustraliancoal–inplacesincelate2020duetopoliticaltensions–andrampedupimportsfromAustralia.SouthAfrica’sthermalcoalexportsareexpectedtohavegrownby3%to69Mtin2023despiteongoingsevereinfrastructuraldisruptions.ElsewhereinAfrica,Tanzaniaincreaseditsexportsin2022,attractedbyextraordinarilyhighprices.WhileformerlyonlyexportingtootherAfricancountriesandIndia,asubstantialfractionofTanzania’stotalcoalexportswasdirectedtotheEuropeanUnionin2022.Withdecreasingglobalcoalprices,exportstotheEuropeanUniondriedupin2023.Page68IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026ThermalcoalexportsfromtheUnitedStatesareexpectedtohavegrownby14%in2023,toatotalof40Mt.TheUnitedStatesusedtobeaswingsupplier,supplyingwhenthemarketsweretightandinternationalpriceswentup.However,itislosingthisstatusduetoitsdecliningcoalindustryandthelackofflexibilityincoalproduction.Accountingfor30%in2021,IndiawasthelargestbuyerofthermalcoalfromtheUnitedStates.In2022,about31%ofitsthermalcoalexportsweredirectedtotheEuropeanUnion,upfromabout14%in2021,duetoampledemandandahighwillingnesstopay.Meanwhile,India’ssharedeclinedtoabout20%.Withpricesplunginginthefirstninemonthsof2023,thistrendreversedagainandtheshareofUSexportstoIndiaincreasedtoabout30%,whiletheshareofexportstotheEuropeanUniondecreasedto23%.Atthesametime,Colombianthermalcoalexportsareestimatedtohaveincreasedby0.9%in2023.Afterpeakingin2023,globalexportsofthermalcoalareexpectedtodeclineinlinewithglobaldemand.Totalthermalcoalexportsareforecasttofalltoabout941Mtin2026,wellbelowtheamountseenintheCovid-19year2020.ThedecreaseisdrivenbydecliningdemandandampledomesticsupplyincountriessuchasChinaandIndia.Theshareoftotalthermalcoaldemandmetbyexportsisexpectedtodecreasefrom15%toabout13%.Exportsfromallmajorcoalexportingcountriesaresettodecrease.Withadropofabout106Mt(or21%),Indonesianexportsareexpectedtoseethelargestdecrease,followedbyAustraliawithadecreaseof23Mt(or12%).Changeinglobalthermalcoalexports,2022-2026.1160Mt1120IEA.CCBY4.0.1080104010009609208808408002022-+2023-+2026ColombiaIndonesiaAustraliaRussiaSouthAfricaUnitedStatesRestofworldForecastTotalIEA.CCBY4.0.Page69Coal2023TradeAnalysisandforecastto2026MetallurgicalcoalJapan,KoreaandtheEuropeanUnionledthedeclineinmetcoalimportsin2022In2022,metcoaltradeflowsweresubjecttoreshuffling,drivenbythesanctionsimposedonRussia,althoughtheimpactwassmallerthanonthermalcoalgivenRussia’slowershareofglobalmetcoalexports.Thetradeinmetcoalslightlydeclinedbyabout1%to320Mt,withexportscoveringabout30%ofthetotaldemandformetallurgicalcoal.Thus,tradeplaysalargerroleinmetcoalthaninthermalcoal,althoughmetcoalaccountsforonlyaboutaquarteroftheoverallcoaltrade.Australiaisbyfarthelargestexporterofmetcoal,accountingforabout50%oftheexportmarketin2022,followedbyRussia(16%),theUnitedStates(13%)andCanada(9%).Thesefourcountriessuppliedover88%ofexportsinthehighlyconcentratedmetcoalmarket.Australia’smetcoalexportsdecreasedbyabout5%to163Mtin2022.Adverseweatherconditionsdisruptedsupplyandpushedpricestoextraordinaryhighs,reducingtheattractivenessofAustralianmetcoalforsomebuyers.India,thelargestbuyerofAustralianmetcoal,partiallymovedovertoRussiancoal,andreducedmetcoalimportsfromAustraliaby16%.Oneyearearlier,in2021,Indiahadtakenarecord54MtofmetcoalimportsfromAustralia,fuelledbyChina’sbanonAustraliancoal.Russia’smetcoalexportsslightlydecreasedto50Mt(down1%)in2022,withrobustdemandfromChina,replacingMongolianandAustraliancoal.Additionally,whentheEuropeanbanonRussiancoalcameintofulleffectinAugust2022,RussianexportstoIndiaincreasedstrongly.ItsmetcoalexportstoChinaandIndiaalmostdoubledin2022.In2022,Indiacontinuedtobetheworld’slargestimporterofmetcoal,withashareofabout21%andatotalofabout66Mt.Itsimportsgrewby5%comparedto2021,whenIndiasurpassedChinaforthefirsttime.Atabout20%andatotalofabout64Mt,Chinawasthesecond-largestimporterin2022.China’simportgrowthstated17%.Meanwhile,importsintoJapanremainedstableat44Mt,whileimportsintoKoreaslightlydecreasedto34Mt(down6%).ImportsintotheEuropeanUnionremainedstableataround46Mt,whileimportsintoASEANdeclinedby15%toabout20Mt.Page70IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026Russianmetcoalexportsadaptedtosanctionsandbansin2022Maintradeflowsinthemetcoalmarket,2022(Mt)IEA.CCBY4.0.IEA.CCBY4.0.Note:Mapvaluesarebasedonavailableexportdataanddonotnecessarilymatchimportnumbersduetoreportingtimes.AmpleappetiteinChinaandIndiahasdrivenmetcoalimportsin2023Weexpectglobalmetcoalimportstohaveincreasedbyabout11%,to352Mtin2023.TheincreasehasbeendrivenbyChinaandIndia,whichareforecasttohavesignificantlyincreasedmetcoalimports,withChinasurpassingIndiatobecomethelargestmetcoalimporteragain.China’simportsareexpectedtohaveincreasedby56%to100Mt,anall-timehigh,whileIndia’simportsareexpectedtohavegrownby17%to78Mt.DespiteendingtheunofficialbanoncoalimportsfromAustralia,ChinaonlymarginallyresumedmetcoalimportsfromAustraliainthefirstninemonthsof2023.Instead,largequantitiesofmetallurgicalcoalareimportedfromMongolia,asaraillinkbetweenthetwocountriesbeganoperatingandpandemicmeasuresattheborderwerelifted.Inthefirstninemonthsof2023,China’simportsfromMongoliaroseby131%,whileimportsfromRussiaroseby37%.Inthefuture,importsfromMongoliaareexpectedtoincreasefurther,asadditionalraillinesconnectingbothcountriesareunderconstruction.Page71Coal2023TradeAnalysisandforecastto2026ChangeinChina’smonthlyy-o-ymetcoalimportsbyorigin,20236Mt420-2-4-6Jul-23Aug-23Sep-23Jan-23Feb-23Mar-23Apr-23May-23Jun-23CanadaOtherAustraliaRussiaMongoliaUnitedStatesIEA.CCBY4.0.Source:IEAanalysisbasedonMcCloskey(2023),CoalPriceDataandIndexes.BenefitingfrompricediscountsonRussiancoal,IndiaisincreasinglyreplacingAustralianmetcoalwithRussian.Whilein2021about65%ofIndia’smetcoalimportswereofAustralianorigin,thissharedecreasedto53%in2022.Duringthesameperiod,theshareofimportsfromRussiaincreasedfrom5%to11%.Inthefirstninemonthsof2023,Australia’smetcoalsharewasdownto48%,whileRussia’ssharegrewto18%.Metcoaltradeisexpectedtoincreasebyalmost2%to353Mtin2026.Adecreaseofabout28Mt(or28%)inmetcoalimportsintoChinaisexpectedtobeoffsetbyincreasingimportselsewhere.ImportsintoIndiaareexpectedtoincreaseby2026,by16Mt(or21%),drivenbyincreasingsteelproductionviatheblastfurnace-basicoxygenfurnacerouteandlimitedavailabilityofsuitabledomesticcokingcoal.Againstthisbackground,Indiawilloncemorebecometheworld’slargestmetcoalimporter.Page72IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026Changeinmetcoalimports,2022-2026Mt360350340330320310300290280-+2023-+20262022JapanKoreaIndiaForecastTotalOtherAsiaChinaEuropeRestofworldIEA.CCBY4.0.Low-costmetcoalexportsfromMongoliaandRussiaweighonAustralianexportsGlobalmetcoalexportsareexpectedtohavegrownbyalmost9%to348Mtin2023.ExportsfromAustralia,however,areexpectedtorecordadeclineofabout6%to152Mt,despiteimprovedminingconditionscomparedtothepreviousyear.Amongotherfactors,atrainderailmentinJanuaryatthePortofGladstonecausedsupplychainissues,weighingonAustralianmetcoalexportsinthefirstquarterof2023.AfterChinaendeditsunofficialbanoncoalimportsfromAustraliainearly2023,ChinesebuyersonlypartiallyreturnedtoAustraliancoal.SmallincreasesinmetcoalexportstoChinaweremorethanoffsetbydecreasingexportstoASEANandIndia,whichdivertedtoRussiandeliveriesinthefirstninemonthsof2023.Page73IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026ChangeinAustralia’smonthlyy-o-ymetcoalexportsbydestination,2023Mt2.01.00.0-1.0-2.0-3.0-4.0-5.0Jan-23Feb-23Mar-23Apr-23May-23Jun-23Jul-23Aug-23Sep-23ChinaJapanKoreaIndiaASEANEuropeanUnionOtherIEA.CCBY4.0.Source:IEAanalysisbasedonMcCloskey(2023),CoalPriceDataandIndexes.WeexpectRussianmetcoalexportstohaveincreasedby2.2%to51Mtin2023,althoughthebuyerbaseforRussiancoalhasbeenshrinking.Russiaexportedabout22%ofitsmetcoalexportstoChinaandabout9%toIndiain2021.Thesesharesmorethandoubledto45%and18%in2022andweestimatethemtohaveincreasedfurther.Witharespectiveshareof49%and26%,ChinaandIndiaaccountedforthree-quartersofRussia’soverallmetcoalexportsinthefirstninemonthsof2023.ExportstoChinaroseby37%year-on-year,whileexportstoIndiamorethandoubled.Thegrowthofmetcoalexportsin2023haspredominantlybeendrivenbyMongolia,whichisforecasttohavemorethantripleditsmetcoalexports,backedbyablendofliftedpandemiccontainmentmeasuresattheborderwithChina,araillinkthatbeganoperationandadditionalminingcapacityrampingup.Mongolia’sexportsareexpectedtohaveincreasedby242%toabout48Mtin2023,mainlytoChina.Surprisingly,Mongoliacouldbecomethesecond-largestcokingcoalexporterafterAustralia.TheincreasewasdrivenbylargeappetitefromChina.TheTavanTolgoiExpansion,whichcommencedproductionin2023,hascontributedtothegrowth.Page74IEA.CCBY4.0.Coal2023TradeAnalysisandforecastto2026Changeinmetcoalexports,2022-2026Mt360350340330320310300290280-+2023-+20262022RussiaMozambiqueAustraliaForecastMongoliaCanadaIEA.CCBY4.0.UnitedStatesRestofworldTotalPage75IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026PricesandcostsPricesInternationalcoalpricesremainwellabovepre-crisislevelsCoalpricesreachedunprecedentedhighsin2022.TheyweredrivenbysurginggaspricescausedbyRussia’sinvasionofUkraine,whichunsettledthemarketandledtoawarpremium,aswellasinflexiblecoalsupplywhichsufferedfromadverseminingconditionsandinfrastructuralbottlenecks.Ingeneral,coalsupplychainsareefficientandwell-integrated;however,thereisnotmuchsparecapacity.Onthedemandside,soaringgaspricesdroveupcoal-firedpowergenerationinmanycountries,justaseconomiescontinuedtorecoverfromthepandemic.Onthesupplyside,inAustraliacoalproductionwasseverelyimpactedbyadverseweatherconditionsassociatedwithLaNiña,bringingheavyrainfallandflooding.MininginthestateofNewSouthWales,wherepredominantlythermalcoalismined,washitmostseverely,weighingonAustralia’sthermalcoalproduction.Meanwhile,SouthAfricacontinuedtograpplewithinfrastructuralshortageswhichimpededcoalproduction.Furthermore,followingtheEuropeanUnion’sbanonRussiancoal,aportionofRussiansuppliescouldnotbefullyredirectedtoalternativemarketsduetoconstraintsineastboundrailtransport.Temporarilyaddingtothemarket’soverallstrain,theIndonesiangovernmentimposedatemporaryexportbaninJanuary2022toaddressdomesticshortages,tighteningthemarketoflow-andmid-CVthermalcoal.Page76IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026USD/tThermalcoalpricesmarkers,2021-20235004003002001000NewcastleFOB(6000kcal/kg)ARACIF(6000kcal/kg)SouthChinaCFR(5500kcal/kg)IEA.CCBY4.0.Notes:ARA=AmsterdamRotterdamAntwerp.CFR=costandfreight.CIF=cost,insuranceandfreight.FOB=freeonboard.Newcastle=portontheeastcoastofAustralia.Source:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.Uptotheendof2021,pricemarkersforhigh-CVcoalfromAustralia,intheEuropeanUnion10andatportsinSouthChinaexhibitedsimilarpatterns.AfterOctober2021,whenChinastartedboostingitsproduction,thepricemarkersforAustraliaandtheEuropeanUnionontheonehand,andChinaontheother,divergedsignificantly.InMarch2022,AustralianandEUpricemarkerssurgedtounprecedentedhighs,surpassingUSD400/t11,fuelledbytightenedmarketsandtheunsettlingimpactofRussia’sinvasionofUkraine.Conversely,thermalcoalpricesinChinaenteredalowerpricepathasabundantdomesticsupplyinChinaeasedthemarketsegmentwithaCVofapproximately5500kcal/kg.AfterbrieflysurpassingtheUSD200/tmarkinMarch,pricesremainedbetweenUSD150/tandUSD180/tuntilOctober2022,beforestartingasteadydeclineandtoreachalevelofUSD100/tinMarch2023,stillapproximatelyUSD20/tabovepre-crisislevels.AfterthepriceshockinMarch2022,EUandAustralianmarkersshortlydippedbelowUSD300/tinApril,beforetheysurpassedtheUSD400/tmarkseveraltimes,drivenbyapersistentwarpremiumandaninflexiblesupplyside.WhilepricesinEuropemovedtoadownwardslopeinAugust2022,pricesinAustraliaremainedelevatedduetoongoingsupplyshortfallsandampledemand10Australia:NewcastleFOB.EuropeanUnion:Amsterdam,Rotterdam,Antwerp(ARA)CIF.11DailypricessurpassedUSD400/t.Thechartaboveshowsweeklyprices.Page77IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026forAustralian-qualitycoalfromeastAsia,e.g.fromJapan.PricesfelluntilearlyNovember,whenacoldspellinEuropepropelledgaspricesandrevivedcoal-firedpowergeneration.AustralianpricesreboundedtoaboveUSD400/t,whileEuropeanpricestaperedofftoaboutUSD260/t.Subsequently,EuropeanpricesconvergedwiththoseinSouthChina,whereasAustralianpricesdidnotdeclineuntilJanuary2023,whentheydippedjustbelowUSD200/t,approximatelyUSD40/tabovepricesintheEuropeanUnionandChina.Pricesstabilisedinthesecondquarterof2023atlevelsabovethoselastobservedinearly2021.Inthethirdquarterof2023,pricesforhigh-CVcoalfromAustraliastartedtotickupagain,drivenbyincreaseddemandfromJapantoreplenishcoalinventories.Spreadsbetweendifferentqualitiesofcoalremainabovepre-crisislevelsInthePacificBasin,thepricesforvariouscoalqualitiesaretypicallylinked.Thesecoaltypesarepredominantlydistinguishedbytheircalorificvalueinthecaseofthermalcoal.Nonetheless,intheyear2022,pricemarkersfordistinctcoalqualitiesexperiencedapartialdecoupling,drivenmostlybymarketturbulencecausedbyRussia’sinvasionofUkraine.Thedivergentpricetrajectoriesfordifferentqualitiesofthermalandmetallurgicalcoalindicatehowtheyrepresentdistinctmarketsegments,whichispartiallyduetotheiruse.Metcoal,characterisedbyitsphysicalpropertiesandgenerallyhighercarbonandenergycontent,ispredominantlyuseddirectly,forexampleinsteelproduction.Thermalcoalisbroadlycategorisedintolow-,mid-andhigh-CV12coalandispredominantlyusedinpowergeneration.Despitebeingdifferentcoalmarketsegments,thedifferentcoaltypescanpartiallysubstituteeachother:byblendinghigher-gradewithlower-gradecoal,adesiredaveragecalorificvaluecanbereached.However,thesubstitutionislimitedduetoexistingcontractsandtechnicallimitations.Forinstance,burningmetcoalinsteadofthermalcoalinpowerplantswouldbesubjecttotheflexibilityofhandlingsystems,mills,burnersandotherfactors.12Intermsofthermalcoal,wedistinguishbetweenlow-CV(4200kcal/kg),mid-CV(5500kcal/kg)andhigh-CVIEA.CCBY4.0.(6000kcal/kg).Page78Coal2023PricesandcostsAnalysisandforecastto2026PricemarkersfordifferenttypesofcoalinthePacificBasin,2021-2023USD/t7006005004003002001000NewcastleFOB(6000kcal/kg)Australianmetcoallow-volatileFOBNewcastleFOB(5500kcal/kg)IndonesiaFOB(4200kcal/kg)IEA.CCBY4.0.Note:FOB=freeonboard.Newcastle=portontheeastcoastofAustralia.Source:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.Thepricesofmetcoalandthermalcoalincreasedfrom2021untilMarch2022,reachingatemporarypeakinearlyOctober2021.However,theydidsoatdifferentrates.Therisingpriceofmetcoalwastriggeredbysupply-sidedisruption,mainlycausedbyadverseweatherconditions,whichtightenedthemarket,andampledemandduetoeconomicrecoveryafterthepandemic.BetweenMarch2021andMarch2022,thespreadbetweenmetcoalandhigh-CVthermalcoalincreasedfromaboutUSD15/ttoUSD342/t.AfterMarch2022themarketsfordifferentqualitiesofcoaldecoupled.Thespreadbetweenmetcoalandhigh-CVthermalcoaldiminisheduntilJune2022,assupplydisruptionsaffectingmetcoaleasedandpricesforthermalcoalroseamidthegascrisisandenergysecurityconcerns.Inthefollowingmonths,high-CVthermalcoaltradedabovemetcoalforthefirsttime,withthepremiumreachingamaximumofUSD218/tattheendofJuly2022.Atthatpoint,metcoalwaseventradedbelowmid-CVthermalcoal,somethingexceptionalgiventhedifferencesinqualitybetweenmetandthermalcoal.Acentraldriverforthesetrajectorieswastheseverescarcityinthehigh-CVmarketsegment,whichcouldnotberelaxedsufficientlyasthesubstitutionwithothercoalgradeshasbeenlimitedinpartduetothestrictqualityrequirementsofutilitiesinnortheastAsia.Pricesconvergedagaintowardsmid-November2022,butmarketdynamicswentbacktonormalonlyattheendofJanuary2023,whenpricesforthermalcoalplummeted,whilstpricesformetcoalincreased,supportedbyChinesebuyersPage79IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026resumingimportsfromAustraliainFebruary2023.Sincethen,metcoalhastradedatanaveragepremiumofaboutUSD109/tabovehigh-CVthermalcoal.ComparedtoAustralianpricesforhigher-CVcoal,low-CVIndonesiancoalpriceswereaffectedtoalesserextentbymarketturbulencein2022.Asoneofthemostflexiblecoalsuppliers,Indonesiamanagedtoexpandcoalproduction.Additionally,China’sdemandeasedinviewoffirmdomesticsupply,andIndonesiafacedhighercompetitionfromRussiaonthelow-CVmarket.Nevertheless,pricesin2022almostdoubledonaveragecomparedtothebeginningof2021.Atthebeginningof2023pricesstartedtodeclineagain,reachingpre-crisislevelsbymid-2023.Bymid-2023thespreadsbetweenthedifferenttypesofcoalwerestillconsiderablyhigherthanatthebeginningof2021.SinceSeptember2023,pricesforAustralianmetcoalhavesurgedmarkedlyaboveUSD350/tamidanuptickindemandfromIndiaandChina,whichisfacingtemporarymineclosuresafterrecentaccidentsinShaanxi.DiscountsforRussianhigh-CVthermalcoaldisappearAfterRussiainvadedUkraineinFebruary2022,severalcountriesrespondedwithsanctionsagainstRussia,includinganexclusionfromtheinternationalpaymentsystemSWIFT.Besidespaymentsforcoaltrades,cargoinsurancewasalsoimpededduetothesanctions.ArangeofcountriesbecamereluctanttobuyRussiancoalorevenimposedabanonimportingit,includingtheEuropeanUnion.AstheEuropeanUnion,JapanandKoreacollectivelyaccountedforabout40%ofRussiancoalexports,alargeportionofRussianexportswasaffected.DespiteonlytakingfulleffectinearlyAugust2022,theEuropeanspotmarketreactedswiftlywithanotableuptickinprices.Incontrast,Russiancoalwastradedatadiscount,asRussiantradersmadeeffortstodiverttheaffectedcoaltoothermarketsandtoattractnewbuyers.Whilstpricesforhigh-CVcoalintheEuropeanmarketreachedunprecedentedhighsaboveUSD400/t,RussiancoaltradedatadiscountofuptoUSD280/tinAugust2022.Page80IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026EuropeanandRussianhigh-CVthermalcoal(6000kcal/kg)pricemarkers,2021-2023USD/t5004003002001000ARACIFBalticportsFOBBlackSeaFOBVostochnyFOBIEA.CCBY4.0.Notes:ARA=AmsterdamRotterdamAntwerp.FOB=freeonboard.CIF=cost,insuranceandfreight.Vostochny=portintheRussianFarEast.Source:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.However,Russiandiscountsevolveddifferentlyaccordingtogeographicallocation.PriortothesanctionsplacedonRussia,itsBalticportsmainlyservedEUdemand,whileitsBlackSeaportsmainlysuppliedTürkiye,theMiddleEast,NorthAfricaandIndia.TheFarEasternportofVostochnysuppliedthePacificBasin.FromMarchuntilMay2022,pricesattheBalticportswereaboutUSD40/tabovepricesatportsintheBlackSeaandatVostochny,asdemandforRussiancoalfromEuropewastemporarilyelevatedbeforethebanonRussiancoalcameintofulleffectinAugust2022.FromJune,coalatVostochnytradedabovecoalatthewesternports,reachingapremiumofaboutUSD80/t.ThiswasdrivenbyincreasingdemandfromChinaandASEANcountries.DiscountsattheBalticportsandintheBlackSearangedfromabout43%inMarchtoabout73%inSeptember,afterpricesdroppedbyaboutUSD20/tinAugustwhentheEUcoalimportbancameintofullforce.However,fromOctober2022untilApril2023,coalattheBalticsportstradedabovecoalattheBlackSeaports.ThiswasduetothebeginningoftheheatingperiodwhenKazakhcoalwasshippedtotheEuropeanUnionthroughRussia’sBalticports.WithplummetingEuropeanprices,pricespreadsbegantonarrowinthefinalquarterof2022.PricediscountsatVostochnyhadvanishedbymid-NovemberbeforeacoldspellgaveEuropeanpricesashortuptick.Atthebeginningof2023,Page81IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026pricesconvergedagain.DiscountsattheBalticportsandintheBlackSeareducedtoanaverageofaboutUSD40/tin2023.Theevolutionofdiscountsformid-CVthermalRussianandAustraliancoalInthecategoryofmid-CVcoal(5500kcal/kg),thediscountonRussiancoalatthecountry’sFarEasternportofVostochnywaslesspronouncedandmorelimitedindurationthanatotherports.Throughout2021anduntilFebruary2022,Russianmid-CVcoaltradedatapremiumtomid-CVcoalfromAustralia.ThemarketsforAustralianandRussianmid-CVcoalwereeffectivelysplit,asChinahadissuedanunofficialbanonAustraliancoaloverpoliticaltensionsinlate2020.ThebanresultedinhigherdemandforRussianmid-CVthermalcoalfromChina,drivingupprices.Despitetheinformalbanstillbeinginplace,coalattheportofVostochnytradedatadiscountofaboutUSD54/t,betweenMarchandOctober2022asaresultofthewarandsubsequentsanctions,andtheneedforRussiantraderstoattractnewbuyersinviewoftheimposedsanctions.FromOctober2022untilJanuary2023,RussiancoalpredominantlytradedaboveAustraliancoalagain,beforebothpricemarkersconvergedinearly2023afterChinalifteditsunofficialbanonAustraliancoal.AustralianandRussianmid-CVthermalcoal(5500kcal/kg)pricemarkers,2021-2023300250200150100500USD/tNewcastleFOBVostochnyFOBIEA.CCBY4.0.IEA.CCBY4.0.Notes:FOB=freeonboard.Newcastle=portontheeastcoastofAustralia.Vostochny=portintheRussianFarEast.Source:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.Page82Coal2023PricesandcostsAnalysisandforecastto2026China’simportpricespreadnarrowsonhighdomesticproductionandareturntoAustraliancoalGivenChina’sgeography,evendomesticcoalisshippedoverlongdistancestoreachitsdestination.About800Mtpaofdomesticcoalisshippedfromthenorthernminingprovincestothecoastaldemandregionsinthesouth.ThisistwiceChina’simportsandequivalenttomorethanthree-quartersofallglobalcoalexports.Inrecentyears,China’spoliciestocurbimportshaveledtoaspreadbetweendomesticcoalpricesandpricesinthePacificBasin,astradersarerestrictedinexploitingarbitrageopportunities.DrivenbyChina’simportquotas,theexacttermsandconditionsofwhichareunknown,andtheintroductionofanunofficialbanonAustraliancoalin2020,domesticcoalhasmostlytradedatapremiumtoimportedcoal;however,theystillshowastrongcorrelation.Pricearbitragedomesticversusimportedcoal,China,2020-2023400USD/tJul-20Jan-21Jul-21Jan-22Jul-22Jan-23Jul-23350300IEA.CCBY4.0.250200150100500-50-100Jan-20DomesticminusimportedcoalpriceinSouthChinaPriceofdomesticcoalincl.VAT(5500kcal/kg)SouthChinaCFRincl.VAT(5500kcal/kg)IEA.CCBY4.0.Note:FOB=freeonboard;CFR=costandfreight;VAT=value-addedtax.Source:IEAanalysisbasedonCRU(2023),CoalCostModel(database).During2022thepremiumofdomesticcoaloverimportedturnednegativeseveraltimes,asChina’sampledomesticsupplymadehigh-pricedimportsuncompetitive.DomesticcoaltradedatamaximumdiscountofUSD79/tinMarch,whentheRussianinvasionofUkraineunsettledglobalmarketsandsentglobalpricestorecordhighs.Intotal,theaveragepremiumshranktoUSD4.4/tduring2022,comparedtoanaverageofaboutUSD24/tinthetwoyearsbefore.Page83Coal2023PricesandcostsAnalysisandforecastto2026Duringthefirstninemonthsof2023,pricesfordomesticandimportedcoaldecreasedsteadily,backedbyamplestocksandplentifuldomesticsupply,aswellassofteningglobalprices.TheaveragepremiumrosetoaboutUSD10/t,aspricesforimportedcoaldecreasedslightlyfurtherthandomesticcoal.However,spreadsremainedwellbelowpre-crisislevels,astheendtotheunofficialbanonAustraliancoaltookeffect.TheappreciationoftheUSdollarslowedoreventurnedtodepreciationagainstsomecurrenciesInternationalcoaldeliveriesarepredominantlycontractedinUSdollars.Therefore,exchangeratesagainsttheUSdollarhavevitallyimportantimpactontheaffordabilityofcoalimports.CurrencydepreciationagainsttheUSdollarmakescoalpurchasesmoreexpensiveforpotentialbuyers.In2021,witheconomiesrecoveringfromthepandemic-inducedlows,thecurrenciesofmajorimportingcountriesandregionsappreciatedagainsttheUSdollar,exceptfortheJapaneseyen(down2.7%),theTurkishlira(down20%),andtheIndianrupee(whichremainedconstant).Betweenearly2022andmid-2023,theUSFederalReserveraisedinterestrateseleventimes,whichledtotheUSdollargainingvalueagainstothercurrencies.Particularlyin2022,thisimplicitlyincreasedalreadyhighcoalprices.Thecurrenciesofmajorimportingcountriesandregionsrecordedlowdouble-digitdeclinesinvalue,withtheTurkishlirastandingoutfordecliningmore,andtheChineseyuanrenminbiandtheIndianrupeefordecliningless.Nonetheless,despitebeingaffectedbydepreciationtoalesserextent,importersinChinaandIndiastillturnedtolowergradesofcoal,boostingtheIndonesianlow-CVcoalmarket.In2023,currencydepreciationagainsttheUSdollarlostmomentum,withthePolishzloty(5%),theeuro(2.7%),andtheBritishpoundsterling(0.7%)evenappreciating.Page84IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Year-on-yeardevelopmentofselectedimportingcountries’currenciesagainsttheUSdollar,2021-202310%0%-10%-20%-30%-40%-50%202120222023CNYINREURJPYKRWGBPPLNTRYIEA.CCBY4.0.Notes:CNY=Chineseyuanrenminbi.INR=Indianrupee.EUR=euro.JPY=Japaneseyen.KRW=KoreanRepublicwon.GBP=Britishpoundsterling.PLN=Polishzloty.TRY=Turkishlira.2023valuesrepresentaverageexchangeratestoOctober2023,exceptforCNYandINR,whicharetoSeptember2023.Source:OECD(2023),MonthlyMonetaryandFinancialStatistics(MEI)exchangerates(USDmonthlyaverages).USpricesreturntoclosetopre-crisislevelsMorethan86%ofthecoalproducedintheUnitedStatesisconsumeddomesticallyandtradedunderlong-termcontracts,whichareoftenindexedtocostinflationindicators.Consequently,averagecostsforcoaldeliveredtoUSpowerplantswereaffectedtoalesserextentbysurgingglobalspotpricesforthermalcoalinrecentyears.BetweenJanuary2021andSeptember2022,thecostofcoaldeliveredtoUSpowerplantsroseby33%.Duringthesameperiod,spotpricesrosealmostthreefoldintheCentralAppalachianregionandmorethanfivefoldintheIllinoisBasin,mainlydrivenbysurgingexportprices.Meanwhile,spotpricesinthePowderRiverBasindidnotreacttoglobalexportpricesasonlyaminorfractionofcoalfromthisregionisdesignatedforexportthroughportsonCanada’swestcoast.Duetothehighshareoflong-termdomesticcontracts,exportersdidnotfullybenefitfromsurgingexportprices.Instead,risingoperatingcostswhileservinglong-termcontractsledtosurfaceminersbeginningtolinkpricesinnewlong-termagreementstodieselindexesortoaddreopenerorrepricingtriggerstoavoidfullybearingthepricerisk.Also,despiteelevatedprices,exportersdidnotshowsignificantinterestinexpandingtheircapacity.Giventheindustry’slackoflong-termprospects,financingnewprojectsandhiringworkforcearehard.Page85IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026AfterpeakinginNovember2022,pricesintheCentralAppalachianregionandtheIllinoisBasinstartedtofall.ByMay2023,pricesreachedlevelsclosetothoselastseenbeforethecrisis.SpotcoalpricesindifferentregionsoftheUnitedStatesandcostofcoalsuppliedtoUSD/tpowerplants,2021-2023250200150100500PowderRiverBasinCentralAppalachiarailIllinoisBasinrailormineCosttopowerplantsIEA.CCBY4.0.Sources:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.EIA(2023),STEO.DifferentfuelpricelevelsreturnedtohistoricalnormsPricesofvariousenergycommoditiesaretypicallycorrelatedastheyaresubstitutesforoneanothertoacertainextent(e.g.coalandgasinpowergeneration)ortheyareinputsintotherespectivesupplychains(e.g.oiluseincoaltransport).In2021and2022,however,theenergymarketwitnessedsignificantturmoil,temporarilyreducingthelinkinthepricesofcoal,gasandoil.Intermsofenergyequivalency,during2021,BrentcrudeoiltradedatanaveragepremiumofaboutUSD20/MWhovercoal,whilepricesforbothincreasedatasimilarpace.In2022,thespreadnarrowedduetocoalsupplyshortagesandstrongdemandforAustralianhigh-CVthermalcoal.WhenBrentcrudeoilpricesdecreasedinmid-2022amidlukewarmeconomicprospects,high-CVcoaltradedaboveitinequivalentenergytermsbetweenAugustandthebeginningofOctober,beforethepriceforAustralianhigh-CVthermalcoaldipped.Inthescarcitysituation,coalpricesweredrivenbydemandratherthanbymarginalsupplycosts,whicharetiedtooilthroughitsuseforfuelandexplosivesproduction.Page86IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Withincreasingcoaldemandatthebeginningofthe2022/23heatingseason(endofOctober),high-CVthermalcoalagaintradedaboveoil,whichstabilisedinthelastquarterof2022.Thislasteduntilmid-January2023,whenpricesforAustralianhigh-CVthermalcoalplummeted.Inthefirsthalfof2023,BrentcrudeoiltradedatapremiumofUSD23/MWhoverAustralianhigh-CVthermalcoal.PricemarkersforNewcastleFOBcoalandBrentcrudeoil,2021-2023100USD/MWh7550250NewcastleFOB(6000kcal/kg)BrentcrudeoilNote:FOB=freeonboard.IEA.CCBY4.0.Source:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.Pricesforthermalcoalandnaturalgasarehistoricallystronglycorrelated,especiallyoutsidetheheatingperiod,asbothcommoditiesaresubstitutesforeachotherinpowergeneration.However,duringtheenergycrisisin2022withseveregasshortages,thecommoditiesdecoupledtemporarily.Duringtheheatingseasonofwinter2021/22,thepriceofcoalstoodataroundtwicethatseeninJanuary2021afterChinaandIndiahadboosteddomesticcoalsupplytoreducetheirexposuretohighcoalprices.Meanwhile,gaspricesincreasedfurther.WiththeonsetofRussia’swaragainstUkraine,pricesforgasandcoalpeakedagain,withgasshowingamorepronouncedswing.BetweenMarchandJune2022,pricesforgasandcoalstabilisedatalevelfourtimeshigherthaninJanuary2021.Theirpriceswerelinkedagain,asmanycountriesswitchedtocoal-firedpowergenerationtosavegas.InJune,tightmarkets,EUstoragelevelrequirementsandthewarpremiumledtogaspricesincreasingmuchmorethancoalprices,despitewhich,coalpricesreachedall-timehighs.Inviewofclose-to-fullgasstoragesitesandexpectationsofamildwinter,pricesforgasdippedinOctober2022,justtopeakagainshortlyafterwhenacoldspellreachedEurope.Page87IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Aftertheendoftheheatingperiod,thepricesofgasandcoalcoupledagainatlevelsaround50%aboveJanuary2021.TrajectoriesofARACIFcoalandTTFgasprices,2021-202316Index12840ARACIF(6000kcal/kg)IndexTTFIndexIEA.CCBY4.0.Notes:ARA=AmsterdamRotterdamAntwerp.CIF=cost,insurance,andfreight.TTF=TitleTransferFacility.Source:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.ThecoalmarketdidnotanticipatesuchhighpricesAfteraphaseofstrongbackwardation,indicatingtheexpectationoffallingcoalprices,duringthehigh-priceperiodin2021and2022,theforwardcurveofAPI2(apriceindexforcoaldeliveriestoEurope)hadreturnedtoaflattrajectorybymid-2023.Thedevelopmentoftheforwardcurves,butalsopriceforecastsbydifferentplayers,comparedtothespotpricesshowthatthemarketdidnotexpectthestrongpriceincreasein2021and2022,northespeedofthereturntomorenormalprices.Whereasthecostofthemarginalsuppliercanbeagoodindicatorforalonger-termpriceforecast,theshort-termtrendsinanundersuppliedmarketmostlyfollowthesubstitutionsource,inthiscase,gasasthemainsubstitutionforcoalinpowergeneration.Everyeventwiththepotentialofdisruptingthegasmarkethasbeenbullishforcoalmarkets.Atthebeginningof2021theforwardcurvewasflat,indicatingthatthemarketdidnotexpectthetighteningofthemarketinthefollowingmonths.InAugust2022,theforwardcurveshowedanexpectationofcontinuedelevatedpricesthroughout2024andunderestimatedthepaceatwhichpriceswoulddecreaseuntilmid-2023.WithinthesixmonthsfromAugust2022untilFebruary2023,pricesdeclinedbytwo-thirds,whilethemarketexpectedadeclineofonlyabout14%.Bymid-2023,coalpricesreachedaleveljustbelowtwicethepriceseeninJanuary2021.Page88IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026IndexAPI2(ARACIF)spotpricesandforwardcurves,2021-20241614121086420Jan-2021(ARACIFForwards)TTF(Spot)Aug-2022(ARACIFForwards)ARACIF(Spot)Nov-2023(ARACIFForwards)IEA.CCBY4.0.Notes:API2=Argus/McCloskey’sCoalPriceIndex.ARA=Amsterdam,Rotterdam,Antwerp.CIF=cost,insurance,andfreightSource:IEAanalysisbasedonArgusMediagroup.Allrightsreserved.CostsCoalpricesurgesin2022weresignificantlyhigherthancostincreases,drivingupmarginsIn2022,thesupplycurveforhardcokingcoalshiftedupwardcomparedtotheyearbeforeduetocostincreasesininputfactorssuchasfuel,steelproducts,andlabour.Weightedaveragecostsincreasedbyabout36%,whileaveragepricesforhardcokingcoalinAustraliaincreasedby64%,indicatingexceptionallyhighprofitabilitygains.Highmarginsattractednewexporters,compensatingfordeclinesinmajorexportingcountries.Amongotherfactors,thefurtherrampingupofproductionatRussia’s13low-costElgamine,ledtoanincreaseinRussianhardcokingcoalexports.Drivenbythehighprices,Mozambiquedoubleditsexports.Conversely,exportsfromAustralia,thelargestsupplierinthissegment,decreasedbyabout7%ascoalminingwasseverelyaffectedbyadverseweathercondition.ChineseCovidrestrictionsattheborderhinderedMongolia’sabilitytoprofitfullyfromhighprices.13AnalysisofRussiansupplycostsshouldbeconsideredwithcautiongiventhecircumstancesofRussia’swarIEA.CCBY4.0.againstUkraine.Page89Coal2023PricesandcostsAnalysisandforecastto2026IndicativehardcokingcoalFOBsupplycurve2022andaverageFOBpricemarkersUSD/t450400Australianlow-vol(FOB,2022)350300Australianlow-vol(FOB,2023)250200Australianlow-vol(FOB,2021)150100500200225250275255075100125150175RussiaMtMozambique2021AustraliaIndonesiaUnitedStatesCanadaIEA.CCBY4.0.MongoliaRestofworldNotes:low-vol=low-volatile.FOB=freeonboard.Costcurvesaccountforvariableproductioncosts,overburdenremoval,royalties,inlandtransport,andportusagefees.TheannualaverageFOBmarkerpriceisbasedonthemonthlyaverageindexforAustralianprimehardcokingcoal.The2023priceisbasedontheaveragefromJanuarytoSeptember.Sources:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.IEA,adaptedfromCRU(2023),MetallurgicalCostModel(database).Thesupplycostsformetcoalarehigherthanthoseforthermalcoalonaverage.Thisisbecausemetcoalismoreoftenminedundergroundand,onaverage,comesfromsmallercoalminesthanthermalcoal.Inaddition,thepreparationcostsformetcoalaretypicallyhigherthanforthermalcoal.However,comparedtothermalcoal,higher-costprojectsareeconomicallyviableduetothegenerallyhighervalueofmetcoal.Inthesegmentofhigh-CVthermalcoal,theweightedaveragecostincreasedbyabout56%in2022.Coalpriceshowever,outpacedcostincreasesconsiderably.AveragepricesattheportofNewcastleinAustralia,acommonbenchmarkinthissegment,rosebyapproximately165%.Despiteaconsiderableuptickinprofitability,thesupplycurvecontractedcomparedto2021,furthertighteningthemarketandpushingupprices.Thecontractingofthesupplycurvewasdrivenbysupplydisruptionscausedbyvariousfactors,withAustraliaandSouthAfricabeingmostaffectedinthissegmentin2022.Intotal,thesupplycurveforhigh-CVcoalcontractedbyabout42Mt.Page90IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Indicativehigh-CV(>5700kcal/kg)thermalcoalFOBsupplycurve2022andaverageFOBmarkerpricesUSD/t400350Newcastle(6000kcal/kg,FOB,2022)300250200Newcastle(6000kcal/kg,FOB,2023)150100Newcastle(6000kcal/kg,FOB,2021)50010015020025030035040050MtIndonesiaRussiaUnitedStatesAustraliaColombiaOthers2021SouthAfricaIEA.CCBY4.0.Notes:Thecostcurvesaccountforvariableproductioncosts,overburdenremoval,royalties,inlandtransport,andportusagefees.Thecostcurveisnotadjustedfordifferentqualitiesofcoal.Thetransportcostsgivenaretotheclosestport,sotheFOBcostsofRussianproducersinAsiacanbesomewhathigherthanshowninthefigure.RussiancostshavebeenadjustedaccordingtoIEAestimates.TheannualaverageFOBmarkerpriceisbasedonthemonthlyaverageindexofNewcastle/Indonesiansteamcoal.The2023pricesarebasedonthemonthlyaveragefromJanuarytoNovember.Sources:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.IEA,adaptedfromCRU(2023),ThermalCostModel(database).Inthesegmentoflow-CVthermalcoal,whichisdominatedbyIndonesia,thesupplycurveextendedbyabout9MtasIndonesiarampedupproductionin2022.Onceagain,Indonesiaprovedtobethemostflexiblecoalsupplier.WeightedaveragecostsandaveragepricesofIndonesiancoalrosebyabout31%and29%respectively.Page91IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Indicativelow-CV(<4500kcal/kg)thermalcoalFOBsupplycurve2022andaverageFOBmarkerpricesUSD/t180160140120100Indonesia(4200kcal/kg,FOB,2022)80Indonesia(4200kcal/kg,FOB,2023)&(4200kcal/kg,FOB,2021)604020020406080100120140160MtIndonesiaRussiaOthers2021IEA.CCBY4.0.Notes:Thecostcurvesaccountforvariableproductioncosts,overburdenremoval,royalties,inlandtransport,andportusagefees.Thecostcurveisnotadjustedfordifferentqualitiesofcoal.Thetransportcostsgivenaretotheclosestport,sotheFOBcostsofRussianproducersinAsiaaresomewhathigherthanshowninthefigure.RussiancostshavebeenadjustedaccordingtoIEAestimatesTheannualaverageFOBmarkerpriceisbasedonthemonthlyaverageindexofNewcastle/Indonesiansteamcoal.The2023pricesarebasedonthemonthlyaveragefromJanuarytoNovember.Sources:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.IEA,adaptedfromCRU(2023),ThermalCostModel(database).InputcostsofcoalminesvaryintheirvolatilityThecoststructureofcoalminesisdeterminedmainlybyoperatingexpensessuchaslabourandfuelcosts,taxesandroyalties,aswellastransportcosts(e.g.forinlandtransport,portfeesandseabornefreight).Thecostproportiondependsontheminingmethod(surfaceorunderground)andcanvaryconsiderablydependingontheproducer,countryandspecificminesite.Inputfactorssuchasfuel,explosives,tyresandsteelproductsaretradedinternationally,andpricesfollowglobaltrends.Pricesfortyresandexplosiveshavebeenmorestablethanfuelandsteelpricesinrecentyears.Drivenbyinflation,theirpriceshavesteadilyincreasedbyabout29%and22%,respectively,sincethebeginningof2021.Incontrast,fuelandsteel,whicharetradedinmoreliquidglobalmarkets,havebeensubjecttomorefluctuations.InJune2020,demanddestructionduringtheCovid-19pandemicdrovefuelpricestotheirlowestlevelsince2003,onlytoreachrecordlevelstwoyearslaterinmid-2022.Oneyearon,pricesreturnedtolevelslastseeninJanuary2021,albeitstillabout37%abovelevelsatthebeginningof2020.Page92IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026PricesforsteelproductshardlychangedduringtheCovid-19pandemic.However,assteelmakingisanenergy-intensiveindustry,risingenergypricestooktheirtollin2021:theymorethandoubledin2021beforeadeterioratingeconomicoutlooksentpricesonadownwardtrend,whichlostmomentumatthebeginningof2023.Bymid-2023,pricesforsteelproductswerestill70%abovetheirlevelatthebeginningof2021.Nominalpricesofselectedcommoditiesandinputfactorsusedincoalmining,2020-2023350Index300250200150100500Jul-20Jan-21Jul-21Jan-22Jul-22Jan-23Jul-23Jan-20DieselfuelExplosivesSteelproductsTyresIEA.CCBY4.0.Source:IEAAnalysisbasedonUSBureauofLabourStatistics(2023),ProducerPriceIndexes.FuelcostsdecreasewitheasingenergymarketsDieselfuelcostsareanimportantcostfactorincoalmining.Thisisespeciallytrueforopencastmines,whichrelyheavilyondiesel-fuelledvehiclesandotherequipment.Consequently,fuelcostshaveagreaterinfluenceonoverallminingcostsinthosecountrieswithahighershareofopencastmining(e.g.ColombiaandIndonesia).IncountriessuchasChina,whereopencastminingaccountsforonlyaminorshareofoverallmining,fuelcostsplayaminorroleintheprofitabilityofamine.Nevertheless,oilpricesarealwaysafactorwhencoalistransported.In2022,fuelpricesincreasedinmanycountries,andsodidfuelasashareofoverallminingcosts,asitscostgrewmorestronglythanothercostfactors.Ataboutfivepercentagepointseach,ColombiaandIndonesiarecordedthestrongestincreaseinfuel’sshareofminingcosts.InAustralia,drivenbyasubstantialincreaseinroyalties,theshareremainedconstant.In2023,fuelpricesPage93IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026declined,andsodidfuel’sshareofoverallminingcostsinmostcountries.TheonlyexceptionstothisareChina,AustraliaandSouthAfrica,wheretheshareremainedconstant.Averagefuelcostsandshareoftotalcoalminingcostsinselectedcountries,2021-2023USD/t2045%1840%1635%1430%1225%1020%815%610%425%020210%20222023202120222023202120222023202120222023202120222023202120222023202120222023AustraliaColombiaIndonesiaRussiaSouthUnitedChinaAfricaStatesAveragefuelcosts(leftaxis)Shareoffuelcostsintotalminingcosts(rightaxis)IEA.CCBY4.0.Source:IEA,adaptedfromCRU(2023),ThermalCostModel(database).LabourcostsincreasedinabsolutetermsbutfellasashareoftotalcostsLabourcostsvarysignificantlyamongcoal-producingcountriesandaffectthecompetitivenessofexporters.14ExceptforSouthAfrica,wherelabourcostsslightlydecreasedasaresultofadepreciatingrand,labourcostsmarginallyrosein2022.Consequently,asothercostfactorssuchasroyaltiesandfuelcostsincreasedmorestrongly,theshareoflabourcostsintotalminingcostsdecreased.In2023labourcostsfurtherincreasedinmostcountriesexceptforSouthAfrica,asthewillingnesstopayhigherwagestoattractworkersremainshighincoalindustries.Withothercostfactors–predominantlyroyalties–decreasing,theshareoflabourcostsroseinmostcountries.InRussiaandChina,theshareoflabourcostsevenroseabove2021levels.14Chinaisincludedbecauseitsdomesticcoastalcoaltradeofmorethan800Mtiscomparablewithglobaltrade.IEA.CCBY4.0.Page94Coal2023PricesandcostsAnalysisandforecastto2026Averagelabourcostsandshareoftotalcoalminingcostsinselectedcountries,2021-2023USD/t2745%2440%2135%1830%1525%1220%915%610%35%020210%20222023202120222023202120222023202120222023202120222023202120222023202120222023AustraliaColombiaIndonesiaRussiaSouthUnitedChinaAfricaStatesAveragelabourcosts(leftaxis)Shareoflabourcostsintotalminingcosts(rightaxis)IEA.CCBY4.0.Source:IEA,adaptedfromCRU(2023),ThermalCostModel(database).GovernmentsincreasedroyaltiestobenefitfromhighpricesNationalandregionalgovernmentslevyroyaltiesoneachtonneofcoalproducedinreturnforgrantingmininglicences.Thelevelofroyaltiesvariesfromcountrytocountryandfromregiontoregionandhasbeensubjecttoadjustmentsinresponsetothehighpricephaseinrecentyears.Duringthehigh-pricephasein2021and2022,somegovernmentsincreasedroyaltiessignificantlytobenefitfromtheexceptionallyhighprices.In2022,royaltiesroughlydoubled.InQueensland,Australia,royaltiesgrewthemost–byapproximately134%.Consequently,royalties’shareofoverallminingcostsincreasedin2022.RoyaltycostsinQueenslandaccountedforalmost30%oftotalminingcosts.In2023,aspricessoftened,royaltiesdeclinedastheyarelinkedtocoalprices,albeitremainingabove2021levels.Correspondingly,theirshareoftotalcostsdecreasedsignificantlyintheAustralianstatesofNewSouthWalesandQueensland.InIndonesiaandWesternAustralia,royalties’shareoftotalminingcostsremainedconstant.Inothermajorexportingcountries,suchasRussia,theUnitedStates,SouthAfrica,andColombia,royaltieshavebeenlessofafactorinrecentyears.Page95IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Averageroyaltiesandshareoftotalcoalminingcostsinselectedareas,2021-2023USD/t6045%40%5035%4030%25%3020%2015%10%105%02021202220232021202220232021202220232021202220232021202220232021202220232021202220230%NewSouthQueenslandWesternSouthEastCentralSouthWalesAustraliaKalimantanKalimantanKalimantanSumatraAverageroyaltycosts(leftaxis)Shareofroyaltycostsintotalminingcosts(rightaxis)IEA.CCBY4.0.Source:IEA,adaptedfromCRU(2023),ThermalCostModel(database).Governments,especiallyAustralia,benefitfromrecordroyaltypaymentsIntotal,thehigh-pricephaseinglobalcoalmarkets,pairedwithroyaltyadjustmentsinsomecountries,hasputconsiderableamountsofmoneyintopubliccoffersinrecentyears.Basedonourassessmentofcostsandrealisedprices,inAustralia,royaltiesoncoalexportsrosefromapandemic-relatedlowofUSD2.6billionin2020toaboutUSD15billionin2022,doublingin2021andtriplingin2022,accordingtoourestimates.InIndonesia,totalroyaltiesonexportsrosefromUSD1.4billiontoaboutUSD5.9billion.In2023,duetooverallpricedecreases,royaltiesdeclined,amountingtoUSD10billioninAustraliaandUSD4.3billioninIndonesia.Inotherexportingcountries,export-relatedroyaltiesaremuchlowercomparedtoAustraliaandIndonesia,theworld’slargestexporters.ThecombinedroyaltiesofotherexportersgrewfromaboutUSD1.1billionin2020toaboutUSD4billionin2022,alittlemorethanaquarteroftheAustralianroyalties.However,incentivisedbythehighpricesinrecentyears,smallerexportingcountrieshavesoughttobenefitmorebyadjustingroyaltyandtaxschemes.Forexample,Russiaimposedanexportdutyoncoal,whichislinkedtocurrencyexchangerates,startingfromOctober2023.Furthermore,Colombiaissuedataxreformin2023,restrictingcoalminingfirm’sabilitytodeductroyaltypaymentsfromtheirincometaxliabilities.Page96IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026DespitethisdecisionhavingbeenoverruledbytheconstitutionalcourtinNovember2023,theinitialreformunderlinesColombia’sendeavourtoincreasecoalminingduties.Totalroyaltiesforexportedcoalinselectedcountries,2020-2023USDbillion1614121086420202020212022202320202021202220232020202120222023AustraliaIndonesiaRestAustraliaIndonesiaRussiaUnitedStatesSouthAfricaColombiaOthersIEA.CCBY4.0.Source:IEAestimatesbasedonCRU(2023),ThermalCostModelandMetallurgicalCostModel(database).RisingUSdollarcontributestootherexporters’competitivenessCurrencyexchangeratesaffectthecompetitivenessofexporters.WhilecoaltradingcontractsaremainlyinUSdollars,operatingcostsaresettledinlocalcurrenciestoalargerextent.Consequently,alocalcurrencydepreciationagainsttheUSdollarimpliesareductioninoperatingcostsandanincreaseinproducers’competitiveness.Betweenthebeginningof2022andmid-2023,theUSFederalReserveraisedinterestrates11times,makinginvestmentsinUSdollarscomparablymoreattractiveand,therefore,luringinvestorsandcapital.ExceptfortheRussianrouble,whichappreciatedagainsttheUSdollarin2022duetoextraordinarilyhighrevenuestreamsfromenergyexports,thecurrenciesofmajorexportingcountriesandChinadepreciatedcomparedtotheyearbefore.In2023,thedepreciationcontinued,butslowedformostcurrenciesexcepttheSouthAfrican,whichcontinuedtodevalueatthesamerate.TheRussianroublerecordedanotablereversal,seeingsubstantiallossesofabout17%in2023,drivenbysofteningenergyprices.Page97IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Year-on-yeardevelopmentofChina’sandexportingcountries’currenciesagainsttheUSdollar,2021-202320%10%0%-10%-20%202120222023AUDCNYCOPIDRRUBZARIEA.CCBY4.0.Notes:AUD=Australiandollar;CNY=Chineseyuanrenminbi;COP=Colombianpeso;IDR=Indonesianrupiah;RUB=Russianrouble;ZAR=SouthAfricanrand.Thechartdisplaysthey-o-yaverageexchangeratedevelopmentoftheselectedcurrenciesexpressedinchangefromthepreviousyear.2023representsaverageexchangeratestoSeptember2023forallcurrenciesexcepttheAUDandCOP,whichistoOctober2023.Source:OECD(2023),MonthlyMonetaryandFinancialStatistics(MEI):Exchangerates(USDmonthlyaverages).Freightratesreturntopre-crisislevelsThevastmajorityoftheglobalcoaltrade(morethan90%)isseaborneandshippedbydrybulkvesselsofdifferentsizes,categorisedbytheirdeadweighttonnage(dwt).ThefourmainvesseltypesareCapesize,Panamax,Handymax/SupramaxandHandysize,withthemostusedbeingPanamax(60000-80000dwt)andCapesize(over80000dwt).Freightratesdifferbetweenvesseltypesandroutes,anddependondemandandsupplyforfreight.Fuelcostsareanimportantdeterminantoffreightrates.Comprisingalmostaquarterofthetotal,seabornecoaltradehasthesecond-largestshareoftheoveralldrybulktradebymass,followingironorewithashareofabout30%.AfterpeakinginOctober2021,freightratestemporarilysoftened,drivenbyseasonalvariationsandadeteriorationoftheeconomicoutlook,beforetickingupagaininthefirsthalfof2022when,amongotherfactors,Russia’swaragainstUkraineunsettledenergymarketsandhighgaspricesdroveupthedemandforcoalasadrybulkcommodity.Witheasingdemandfordrybulkcarrierstowardstheendof2022duetoadeterioratingeconomicoutlookanddecreasingcongestioninports,whichhadbeencausedbypandemiccontainmentmeasures,freightratesbegantofallinthesecondhalfof2022.Bymid-2023,freightrateshadreturnedtolevelslastseeninmid-2022.Page98IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Freightratesonselectedroutes,2020-2023USD/t454035Jul-20Jan-21Jul-21Jan-22Jul-22Jan-23Jul-23302520151050Jan-20Australia-Japan(Panamax)Australia-Rotterdam(Capesize)Indonesia-SouthChina(Panamax)IEA.CCBY4.0.Source:IEAanalysisbasedonArgusMediaGroup.Allrightsreserved.Highprofitabilityofcoalexportersin2022Therecentmarketturmoilhasalsoaffectedtheprofitabilityofcoaltrade.In2020,drivenbylowprices,averageprofitsforhigh-CVthermalcoaltradeswerenegativeinmostmajorexportingcountries.Duringthehigh-pricephasein2021and2022,theprofitabilityofhigh-CVthermalcoaltradesrosesharplyaroundtheglobe.Surgingpricesoutweighedcostincreases,whichrosemainlyduetoanincreaseinroyaltiesandturnedhigh-CVthermalcoaltradeintoaprofitablebusiness.In2022,Australiarecordedprofitmarginsofalmost200USD/t,withaveragepriceslevellingataboutthreetimestheaveragecosts.AustraliaandColombiareachedmarginsofmorethantwicethecosts.UnlikeAustraliaandIndonesia,SouthAfricaandColombiadidnotadjustroyaltiesduringthehigh-pricephasein2021and2022.In2023,drivenbythestrongpricedecrease,theaverageprofitabilityofhigh-CVthermalcoaltradesdecreasedgloballybutstillremainedprofitable.Marginsdecreasedtovaluesabovethoseseenin2021,aspriceswerestillwellabove2021levels.WehaveexcludedRussiafromtheprofitabilityanalysisasprecisecostsandpricesareaffectedbyuncertaintyundercurrentwartimecircumstances.Nonetheless,itseemsthatin2023someRussiancoalminersfoundthemselvesonthevergeofunprofitability.AdditionaltransportexpensesandtheexportdutythatcameintoeffectinOctobermayfurtherweighontheprofitabilityofRussiancoalexports.Page99IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Indicativeprofitabilityofhigh-CVthermalcoaltradebycountry,2020-2023USD/t200150100500-5020202021202220232020202120222023202020212022202320202021202220232020202120222023AustraliaIndonesiaUnitedStatesSouthAfricaColombiaIEA.CCBY4.0.Note:Theprofitmarginisdefinedasthedifferencebetweenweightedaveragepricesandweightedaveragecosts.Valuesbelowzeroindicateunprofitabilityascostsexceedpotentialprofits.Source:IEA,owncalculationsbasedonCRU(2023).Theprofitabilityofhardcokingcoalexportswitnessedsimilardevelopments,albeitwithsomenuances.Comparedtothermalcoal,profitabilitydecreasedlessin2023aspricesandcostsdecreasedatsimilarrates.InMozambique,continuouscostdecreasesbetween2020and2023,pairedwithhighglobalprices,madehardcokingcoalaprofitablebusinesswithmarginsofmorethan50%.Indicativeprofitabilityofhardcokingcoaltradebycountry,2020-2023USD/t250200150100500-50-100-15020202021202220232020202120222023202020212022202320202021202220232020202120222023AustraliaUnitedCanadaMozambiqueMongoliaStatesIEA.CCBY4.0.Notes:Theprofitmarginisdefinedasthedifferencebetweenweightedaveragepricesandweightedaveragecosts.Valuesbelowzeroindicateunprofitabilityascostsexceedpotentialprofits.Source:IEA,owncalculationsbasedonCRU(2023).Page100IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026Theprofitabilityofcoalproducerscontrastedwiththedifficultiesofcoalminingcontractors,whooftensufferedfromthesurgeincosts,especiallyin2022.Thedegreetowhichcontractorshavebeenaffectedbyhighinputpricesdependsonthespecificsoftheagreementswiththemineoperator,andinparticular,onthecontractor’scost-indexation.Contractorswhohadnoorminorcost-indexedprices,borethebruntofthecostescalationofinputfactors.CertaincountriesrelyheavilyoncoalexportsfortheireconomiesExaminingtheproportionofcoalexportrevenuesasapercentageofGrossDomesticProduct(GDP)highlightstheeconomicroleofcoalinaselectionofmajorcoal-exportingnations.AsignificantlevelofcoalexportsasaproportionofGDPunderlinestheextentofacountry’srelianceoncoal-relatedactivities,whichisallthemoreimportantastheimperativetoachieveclimateneutralityloomslarge.Thisanalysisprovidesvaluableinsightsintotheuniquechallengesencounteredbycountriesastheynavigatethepathtowardasustainable,low-carbonfuture.TheoverallGDPshareofcoalexportrevenuesvariessignificantlybetweenthemajorcoalexportingnationsandbetweentheyearsconsidered.Theincreasesseenfrom2020to2022generallyfollowthedevelopmentofcoalprices,fromalowin2020duetotheCovid-19pandemic,andthenastronglyincreasetowards2022whenpricesskyrocketedamidtheenergycrisis.Comparedtochangesinenergypricelevels,changesinGDPbetween2020and2022werelessextreme,withthehighestincreaseinColombia(up19%)andthelowestincreaseinRussia(up3.4%),accordingtoOxfordEconomics.Duetothedevelopmentofcoalprices,theGDPshareofcoalexportrevenuesonaveragemorethanquadrupledacrossthecountriesconsideredfrom2020to2022.Comparingmajorcoalexportingcountries,mostexhibitlowsingle-digitcoalexportrevenuesasashareofGDP.Thissuggeststhat,onamacroeconomicscale,thesignificanceofthecoaltradeseemsrelativelymoderate.However,consideringthenominalGDPofcountrieslikeIndonesia,AustraliaandRussia,itisessentialtounderscorethesubstantialaggregatebudgetgeneratedbycoalexports.Thesecountriesamassconsiderablefinancialgainsfromcoalexports,thusreinforcingcoal’senduringroleintheireconomiclandscapes.InMongoliaandMozambique,coalexportrevenuesrepresentamarkedlyhighershareofGDP,underliningtheprofoundimportanceofcoalexportsforthesecountries.Anotabledifferenceariseswhenweconsiderthedifferentcoalgradesinvolvedinexports.Thermalcoal,asopposedtometcoal,appearspoisedforamorerapidphase-outinthemediumtolongterm.Avarietyofsubstitutesinpowergenerationalreadyexist,suchasrenewables.Incontrast,alternativestometcoal,suchasPage101IEA.CCBY4.0.Coal2023PricesandcostsAnalysisandforecastto2026hydrogeninsteelproduction,appearnottobemarketreadyintheshorttomediumterm.Inlightofthesedynamics,coalexportingnationssuchasIndonesia,SouthAfricaandColombia,withhighsharesofthermalcoalintheircoalexports,mayconfrontsignificanthurdlesinsustainingtheirlong-termcoalexportendeavours.CoalexportrevenuesasashareofGDPbycountry,2020-202240%35%30%25%20%15%10%5%0%202020212022202020212022202020212022202020212022202020212022202020212022202020212022MongoliaMozambiqueAustraliaIndonesiaSouthAfricaRussiaColombiaIEA.CCBY4.0.ThermalcoalMetcoalNote:Calculationbasedonmine-specificexportsandrealisedpricespermine.Sources:IEA,owncalculationsbasedonOxfordEconomics(2023)andCRU(2023).Page102IEA.CCBY4.0.Coal2023Coalminingprojects:ExportAnalysisandforecastto2026Coalminingprojects:ExportHighcashofproducerstriggerM&AactivityratherthanIEA.CCBY4.0.newminingprojectsTheprofitabilityofcoalexportshasshowngreatvariabilityinrecentyearsandthusexemplifiesanuncertaininvestmentlandscape.TheneedtocomplywithESGstandards,aswellaspoliticalambitionstophaseoutcoalinseveralregions,weighsontheattractivenessofnewminingprojects.Moreover,financingnewcoalinvestmentsisbecomingincreasinglychallengingasbankstrytodecarbonisetheirportfolios.Similardevelopmentsareoccurringininsurance.Asinsurersareoftenrestrictingtheircoverforthecoalindustry,especiallyfornewprojects,premiumpriceshavebeensurgingsignificantly,orcoveragehasevenbeenunavailable.Therefore,someminershaverecentlylaunchedself-insuranceprogrammes,oftenbackedbythehighcashinflowsseeninrecentyears.InAustralia,coalcompanieshaverecentlysetupamutualinsurancefundtoprocureinsuranceatareasonablecost.Afteratwo-yearperiodofextremelyhighmarginsforproducers,followingthewidelyunprofitableyear2020,marginsareexpectedtodecreasewithfallingpricesin2023.Consideringtheprevailinginvestmentcyclesofdecades,thehighpricephasehasnotlastedlongenoughtotriggersignificantadditionalinvestment.Theinvestmentenvironmentmightbefurthertightenedbyworldwideinflationanduncertaineconomicoutlooks.Insteadofproposingnewminingprojects,highprofitsduring2021and2022drovemajorplayerswithlessambitiousCO2targetsintheindustrytoextendtheirportfolios.Acquisitionsofhigh-profileminingcompaniesindicatetherearestillinvestorsbettingonthefutureprofitabilityofcoal.Sellers,onthecontrary,oftenseektodivestcoalassetsinviewoftheirESGtargets,pushedbyshareholdersorthefinancialsector,resultinginaremarkablenumberoftransactionsworldwideandahigherconcentrationofcoalassetsundersinglemanagement.Tonameaselectionoftheexamples,Czechia-basedfirmSev.enGlobalInvestmentsisacquiringa51%stakeinCoronadoGlobalResources,whichownsmostlymetcoalminesinAustraliaandtheUnitedStates.Thedeal’svolumeamountstoUSD1.6billionandfollowstheacquisitionoftheChainValleymineforseveralhundredmilliondollarsin2022.BathurstResourceisbuyingtheassetsoftheCanadian0.75MtpaTenasmetcoalproject,whichisexpectedtoreceiveenvironmentalapprovalin2025.Furthermore,WhitehavenCoalrecentlyannouncedsaleagreementswiththeBHPGroupandMitsubishiDevelopmentPtyLtdfortheDauniaandBlackwatercoalminesinQueensland.Thedeal’svolumetotalaboutUSD4.1billionandturnsWhitehavenintoacompanywithmanagedrun-of-mineproductionof40Mtpa.Johannesburg-basedThungelahascompletedPage103Coal2023Coalminingprojects:ExportAnalysisandforecastto2026itsacquisitionofan85%stakeintheAustralianEnshamcoalmine,whichisexpectedtoproduce2.7Mtpaofhigh-CVthermalcoal.ThelatestexampleofM&AactivityisTeckResources,whichhasannouncedadealtosellElkValleyResourcestoagroupofcompaniesforUSD9billion.ElkValleyResourcesisTeck’scoalarm,andthelargestcokingcoalproducerinCanada.Glencore,whichpaidUSD6.9billionfor77%oftheshares,isleadingthatgroupofcompanies.Thisreportmonitorsnew,expanding,andextendingcoalminingprojectsdedicatedtoexportsanddifferentiatesbetweenthoseatmore-advancedandless-advancedstages15.Thecurrentprojectpipelineamountstoanaggregatecapacityofabout456Mtpaunderconsideration,withmorethantwo-thirdsbeingless-advanced.However,less-advancedprojectshaveplungedremarkablybyabout293Mtpacomparedtoourpreviousanalysis.Thishascomeaboutforthreereasons.First,manyprojectshavenotseenanyprogressinyearsandcanbeconsideredshelved.Second,againstthebackgroundofadvancingclimatepolicies,somecountrieshaverestrictedtheprogressofcoalminingprojectsorevenimposedaban.Generally,early-stageprojectsaremoreendangeredbyinterventionsasgovernmentinfluenceontheseisgreater.Lastly,afewprojectshavealsoprogressedfromtheless-advancedtothemore-advancedstage.Themore-advancedprojectshavegainedaround70Mtpa,nowtotallinganexpectedcapacityofabout142Mtpa,withsimilarsharesofthermalcoal,metcoalandcombinedcoaltypes.Overall,projectsunderconsiderationaremostlylocatedinAustralia(61%),followedbyRussia(10%)andSouthAfrica(10%).However,somecountriessuchasexport-orientedIndonesialacktransparency,andthusthenumbersshouldbeinterpretedwithcaution.Besidesthedevelopmentofnewcoalminingcapacity,therehasalsobeennotableadvancementininfrastructureinvestments.AgainstthebackdropofimposedWesternsanctions,Russiaisactivelyexpandingitsterminalinfrastructureinitseasternregion,therebyreinforcingitscommitmenttotheAsianmarket.ThisstrategicmoveisfuelledbythefracturingofrelationswithWesterncountriesfollowingitsinvasionofUkraineaswellasamoregeneralshiftofcoalmarketstowardsAsia.Meanwhile,MongoliaisalsostrengtheningitstieswiththeEastbyconstructingtwocross-borderrailwaysandconcurrentlyplanninganotherlinkwithChina.15More-advancedprojectshavebeenapprovedandobtainedafinalinvestmentdecisionorareunderconstruction,whileIEA.CCBY4.0.less-advancedprojectsareatthefeasibilityorenvironmentalassessmentstage,orareawaitingapproval.Page104Coal2023Coalminingprojects:ExportAnalysisandforecastto2026Capacityofmore-advancedexportcoalminingprojectsAustraliaThermalRussiacoalMetcoalSouthAfricaMongoliaBothIndonesia102030405060UnitedStatesCanadaNewZealand0MtpaIEA.CCBY4.0.Capacityofless-advancedexportcoalminingprojectsAustraliaThermalCanadacoalSouthAfricaMetcoalMongoliaMozambiqueBothPolandUkraine50100150200250IndonesiaUnitedStatesRussiaUnitedKingdom0MtpaIEA.CCBY4.0.Page105IEA.CCBY4.0.Coal2023Coalminingprojects:ExportAnalysisandforecastto2026MetcoalprojectslookmoreattractivetoinvestorsthanthermalcoalprojectsIntheshortandmediumterm,steelproductionfromironorewillcontinuetobebasedonmetcoal,asitdoesnotappearasifalternativeinputssuchashydrogenwillbemarket-readyinthecomingyears.Incontrast,substitutionofcoalisalreadyhappeninginthethermalcoalsegment,asrenewablesinthepowersectorareontherise.Thisisalsoreflectedinadecreaseinthermalcoal’sshareofnewminingprojects.Inthelasttwoyears,theshareofthermalcoalinless-advancedcoalprojectshasplungedfromhalftolessthanone-thirdofprojectsunderconsideration.Simultaneously,theshareofmetcoalprojectsatbothless-andmore-advancedstageshasslowlyincreased.Currently,theless-advancedprojectpipelineisalmostequallydistributedbetweenthermalcoal,metcoal,andacombinationofthem.However,climategoalsandenvironmentalmovementsareputtingpressureonthedevelopmentofcoalprojects.Asearly-stageprojectsaremoreexposedtogovernmentpoliciesandalternativestotheuseofthermalcoalwidelyexist,theprogressofthermalminingprojectsseemshighlyuncertain.Althoughthermalcoal’smarketshareofoverallcoalexportsisaboutthreetimesthesizeofmetcoal,itsshareofmore-advancedprojectsonlystandsat44%.Thisalsounderlinesinvestors’preferenceformetcoalorcombinedcoaloverpurethermalcoalprojects.Moreover,recentreorganisationsresultingfromhighlevelsofM&Aactivitymightfurtheraffectcorporatestrategicdecisionsandshiftthebalancebetweenmetcoalandthermalcoalprojects.CoalgradesinhardcoalexportminingprojectsLess-advanced(314Mtpa)More-advanced(142Mtpa)30%31%29%44%26%Metcoal40%ThermalcoalBothIEA.CCBY4.0.Page106IEA.CCBY4.0.Coal2023Coalminingprojects:ExportAnalysisandforecastto2026Australiastillleadstheprojectpipeline,butisrecordingsignificantcancellationsIninternationalcomparisons,Australiastilldominatesthemarketwhenitcomestoneworexpandingcoalminingprojectsdedicatedtoexports.Thetotalnumberofprojectsattheless-advancedandmore-advancedstageamountsto51inAustralia,mostofthemaimingtoproducemetcoaloramixtureofmetandthermalcoal.Australia’sshareofneworexpandingprojectsinthepipelineis61%,butthatshareshouldbetreatedwithcaution,asthelistofprojectsinAustraliaiscompletelytransparent,unlikeinothergeographies.Asthedevelopmentofminingprojectsusuallytakesmultipleyears,fewprojectschangedstatusfromless-tomore-advancedbetween2022and2023.WhitehavenCoalapprovedinvestmentfortheVickeryextensionprojectinApril2023,expandingitsproductioncapacityto10Mtpa.StanwelliscurrentlystartinggroundworksatitsMeanduKing2Eastexpansion,whichisexpectedtocommenceminingin2024.The5MtpathermalcoalDartbrookmineislikelytorestartoperationbyendof2023orin2024.Conversely,less-advancedprojectsplungedfromalmost400Mtpalastyearto219Mtpacurrently,someofthembeingcancelledorconsideredshelved.ThissignificantreductionincludesWaratahCoal’sChinaStoneProjectwithanestimatedcapacityof40Mtpa,whoseenvironmentalpermissionhasbeenrejected,andStanmoreCoal’sRangeProjectwith5Mtpa,astheapplicationhasnotbeenupdatedinthreeyears.Anothercancellationisthe2MtpaCentralQueenslandCoalProject(Styxmine),whichwasrejectedduetotheunacceptableriskitposedtotheGreatBarrierReef.Thereductioninless-advancedprojectsunderlinestheheightenedcomplexityinvolvedinapprovingnewcoalinvestmentsinAustralia,whichisfuelledbyenvironmentalconcerns.In2023,Australianminingcompaniesbeganoperationsatahandfulofexpansionprojects,aswellasnew.AmongthenewprojectsistheMaxwellMinelocatedintheUpperHunterValley,withanannualcapacityof3.6Mtpa.Thenewlyestablishedminesextractboththermalandmetcoal,whereastheexpansionsmostlyinvolvemetcoal.AsignificantexpansionthatenteredoperationistheCarboroughDownsproject,withanestimatedcapacityof5Mtpa.Furthermore,after16years,the7.5MtpaNewAclandStagethreeexpansionwasfinallyabletodeliveritsfirstcoalinSeptember2023.Givenrobustfinancialreserves,2023witnessednoteworthyM&AdevelopmentsintheAustralianminingsector.MiningentitiessuchasWhitehavenCoalandTerraCombothannouncedtheirintentionstoembarkontheacquisitiontrail.ThisstrategicshifttowardsM&A,ratherthantheinitiationofnewprojects,hasitsrationaleinthegrowingchallengesassociatedwithenvironmentalcomplianceandregulatoryconstraints,whichposeconsiderablebarrierstoprojectrealisation.Inaddition,difficultiesinfinancingandinsuringprojectscastashadowoverthePage107IEA.CCBY4.0.Coal2023Coalminingprojects:ExportAnalysisandforecastto2026investmentenvironment.Insteadofgreenfieldprojects,stakeholdersappeartobeputtingcashasidefortightermarketconditions.Russianinvestmentfollowsthecoalmarket’sshifttowardsAsiaAsRussia’swaragainstUkrainehascontinued,sohaveEuropeansanctions.Inresponse,RussiahasacceleratedtheexpansionofitsinfrastructurelinkstotheEastwiththeaimofexpandingexportstotheAsiaPacificregion.Ithasdecidedtoelectrifytwomajorroutes,ontheBaikal-AmurMainline(BAM)andontheTrans-SiberianRailway,toenablemoreefficienttraffic.TheserouteshavebeenbottlenecksforRussianexportsinthepastandcanbeconsideredstrategicallyimportant.SomeRussianauthoritieshaveevensuggestedconstructinganewrailway,BAM-2;however,noinvestmentdecisionhasbeenmadetodate.Anothernewconnection,approvedinearly2023,istheMohe-Dzhalindarailwaybridge,enablingdirectaccessfromtheRussianSakhaRepublictoChina.ThebridgewillreplacetheseabornerouteviaVladivostokandwillmarkthebeginningofanewcorridor,theMohe-Magadanrailwayline.Russiaisexpandingtheinfrastructureatitslargestcoaldeposit,theElgamineintheSakhaRepublic,intwoways:during2023,thesecondphaseofoperationattheminewasapproved,expandingitscapacityfrom20Mtpato45Mtpa.Simultaneously,theconstructionofa30Mtpacoalterminalandrailwayhasbegunandisexpectedtobefinishedbytheendof2024.Thiswouldmaketheterminalthefifth-largestcoalexportfacilityinRussia.ItslocationintheeastatCapManorskyunderlinesRussia’sstrategicfocusonAsia.FurtherprojectsintheEastarethe20MtpaSukhodolTerminalinPrimorskyKrai,fromwhichthefirstshipmentofcoalhasdepartedinNovember2023,andtheYeniseycoalterminal,whichhascommencedoperationandaimstoreachacapacityof7Mtpain2026.RussiantieswithChinaarealsobeingstrengthenedwiththenewrailhubinHunchunforimportedcoal.Thehubcouldbeinoperationinthenexttwoyears,handlingatleast5Mtpa.A-Property’sVerkhneteshskycokingcoalminecommencedoperationin2022,aimingtoproduce1Mtduring2023;theminehasatotalcapacityof5Mtpa.Themine’slocationclosetotheKiyzasskycoalmineallowsfortheutilisationofexistingtransportinfrastructureservingtheAsianmarket.TheuncertaintysurroundingcoalmarketdevelopmentinRussiaisreflectedintheslowprogressofminingprojectsinthepipeline.Theonlymineenteringthemore-advancedstageisKolmar’sInaglinsky-2cokingcoalmine,withacapacityof8Mtpa.Page108IEA.CCBY4.0.Coal2023Coalminingprojects:ExportAnalysisandforecastto2026AfricancoalminingprojectsdedicatedtoexportsshrinkSouthAfricaTheSouthAfricancoalsectorcontinuestosignaladecliningtrendinminingcapacity,assignificantinvestmentandnewprojectshavebeenlackingforyears.AnissueassociatedwithnewminesconcernstheprevalenceofpollutedlandsandwaterwaysinSouthAfrica,asthecountryalreadyhasafewhundredabandonedmines.Againstthisbackground,onlytwoprojectshaveenteredthemore-advancedstage,andonehasenteredoperation.TheArnotthermalcoalmine,whichhistoricallyproduced5Mtpa,hasbeenreopenedandisexpectedtodeliveritsfirstcoalsoon.CanyonCoal’s1.2MtpaThusothermalcoalmineiscurrentlyunderconstruction.TheNewLargomine,ownedbySeriti,appearstobeatmoreadvancedstageasminingoperationshavecommenced;itiscurrentlyintheramp-upphase.Themine’sfullcapacityisstatedas12Mtpa,partlyservingdemandfromcoal-firedpowerplantsandpartlyservingexports.However,thepreciseamountsdedicatedforexportdependontheprogressoftheKusilepowerstation,withtwoadditionalunitsyettobecommissioned.Oncetheseunitsbecomeoperational,Kusilewillbethefourth-largestcoalplantintheworld.Thecapacityofknownless-advancedprojectsmorethanhalvedcomparedtoourpreviousanalysis,downtoabout21Mtpa,indicatingadecreasingtrendinnewSouthAfricanprojects.BotswanaIn2022BotswananPresidentMokgweetsiMasisiofficiallyinauguratedanewcoalmineatthestate-runMorupuleCoalMine(MCM).Themine,withanannualproductioncapacityof1.4Mtpa,ispoisedtoaugmentcoalexportsfromBotswana,primarilytoneighbouringcountries.ThenewsiteboostsMCM’soutputby50%to4.2Mtpa.Inaddition,India-basedJindalwasreportedtohavestartedconstructiononanew4.5MtpacoalmineinthesoutheasternMmamabulacoalfieldsin2022.ThemineisplannedtoservethenearbycoalplantcurrentlyunderconsiderationandtheSouthAfricanmarket.Asthepowerplantprojectappearstobemakingprogress,weexpecttheconstructionoftheminetohavestarted.MozambiqueInvestmentincoalextractionhasstalledinMozambique,asnoprojectisinthemore-advancedstage.Threeprojectswithacombinedcapacityofmorethan40Mtpahavenotprogressedinrecentyearsandcanbeconsideredshelved.Despitenewprojectsstagnating,astrategicallyimportantterminalforBotswananexports,theMatolaCoalTerminalatMatupoPort,isabouttoincreaseitscapacityPage109IEA.CCBY4.0.Coal2023Coalminingprojects:ExportAnalysisandforecastto2026from7.3Mtpato12Mtpa.However,inadditiontocoal,ironoxideandmagnetitearealsoprocessedatthesite.ZimbabweTheonlynewcoalminingprojectknowninZimbabweistheLubuCokingCoalProjectownedbyContangoHoldings.Themineiscurrentlyintheramp-upphase,producingabout0.24Mtpaandaimingtoproduceupto5Mtpainthecomingyears.Theminewillservethenew0.6GWcoal-firedpowerplantHwange,fundedbyChineseinvestors.TanzaniaTanzaniaincreaseditsminingactivityinlightofthesustainedhighpricesduringthesecondhalfof2022.Thecountry’scoalextractionhistoricallyserveddomesticdemandanddemandfromneighbouringcountriesonly.Giventheextraordinarymarketsituationin2022,TanzaniancoalalsofounditswaytowardsEurope.However,theelevatedpriceleveldidnottriggernewinvestmentinminingprojects,anditremainsquestionableifincreasedexportswillpersistwhilepricesfollowadownwardtrajectoryin2023.ShortprojectpipelinesintheUnitedStates,CanadaandEuropefocusoncokingcoalUnitedStatesWhenmakingglobalcomparisons,theUnitedStates’projectpipelineappearstoberathershort.Projectsunderconsiderationhaveacombinedestimatedcapacityofabout9Mtpa,mostaimedatproducingmetcoal.Theonlythermalcoalmine,RiverViewHendersonPortal1,ownedbyAllianceCoalLLC,recentlymovedfromtheless-advancedtothemore-advancedstageasconstructionbeganin2023.The3MtpacokingcoalmineLongviewisexpectedtohaveramped-upoperationsduringthecourseof2023,asdidConsolEnergy’sItmanncokingcoalminetoitsfullcapacityof0.9Mtpa.Supplychainissuesanddelaysinthedeliveryofequipmentcausedlaterthanexpectedstart-upattheItmannmine.Projectswiththeless-advancedstatusaccountfor4.8Mtpaofcokingcoalcapacity.InSeptember2023theBidenadministrationdecidedtoinvestUSD1.4billiontoimproverailwayinfrastructure.Theplansuggeststhatabouthalfoftheamountwillbeusedtoenhancefreightrailservice,potentiallyincreasingtheefficiencyofcoaltransport.Theplannedinvestmentaddressesbottlenecksthathavecausedsupplydisruptionsinrecentyears.Page110IEA.CCBY4.0.Coal2023Coalminingprojects:ExportAnalysisandforecastto2026CanadaCanada’sdecisiontobanthermalcoalexportsnolaterthan2030isreflectedinthetinythermalcoalprojectpipeline.TheonlysignificantthermalcoalinvestmentunderconsiderationisCoalspurMines’VistaExpansionProject,whichaimstoexpandthemines’capacityby7Mtpa.DespitestatementsbyCanadianauthoritiesin2021thatnewprojectswouldnolongerbeapproved,theprojectcurrentlyseemstobeundergoinganimpactassessment.Incontrast,thecokingcoalsegmentisshowingmoreactivity.Theaggregatecapacityofprojectsunderconsiderationaddsuptoabout28Mtpa,withmostprojectsattheless-advancedstage.Thelong-mothballed3MtpaQuintetteminehasnowbeenpurchasedfromTeckResourcesbynewcomerConumaResources,whichplanstorestartthemineinlate2023.Despitethedecisiontoendthermalcoalexports,investmentinWestshoreTerminalsinBritishColumbiahassignificantlyincreased.Theterminalisofstrategicimportance,asnewterminalsinWashingtonStateandOregonhavebeenrejectedduetoenvironmentalconcerns;therefore,WestshoreessentiallyservesasthesolerouteforaccessingAsianmarketsviathePacificNorthwest.Theterminalrecentlysawaremarkableuptickinthermalcoalexports,almostdoublingfromaround9Mtin2020to16Mtin2022.TheglobalM&AtrendisalsoevidentinCanada,withGlencoreacquiringa77%shareofElkValleyResourcesforUSD6.9billion(seesectionabove).AnothersuccessfulacquisitionhasbeenperformedbyBathurstResources,purchasingtheassetsofthe0.75MtpaTenascokingcoalprojectfromTelkwaCoal.EuropeDuetothecommitmenttophaseoutcoal-firedpowergeneration,lowlevelsofactivityhavebeenrecordedinEuropeancoalminingprojects.However,amineinPolandiscurrentlyattractingpublicinterest.TheTurówcoalmine,supplyinglignitetothenearbyTurówpowerstationinBogatynia,hasappliedforalifetimeextensionfrom2026to2044.AcourtrulingsuspendedtheenvironmentalpermitinMay2023.Nonetheless,thefinaldecisionbythePolishgovernmentisyettobeknown.TheonlynewmetcoalprojectunderconsiderationexistsintheUnitedKingdom.The2.5MtpacokingcoalprojectattheWoodhouseCollierywasapprovedinlate2022,afterwhichenvironmentalmovementsbegantochallengethedecision.Theyhavetakenlegalaction,andafinaldecisioniscurrentlypending.However,WestCumbriaMiningisstillplanningtostartconstructionin2024.Page111IEA.CCBY4.0.Coal2023Coalminingprojects:ExportAnalysisandforecastto2026IndonesiaandMongoliaexhibitgrowingexportpotential,whilethegovernmenthaltsnewprojectsinColombiaIndonesiaIntheturbulentcoalmarketofthepasttwoyears,Indonesianminingshowedsubstantialflexibilityinreactiontovolatilemarketconditions.However,lackingtransparencymightcomplicatetheinvestigationofnewminingprojects.Thetotalcapacityofprojectsinthepipelineisestimatedat9Mtpa,whichissomewhatlowcomparedtothecountry’smarketshare.Mostofprojectsunderconsiderationaimtoproducethermalcoal.OneoftheseprojectsisIATA’sArthacoPrimaEnergyproject.Itisexpectedtobegincommercialoperationsin2023andcontributetoachievingIATA’sproductionplanstoincreaseoutputfrom4.2Mtin2022to7Mtin2023.Inadditiontothis,GeoEnergyhasacquiredamajoritystakeintheTRAminewithcoalreservesofalmost300Mt,ownedbyGoldenEagleEnergy.AloanrecentlysecuredbyGeoEnergyhelpsfunditsexpansionplansforTRA,aswellasrampinguptothemine’sproductiontargetof25Mtpa.Furtherdetailshavenotbeenspecified.MongoliaInvestmentinMongoliaindicatesastrengtheningoftiestoChina,asrailwayinfrastructurebetweenthecountriesisgraduallyexpanding.Anew7kilometreraillinkconnectingtheMongolianborderpointShiveeKhurenandtheChineseborderpointCekeisunderconstructionandexpectedtobecompletedbytheendof2023.TheprojectwillenableanincreaseinMongoliancokingcoalexportsasitreplacessomewhatinefficienttransportbytruck.Furtherrailwayprojectsareunderconstruction.ThebordercrossingbetweenGashuunsukhaitandGanqimaoduhasbeenimprovedwitharaillinkontheMongolianside,althoughaconnectionontheChinesesideisyettobecompleted.TheotherlinkisabouttoconnectKhangiinMongoliawithMandulainChina;however,officialapprovalasacross-borderlineisstillpending.Regardingnewmininginvestment,around18MtpaofcokingcoalcapacityiscurrentlyunderconsiderationinMongolia.Atthemore-advancedstage,AspireMining’sOvootcoalprojectwithanestimatedcapacityof4Mtpareceivedregulatoryapprovalattheendof2022,withfurtherprogressin2023.ThelargestamongtheprojectsisthepossibleextensionoftheTavanTolgoicomplex,whereErdenesTavanTolgoiiscurrentlyseekingcapitaltoincreasecokingcoalproductionby10Mtpa.Page112IEA.CCBY4.0.Coal2023Coalminingprojects:ExportAnalysisandforecastto2026ColombiaColombia'spresident,GustavoPetro,hasissuedasetofdecreesaimedatprotectingtheenvironmentinthecoal-producingregionofLaGuajira.Thesedecreesincludemeasurestopreventtheestablishmentofnewcoalmines,torestrictthelifeextensionofexistingmines,andtodisallowthephysicalenlargementofnewextractionzoneswithinexistingcoalprojects.Thedecisioneffectivelypreventstheprogressofthreenewthermalcoalprojectswithstartingdatesbetween2024and2026:SanJuan(16Mtpa),Canaverales(2.5Mtpa)andPapayal(2.4Mtpa),allcontrolledbyYildirimHolding.Theconstitutionalcourtmadearulingonthelegalityofthedecrees,whichliftsthebanimposedbythedecreescallingthemunconstitutional.However,theenvironmentalministryisabouttoissueanotherdecreethatwilldelimitopenpitcoalmines,whichwouldleadtoanotherU-turnforColombiancoalprojectsinthepipeline.Inlightofthesocio-politicalupheavalsurroundingcoalmineactivity,RoninResourceshasalsopostponeditsexplorationdrillings.Thecompany'splannedVetasThermalCoalProject,locatedalongtheColombia-VenezuelabordernearLaGabarra,issettoresumeexplorationwhencircumstancesallow.Inthemeantime,thecompanynowintendstofocusonobtaininganenvironmentallicenceanddraftingaminingplan.Finally,theLaFranciaandElHatillothermalcoalmine(2Mtpa)restartedoperationsattheendof2022.Page113IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026GeneralannexTablesTable1:Totalcoalconsumption(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRAsiaPacific6639697169675.3%5.0%2023-20260.0%China4520474045354.6%4.9%-1.5%India1162126013979.1%8.4%3.5%Japan1851711571.2%-7.7%-2.8%ASEAN41344452813.2%7.5%6.0%NorthAmerica489392304-6.9%-19.7%-8.1%UnitedStates455360276-7.6%-20.9%-8.4%CentralandSouth483835-11.5%-20.6%-2.4%America6715614564.3%-16.5%-6.7%EuropeEuropeanUnion4613542783.9%-23.3%-7.7%Eurasia3683783791.0%2.9%0.1%Russia2492582504.5%3.3%-1.0%Africa187183193-2.3%-2.2%1.8%MiddleEast131382.2%-2.2%-13.8%World8415853683444.0%1.4%-0.8%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Table2:Thermalcoalandligniteconsumption(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRAsiaPacific5739604760286.0%5.4%2023-2026-0.1%China3801400238195.1%5.3%-1.5%India1090118012939.1%8.2%3.1%Japan6566640.6%1.7%-0.8%ASEAN39242244515.2%7.7%5.2%NorthAmerica471375288-6.6%-20.3%-8.4%UnitedStates440345263-7.6%-21.5%-8.6%CentralandSouth322420-15.8%-26.5%-4.8%America6045013975.2%-17.0%-7.5%EuropeEuropeanUnion4043032284.8%-24.9%-9.1%Eurasia2923013005.0%3.1%-0.1%Russia1811881798.2%3.9%-1.7%Africa182178188-2.8%-2.4%1.8%MiddleEast9943.2%-3.1%-22.4%World7329743572264.6%1.4%-0.9%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Page114IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026Table3:Metallurgicalcoalconsumption(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRAsiaPacific9009239391.5%2.6%2023-20260.6%China7187387162.0%2.7%-1.0%India72811049.6%11.6%8.8%Japan434038-2.4%-7.6%-1.3%ASEAN212137-15.0%3.7%20.3%NorthAmerica181716-14.6%-4.7%-3.2%UnitedStates151413-8.9%-5.4%-3.5%CentralandSouth161415-1.1%-8.5%1.4%America686059-3.0%-11.8%-0.6%EuropeEuropeanUnion575150-2.0%-11.5%-0.4%Eurasia767780-11.7%2.0%1.0%Russia687072-4.1%2.0%0.9%Africa55522.0%2.7%1.2%MiddleEast4440.0%-0.2%0.7%World108611011118-0.1%1.4%0.5%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Table4:Totalcoalproduction(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRAsiaPacific6587684267429.0%3.9%2023-2026-0.5%China4374442942498.7%1.3%-1.4%India9221027118312.2%11.4%4.8%Australia443439408-3.7%-1.0%-2.4%Indonesia68772566120.3%5.6%-3.1%NorthAmerica5925393912.5%-8.9%-10.1%UnitedStates5394843463.0%-10.2%-10.6%CentralandSouth616855-3.4%11.5%-6.6%America4984343582.8%-12.8%-6.2%EuropeEuropeanUnion3492762215.0%-21.1%-7.2%Eurasia5856065991.6%3.6%-0.4%Russia4444574390.3%2.9%-1.4%Africa2572502463.1%-2.9%-0.5%MiddleEast222-0.4%0.7%-0.5%World8582874183947.3%1.8%-1.3%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Page115IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026Table5:Thermalcoalandligniteproduction(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRAsiaPacific57355974585910.5%4.2%2023-2026-0.6%China37233780360010.1%1.5%-1.6%India9151020117312.2%11.4%4.8%Australia275282250-5.0%2.8%-4.0%Indonesia68171965420.5%5.6%-3.1%NorthAmerica5094523093.2%-11.1%-11.9%UnitedStates4844282923.5%-11.6%-12.0%CentralandSouth556250-5.1%13.0%-7.2%America4844203453.1%-13.2%-6.3%EuropeEuropeanUnion3362632085.5%-21.9%-7.5%Eurasia4604814750.0%4.5%-0.4%Russia324336320-2.3%3.8%-1.7%Africa2462382342.6%-3.1%-0.6%MiddleEast000-0.4%2.0%1.8%World7489762872728.4%1.9%-1.6%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Table6:Metallurgicalcoalproduction(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRAsiaPacific8538688830.0%1.8%2023-20260.6%China6516496491.1%-0.3%0.0%India67101.0%11.1%12.9%Australia169156159-1.5%-7.3%0.5%Indonesia6771.3%9.7%2.6%NorthAmerica838682-1.6%4.2%-1.7%UnitedStates555654-1.6%2.2%-1.3%CentralandSouth66517.8%-3.2%-0.2%America141413-5.7%-0.8%-1.7%EuropeEuropeanUnion131313-6.1%-0.8%-1.2%Eurasia1251251248.0%0.3%-0.3%Russia1201211197.8%0.3%-0.5%Africa12121214.8%2.9%0.8%MiddleEast121-0.4%0.6%-0.8%World1094111311220.9%1.8%0.3%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Page116IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026Table7:Totalcoalimports(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRChina301451314-11.2%49.9%2023-2026-11.4%India22824123016.6%5.8%-1.6%Japan1841711570.2%-7.2%-2.8%Korea125120112-0.4%-4.2%-2.2%ASEAN137150180-4.1%9.9%6.3%NorthAmerica21212027.1%-4.2%-0.4%CentralandSouth302826-25.4%-8.7%-2.2%America17613911016.2%-21.0%-7.5%EuropeEurasia343227-32.0%-5.2%-4.9%Africa172020-6.5%18.9%-0.4%World136714681292-0.5%7.4%-4.2%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Table8:Thermalcoalandligniteimports(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRChina237351242-16.6%48.1%2023-2026-11.7%India16116313622.0%1.3%-5.9%Japan1401311190.2%-6.3%-3.3%Korea9188801.8%-3.9%-3.0%ASEAN117128144-1.9%10.3%4.0%NorthAmerica16171737.6%4.1%-0.5%CentralandSouth181714-35.3%-9.6%-5.1%America120906127.2%-25.6%-12.1%EuropeEurasia282722-23.4%-6.1%-5.9%Africa161919-8.3%19.9%-0.5%World10501116938-0.5%6.3%-5.6%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Page117IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026Table9:Metallurgicalcoalimports(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRChina641007216.7%56.4%2023-2026-10.3%India6678945.4%16.8%6.5%Japan4440380.3%-10.0%-1.3%Korea343232-5.9%-5.0%-0.2%ASEAN202236-15.3%7.9%18.5%NorthAmerica5443.5%-29.3%0.1%CentralandSouth121112-2.1%-7.4%2.0%America565049-2.1%-10.9%-0.3%EuropeEurasia555-57.5%0.0%0.0%Africa11143.8%-0.1%1.6%World317352354-0.8%10.9%0.2%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Table10:Totalcoalexports(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRAustralia344348327-5.7%1.2%2023-2026-2.0%Indonesia4715003947.6%6.2%-7.6%UnitedStates778475-0.4%9.1%-3.5%Canada36373214.6%1.5%-4.6%Colombia5657451.7%1.3%-7.4%Russia224221206-7.5%-1.2%-2.4%SouthAfrica6870577.3%2.9%-6.6%World1376146612941.0%6.6%-4.1%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Table11:Thermalcoalandligniteexports(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRAustralia181196172-6.2%7.9%2023-2026-4.2%Indonesia4654943887.7%6.2%-7.7%UnitedStates354032-4.5%14.3%-6.8%Colombia5455430.4%0.9%-7.7%Russia173170158-9.2%-2.2%-2.4%SouthAfrica6769567.7%3.0%-6.7%World105611189411.6%5.9%-5.6%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Page118IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026Table12:Metallurgicalcoalexports(Mt),2022-2026Region/country2022202320262021-222022-23CAAGRAustralia163152155-5.1%-6.3%2023-20260.6%Mongolia1448572.0%242.2%5.6%UnitedStates4244433.2%4.8%-0.6%Canada2829277.1%2.5%-2.2%Russia505148-1.0%2.2%-2.4%Mozambique77730.0%2.9%0.5%World320348353-1.0%8.7%0.5%Notes:CAAGR=compoundaverageannualgrowthrate.Datafor2022arepreliminary;2023areestimated;2024to2026areforecasts.Page119IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026Coalminingprojects:ExportCountryProjectCompanyTypeEarliestFullResourceStatusstart-upcapacityAustraliaAngusPlaceCentennialCoalN2024+(Mtpa)TCLAAustraliaWest..2AustraliaStanmoreCoalN..2.6TC,CC,PCILAAustraliaBelviewBcooawlenCokingN2026+0.6Australia2028+CCMAAustraliaBroadmeadows..6.6AustraliaEastGlencoreE2026+TCLAAustraliaBulga(Mod3&2023+4AustraliaMod7)Qcoal/JFESteelE..TC,CCLAAustraliaByerwenCoal2028+18AustraliaProjectStage2AdaniE2024+TCLAAustraliaCarmichaelCoal..15AustraliaProjectStage2E2023CCLAAustraliaCavalRidge20232AustraliaExtensionDeltaCoalE20253.4TCMAAustraliaChainValley20280.4ExtensionNewHopeE0.5TCMAAustralia2025+..AustraliaBengallamineSCporainlgsureCreekN..3TC,CCLAAustralia2026+AustraliaCometRidgeN2023+5CCLA1.2AustraliaColton2025+4.5AustraliaCooroorahBowencokincoalN2024+CC,PCILAAustralia2023+AustraliaCurraghCoronadoGlobalE2024TC,CCMAExtensionACuosatlralianPacificRAustralia2028TCMADartbrookAustralia2028+AustraliaDysartEastBengalEnergyN2027+CCLAAustraliaEnshamLifeof2025MineExtensionETCLAProjectGeminiCoalMagneticSouthN1.9CCLAMineGormanNorthWhitehavenCoalN..TCLACoalProjectG2rosvenorPhaseAngloAmericanE6TC,CCLAHillalongSEhnaenrgdyonGgroupN4.2TC,CCMAHunterValleyOCopnetriantuioantisonsYGalennccooarle/E42TC,CCLAProjectIntegraUGGlencoreE4.5TC,CCLAIronbarkNo.1FRietzsroouyrcAeusstraliaN2.7TC,CCMA(Ellensfield)BCoowalenCokingN0.6TC,CCMAIsaacRiverStanmoreCoalE1.2TC,CCLAIsaacPlainsComplex-UndergroundextensionKevin'sCornerGVKN10.6TCLALakeVermontLakeVermontMeadowbrookJointVentureE5.5CCLAProjectMangoolaCoalCOopnetriantuioendsGlencoreE5TCMAProjectPage120IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026CountryProjectCompanyTypeEarliestFullResourceStatusstart-upcapacityAustraliaMMaillveinsiuDmowns-MetResE2025+(Mtpa)CC,PCILAAustraliaMEaesatnPdruojKeicntg2StanwellE2024TCMA2027+1.2TCLAAustraliaMoorlandsCuestaCoalN2025+CCLA5AustraliaMoranbahSouthAEnxxgaloroAmerican/N2025+Australia1.9AustraliaMountOwen2026+(GlendellMine)2026+18Continued2027+OperationsGlencoreE20247TC,CCLAProject2023MtPleasantMAuAsCtrHaliEanergyE2027+10.5TCLAOptimisation2026+Project2025+AustraliaNarrabriStage3WhitehavenCoalE9TCMA2025AustraliaNExetwesntsaionnMPinroejectCentennialCoalE1.6TC,CCLAAustralia2026+AustraliaNewWilkieNEneewrgWyilkieN20232.4TCMAAustralia2025AustraliaOSoliuvethDownsPReemsoburrockeesN2027+6CCMA2025+AustraliaOSoliuvethDSotawgnes2PReemsoburrockeesE20289CCLA2025AustraliaRolleston20282027+AustraliaExpansionGlencoreE..5TCLAAustralia2025AustraliaProject..Australia2027RussellVale..UndergroundWollongongCoalE1CCMAExpansionRevisedProjectBHPBilliton/SarajiEastMitsubishiN7CCLAAllianceSpurHillUndergroundMalabarCoalN6TC,CCLACoalProjectStratfordYancoalAustraliaE1.2TCMAextensionVEixctkeenrsyionProjectWhitehavenN5.5TC,CCMAWallarah2CoalKCoorrepaResourcesN4TCLAProjectAustraliaWaltonAquilaResourcesN1.6PCILABHPBilliton/AustraliaWardsWellMitsubishiN5CCLAAllianceAustraliaWashpoolAquilaResourcesN2.6CCLAAustraliaWEailslutnga/VermontPReemsoburrockeesE4TC,CC,PCILAAustraliaWinchesterSouthWhitehavenCoalN8.5TC,CCLABotswanaBoomslangTlouEnergyN..TCLAProjectCanadaCrownMountainJRaemsoeusrocnesN1.9CC,PCILACanadaElkoPCaocailficAmericanN1.25CCLACanadaFEoxtredninsgioRnivPerrojectTeckCoalE10CCLACanadaChinookMReosnoteumrcesN..CCLAPage121IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026CountryProjectCompanyTypeEarliestFullResourceStatusstart-upcapacityCanadaGrandeCacheCSTN(Mtpa)CCLACanadaSummitMine142024CCLACanadaGroundhogSummitCoalInc.N..1.7TCLACanadaMurrayRiver..CCLACanadaMichelCoalAtrumCoalN20261.3CCLAProject2023MACanadaHDMiningN20260.9LAQuintetteNorthCoalN20226LA..2LAConuma20233.5CCMAresources,earlierN..LACanadaTenasTeckResources20240.75CCMAAItollcehguianceCoal/N..LACanadaWolverine-..LAHermannCRoensouumraceCsoLatld.N20211CCMAIndonesiaAmendment2021MAProjectAdaroN2026+..CCLAIndonesiaAdaroMetCoal..LAIndonesiaCompaniesIATAN..1.9TCMA(AMC)..LAIndonesiaConcessionsAdaroN2023..TCMAArthacoPrima2024MAIndonesiaEnergiCokalN20232CC,PCIMAMongoliaBukitEnim..MAMongoliaEnergiMECCoalN20255TCLAMongoliaTambangBenua2023MAMongoliaAlamRayaAspireMiningN20261CCLAMozam-(TBAR)project2023MAbiqueTeknoOrbitAspireMiningN..4CCLANewPersadaZealandNuursteiCokingSakerResourcesN3CCPolandProjectOvootETordlgeoniesTavanE10CCRussiaTalbotGroup,ShinejinstNipponSteelandN7TC,CCRussiaTavanTolgoiPOSCORussiaExtensionBRaetshouurrsctesR0.9CCRussiaRussiaRevuboePrairieMiningN6.3CCRussiaEscarpmentTCiogaelrsLiRmeitaeldmN0.65TC,CCRussiaSouthJanKarskiSUEKE3.5TCAfricaProjectSouthAmaamNorthA-PropertyE25TC,CCAfricaProjectFcoalmineKolmarE8CCChernogorskySUEKE3TCElgaExpansionAEONN5CCInaglinsky-2IndustrialPravoberezhnyWest-TaymyrMetallurgicalE1.3CCIndustrialClusterHoldingTikhovaStage2WOpecsocoal/ArnotE5TCArnotcoalmineGkalencore/ShanduN1.2TCArgentCollieryPage122IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026CountryProjectCompanyTypeEarliestFullResourceStatusstart-upcapacity(Mtpa)SAforuictahUmzilacoalmineCanyonCoalN20233.6TCMASAforuictahEloffcoalprojectUniversalCoalE..2.4TCMASAforuictahGilacoalmineCanyonCoalN..1.8TCLASAforuictahGmuingeulethucoalCanyonCoalN20233.6TCMASouthKhwezelaTRheusnoguerclaesE20304.6TCLAAfricaextensionLimitedSAforuictahKoornfonteinOCBMliancekraRlsoyaltyE..3TCLASAforuictahM1akhadoPhaseMCMiningN20231.1TC,CCMASAforuictahM2akhadoPhaseMCMiningE20261.2TC,CCLASAforuictahUmkinweenamacoalCanyonCoalN..0.6TCLASAforuictahWproejletecvtredencoalSeritiE..8TCMASAforuictahSmuinkeumacoalCanyonCoalN20257TCLASAforuictahTprhoujescotcoalCanyonCoalN20241.2TCLAUkraineLubelLCuobmeplaCnoyalN..5.2CCLAUKinnigteddomLochinvarNExepwloAragteionN20251.4CCLAUKinnigteddomWCoolloiedrhyouseWMiensintgCumbriaN20252.5CCLAUStnaitteedsBlueCreekNo.1WarriorMetCoalE20254.3CCLAUStnaitteedsLongviewNRoerstshoCurecnetsra,lLLCN20233CCMAUStnaitteedsRAMMineRRaemsoaucroces,Inc.N20250.5CCLAUnitedRiverViewAllianceCoalStatesHendersonPortalLLCN20240.8TCMA1Notes:N=Newproject.E=Expansion.R=Reopening.TC=Thermalcoal.CC=CokingCoal.PCI=Pulverisedcoal.Page123IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026DefinitionsCoal:Asolid,combustiblefossilsedimentaryrock.Coalcomesfromburiedvegetationtransformedbytheactionofstrongpressureandhightemperaturesovermillionsofyears.Coalrank:Thedegreeoftransformationfromtheoriginalplantsource.Itislooselyrelatedtotheageofthecoalandismainlydeterminedfromrandomreflectanceofthevitrinite,oneofcoal’sorganiccomponents.Theranksofcoal,indecreasingorderoftransformationfromhightolow,are:anthracite,bituminouscoal,sub-bituminouscoal,ligniteandpeat.Thisreportdistinguishesbetweenhardcoal(anthracite,bituminousandsub-bituminouscoal)andlignite,whilepeatisnotconsidered.Coalclassification:Referstoarangeofcoalage,compositionandotherproperties.Manyclassificationsareusedaroundtheworldwiththemainparameterbeingthecoalrank,supplementedbyitsintendeduse,i.e.thermalormetallurgicalapplications.Coalquality:Representsavarietyofpropertiesexhibitedbycoalwhenitisused.Calorificvalueandimpuritycontentarethemainparametersdefiningthequalityofthermalcoal,whereascakingproperties,resistanceandimpuritycontentarethedistinguishingcharacteristicsforcokingcoal.Thermal(orsteam)coal:Referstohardcoalusedforpurposesotherthanmetallurgyinthisreport.Cokingcoal:High-qualitycoaltoproducecokeusedinblastfurnacestomakepigiron.Cokingcoalandmetallurgicalcoalaretermssometimesusedinterchangeably.Semi-softcoal:High-qualitysteamcoalmixedwithcokingcoaltoproducecokeforblastfurnaces.Pulverisedcoalinjection(PCI)coal:Ahigh-qualitysteamcoalinjectedintoablastfurnacetoreducecokeconsumption.Metallurgicalcoal:Referstocokingcoal,semi-softcoalandpulverisedcoalInjectioncoalinthisreport.Althoughanthraciteisoftenusedformetallurgicalpurposes,itisclassifiedasthermalcoalinthisreport.Run-of-minecoal:Rawcoalasitisminedbeforeanyprocessing.Tonneofcoalequivalent(tce):Aunitofenergywidelyusedintheinternationalcoalindustry.Itisdefinedas7millionkilocalories(kcal).Therefore,therelationshipbetweentceandphysicaltonnesdependsonthenetcalorificvalueofPage124IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026thecoal.Onetonneofcoalwithanetcalorificvalueof7000kcalperkilogramme(kcal/kg)represents1tce.Coalmining:Atechniqueusedtoremovecoalfromanaturaldeposit.CoaldepositsintheEarth’scrustoccuratvariousdepthsandseamconfigurations,whichdeterminetheminingmethodused.Generally,deepdepositsareminedundergroundandshallowdepositsareexploitedthroughopencastmines.Thestripratiolargelydetermineswhetheranopencastmineisprofitableornot.Stripratio:Theoverburdenorwastematerialremoved,usuallyexpressedascubicmetrespertonneofcoalextracted.Highstripratiosmakeopencastminingunprofitable.Opencastmining:Amethodinwhichtheoverburdenisfirstdrilled,thenblasted,andwhenthedepositisaccessible,coalisremovedinasimilarwaytotheoverburden.Toremovethecoal,powershovels,conveyorbeltsandtrucksmaybeused,aswellassomeextremelylargemachinerysuchasdraglinesandbucketwheels.Opencastminingisusuallylesslabour-intensivethanundergroundmining,buthashigherconsumablecosts,e.g.fortyres,dieselandexplosives.Generally,opencastmethodsimplygreaterenvironmentalimpactthanundergroundmining.Undergroundmining:Amethodinwhichaccesstocoalseamsisgainedthroughundergroundshafts,galleriesandtunnels.Althoughtherearemanywaystomineanundergrounddeposit,coalisusuallystrippedbyautomaticshearersorcontinuousmechanicalminersusingeithershort/longwallsorroom-and-pillarexploitations.Undergroundminingisgenerallymorelabour-intensiveandrequireshighercapitalinvestmentsthanopencastmining.Coalwashing/upgrading:Aprocessinwhichimpurities(i.e.ash,moisture)arepartiallyremovedfromrawcoaltoproduceahigher-qualitycoal.Page125IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026RegionalgroupingsAfrica:Algeria,Angola,Benin,Botswana,Cameroon,RepublicoftheCongo(Congo),Côted’Ivoire,DemocraticRepublicoftheCongo,Egypt,Eritrea,Ethiopia,Gabon,Ghana,Kenya,Libya,Mauritius,Morocco,Mozambique,Namibia,Niger,Nigeria,Senegal,SouthAfrica,SouthSudan,Sudan,UnitedRepublicofTanzania(Tanzania),Togo,Tunisia,Zambia,ZimbabweandotherAfricancountriesandterritories.AsiaPacific:ASEANregionalgroupingandAustralia,Bangladesh,thePeople’sRepublicofChinaandHongKong(China),ChineseTaipei,India,Japan,Korea,DemocraticPeople’sRepublicofKorea(NorthKorea),Mongolia,Nepal,NewZealand,Pakistan,SriLanka,andotherAsiancountriesandterritories.CentralandSouthAmerica:Argentina,PlurinationalStateofBolivia(Bolivia),Brazil,Chile,Colombia,CostaRica,Cuba,Curaçao,DominicanRepublic,Ecuador,ElSalvador,Guatemala,Haiti,Honduras,Jamaica,Nicaragua,Panama,Paraguay,Peru,Suriname,TrinidadandTobago,Uruguay,BolivarianRepublicofVenezuela(Venezuela),andotherCentralandSouthAmericancountriesandterritories.China:ThePeople'sRepublicofChinaandHongKong.Eurasia:Armenia,Azerbaijan,Belarus,Georgia,Kazakhstan,Kyrgyzstan,RepublicofMoldova,RussianFederation(Russia),Tajikistan,Turkmenistan,UkraineandUzbekistan.Europe:EuropeanUnionregionalgroupingandAlbania,BosniaandHerzegovina,Iceland,Gibraltar,Kosovo,Montenegro,Norway,RepublicofNorthMacedonia,Serbia,Switzerland,RepublicofTürkiyeandtheUnitedKingdom.EuropeanUnion(EU):Austria,Belgium,Bulgaria,Croatia,Cyprus,CzechRepublic,Denmark,Estonia,Finland,France,Germany,Greece,Hungary,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,Netherlands,Poland,Portugal,Romania,SlovakRepublic,Slovenia,SpainandSweden.MiddleEast:Bahrain,IslamicRepublicofIran(Iran),Iraq,Israel,Jordan,Kuwait,Lebanon,Oman,Qatar,SaudiArabia,SyrianArabRepublic(Syria),theUnitedArabEmiratesandYemen.NorthAmerica:Canada,MexicoandUnitedStates.ASEAN:BruneiDarussalam,Cambodia,Indonesia,LaoPeople’sDemocraticRepublic(LaoPDR),Malaysia,Myanmar,Philippines,Singapore,ThailandandVietNam.Page126IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026AbbreviationsAPIArgus/McCloskey’sCoalPriceIndexARAAmsterdam,RotterdamandAntwerpASEANAssociationofSoutheastAsianNationsBAMBaikal-AmurMainlineCCGTcombined-cyclegasturbineCCScarboncaptureandstorageCFRcostandfreightCIFcost,insuranceandfreightCILCoalIndiaLtdCPECChina-PakistanEconomicCorridorCTXcoal-to-chemicalsCVcalorificvalueEIAEnergyInformationAdministration(UnitedStates)ESGenvironmental,social,andgovernanceEUAEUAllowanceFeNiferronickelFOBfreeonboardGDPgrossdomesticproductHPALhigh-pressureacidleachIEAInternationalEnergyAgencyJETPJustEnergyTransitionPackageM&AmergersandacquisitionsMDOMineDevelopercumOperatormetmetallurgicalMHPmixedhydroxideprecipitateMSPmixedsulphideprecipitateOECDOrganisationforEconomicCo-operationandDevelopmentPCIpulverisedcoalinjectionPRCpeakratedcapacityPVphotovoltaicRKEFrotarykiln-electricfurnaceSCCLSingareniCollieriesCompanyLtdSNGsyntheticnaturalgasTTFTitleTransferFacility(Netherlands)VATvalue-addedtaxy-o-yyear-on-yearPage127IEA.CCBY4.0.Coal2023GeneralannexAnalysisandforecastto2026UnitsofmeasureBtbilliontonnesGWgigawattkcalkilocaloriekgkilogrammekmkilometrektkilotonnekWkilowattMtmilliontonnesMtpamilliontonnesperannumMWmegawattMWhmegawatthourttonneTWterawattTWhterawatthoursPage128IEA.CCBY4.0.InternationalEnergyAgency(IEA)ThisworkreflectstheviewsoftheIEASecretariatbutdoesnotnecessarilyreflectthoseoftheIEA’sindividualmembercountriesorofanyparticularfunderorcollaborator.Theworkdoesnotconstituteprofessionaladviceonanyspecificissueorsituation.TheIEAmakesnorepresentationorwarranty,expressorimplied,inrespectofthework’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thework.Forfurtherinformation,pleasecontact:GCP(gcp@iea.org).SubjecttotheIEA’sNoticeforCC-licencedContent,thisworkislicencedunderaCreativeCommonsAttribution4.0InternationalLicence.Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Unlessotherwiseindicated,allmaterialpresentedinfiguresandtablesisderivedfromIEAdataandanalysis.IEAPublicationsInternationalEnergyAgencyWebsite:www.iea.orgContactinformation:www.iea.org/contactTypesetinFrancebyIEA-December2023Coverdesign:IEAPhotocredits:©Shutterstock

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