Earlier this month, the U.S. Department of the Interior did something that just a couple of years ago would have been unthinkable. It permitted a coal mine in Tennessee. New coal mines are being approved around the world despite calls for a ban on the commodity. And this might yet intensify.
Last year saw the slowest growth in global coal mine capacity since 2014, energy transition advocacy Global Energy Monitor reported earlier this week. Total new capacity that opened last year stood at 105 million tons, which was a 46% decline from the previous year. This certainly does not sound like a growth spurt is on the way, but it may well be. Because coal miners and governments are planning a lot more coal capacity additions.
Per Global Energy Monitor, there are plans in place for 850 new coal mines globally, including existing mine expansions, extensions, and recommissioning. Capacity under development globally from these projects amounts to 2.27 billion tons annually—and half of it is in China. That would be the same China that is the world leader in wind and solar capacity, and that also happened to consume 56% of the world’s coal in 2024. The same China that, together with India and the rest of Asia, drove global coal demand to a record high in the same year.Meanwhile, Europe’s transition champion Germany saw its coal consumption spike earlier this year amid an extended wind drought in the first two months of the year in further evidence that supply reliability is vital when it comes to electricity and even the most ambitious transition governments occasionally have to admit it by leaning on coal to keep the lights and the heating on. This is precisely why any celebration of a 10-year low in new coal capacity approvals would be rather premature, and we may yet see a reversal of that trend in the coming years.
This is rather unfortunate, because the UN has estimated that limiting the rise in global average temperatures to 1.5 degrees Celsius compared with pre-industrial times would require a severe reduction in coal production—and consumption. More specifically, the UN reckons global coal production must be cut by 75% from 2020 levels by 2030 to stay within the 1.5-degree scenario. The chances of that happening were slim to begin with, but now, with an AI race heating up in the tech space, the chances have firmly gone down to zero.
Global coal consumption hit a record high last year amid continuing efforts to replace coal with wind and solar. Consumption continues strong this year as well, and it’s not just in China or India, or, indeed, the rest of Asia. The first half of this year saw a 2% increase in coal generation in Europe as well. This was the highest rate of coal generation in two years in Europe as wind power generation dropped by 9%. And it happened despite a much more pronounced rise in gas-fired generation, at 19%, which made it the highest level of gas generation in three years.
What these figures suggest is that coal is not going anywhere anytime soon. Gas can be a comparable replacement for coal, but even gas cannot replace all coal—not all gas is competitive with coal on price, which is bad news for energy importers but news they need to acknowledge and plan accordingly.
Here is more proof of that fact. Global operating coal power capacity has increased by 13% since 2015, data from Global Energy Monitor showed earlier this year. 2015 was the year when countries reached a deal on the Paris Agreement to limit global warming to 1.5 degrees Celsius, and since then, the world has added a total of 259 GW of operating coal power capacity. As of the end of 2024, total operating coal power capacity hit a record high of 2,175 GW, while another 611 GW of capacity was under development, Global Energy Monitor also said.
In other words, while certain organizations push for less coal use, the world keeps consuming ever more coal—even as it builds more of the sort of energy capacity that those organizations say can replace coal. Trillions are being poured into wind and solar, and batteries, a lot of it in China, and yet China remains the king of coal globally. Meanwhile, the king of gas, U.S., saw its own coal consumption spike this year, to a two-year high, even as wind, solar, and hydro posted a record in output over the first half of the year.If even the biggest natural gas producer in the world can experience a 20% spike in coal consumption because gas has become temporarily expensive, then the world is nowhere near the stage where it can reduce coal consumption at all, let alone by the percentage suggested by the UN. In fact, coal demand is likely to keep growing further in response to AI-fuelled growth in electricity demand.
