India to fuel biggest rise in coal demand till 2030 despite global slowdown: IEA

India expected to account for largest increase in coal consumption till 2030

New Delhi: India is expected to account for the largest increase in coal consumption till 2030, with demand projected to rise by an average of 3% a year, adding more than 200 million tonnes, even as global coal demand is likely to edge down around 2030 with renewable energy, natural gas and nuclear power gaining ground, the International Energy Agency’s Coal 2025 report said.

The fastest growth, the IEA said, is forecast to occur in Southeast Asia, where demand is set to increase by over 4% per year by 2030. (Representative photo)

The fastest growth is expected in Southeast Asia, where demand is set to increase by over 4% per year by 2030, IEA added.

In contrast, the European Union and the United States register further declines of 153 Mt and 106 Mt, respectively, as phase-out policies and fuel switching accelerate. In the rest of the world coal demand is expected to decline by 179 Mt, reflecting mixed trends across Africa, South Asia (excluding India) and other emerging markets.

To be sure, coal’s share in India’s electricity mix is likely to fall from 70% in 2025 to 60% by 2030, as renewable and nuclear power generation continue to grow in India.

HT reported on July 16 that India has surpassed its target of installing 50% of its power capacity from non-fossil fuel sources, achieving a key nationally determined contribution (NDC) under the Paris Agreement five years ahead of the 2030 target. India has a goal of installing 500 GW of non-fossil based capacity by 2030 through a set of actions that will bolster renewable energy generation further. Further, the Centre has introduced a bill in Parliament that proposes the grant of licences to private companies to operate nuclear power plants, the removal of an existing contentious liability clause for suppliers of fuel and technology, as well as the rationalisation of the levels of payouts by operators in case of accidents.

As of August 2025, India’s total installed power generation capacity stood at 495 GW, including 223 GW of coal fired capacity (plus around 30 GW of captive coal-fired power plants), 123 GW of solar PV, 52 GW of wind and 42 GW of hydropower, plus smaller figures for gas, nuclear and others. While the government continues to expand non-fossil generation capacity in line with its 500 GW target for 2030, this year India commissioned 20 new coal-fired power plants totalling 14 GW, with additional capacity under construction, the IEA stated.

Interestingly, in China, which currently accounts for more than half of global coal use, demand is expected to fall slightly by the end of the decade. China continues to deploy renewable energy capacity at a rapid pace and it is looking to reach a peak in domestic coal consumption by 2030.

“Among major producers, India is forecast to have the highest output growth, based on strong domestic demand and favourable government policies. The biggest uncertainty is in China, where even small policy changes or demand fluctuations can affect coal output sufficiently to have an impact on international markets,” the report stated.

“Despite uncharacteristic trends in several key coal markets in 2025, our forecast for the coming years has not changed substantially from a year ago: we expect global coal demand to plateau before edging down by 2030. “That said, there are many uncertainties affecting the outlook for coal, most notably in China, where developments – from economic growth and policy choices to energy market dynamics and weather – will continue to have an outsize influence on the global picture. More broadly, trends in electricity demand growth and the integration of renewables worldwide could impact coal’s trajectory,” IEA Director of Energy Markets and Security Keisuke Sadamori said in a statement.