While the world is attempting to move away from coal consumption globally, the coal industry is not going down without a fight, especially in light of the recent energy crisis. In fact, in 2022, global coal consumption, undoubtedly led by the countries with the highest coal consumption by year, increased by 6.3% in 2022 as compared to the previous year. Most of this growth is led by emerging markets where industries are continuing to grow at a fast pace, with a growth of 8.8.% in China, 52% in Indonesia and 8.3% in India.
While advanced economies have been focusing on switching to renewable energy industries, Russia's war with Ukraine and the ensuing massive increase in natural gas prices have further shifted the focus to coal, which is why even Europe saw coal consumption increase by a modest 2.3% in 2022, led by Italy with saw an increase of 48%, followed by Germany (+3.5%) and Turkiye (+3.2%). On the other hand, other countries and regions across the world registered a significant decline with the U.S. seeing coal consumption fall by 5.1% in the U.S. while South Africa led a 6% drop in Africa. Currently, China is easily among the countries with the highest coal consumption by year, and along with India, is mostly responsible for Asia accounting for around 75% of total global coal consumption. Europe follows Asia by accounting for 14% of global coal consumption which itself is then followed by the U.S. for 6%.
An aerial view of an open cut coal mine, showing the vastness of the company's mining operations.
While the aforementioned statistics seem to bode well for the coal industry and the countries with the highest coal consumption by year, the truth is that the long-term future for coal is still uncertain, as the transition to green energy continues globally. In China, one of the biggest coal consumers and the biggest coal producer in the world, coal usage has stagnated in the past decade as the country aims to become the global hub for green technology and has been phasing out fossil fuel usage in favor of renewable energy. Meanwhile, lower natural gas prices led by the shale gas revolution also resulted in coal usage in the U.S. dropping significantly. According to the International Energy Agency, demand for coal will decline to 2026, even though 2023 has seen growth of 1.3%, allowing production to cross 8.5 billion tons for the first time. However, 2023 will see double digit drops of 10% in both the U.S. and the European Union, which will drive a decline of 2.3% in 2026 as compared to 2023.
Even now, major coal companies are missing earnings, with one such company being Peabody Energy Corporation (NYSE:BTU) whose reported EPS of $0.82 missed analyst expectations of $1.16 for Q3 2023. In its Q3 2023 earnings call, the CEO of Peabody Energy Corporation (NYSE:BTU) was still optimistic and stated "In the third quarter of 2023, we delivered strong operational results with better-than-expected production and effective cost management. We also advanced initiatives at Shoal Creek in North Goonyella that illustrate our ongoing commitment to continue investing in our seaborne metallurgical portfolio. During the quarter, our Board approved full funding at North Goonyella for the completion of initial development through the commencement of longwall operations in 2026. We are also excited to announce that we have reached an agreement to acquire a large portion of the Wards Well coal deposit adjacent to our existing North Goonyella mine. This is a tremendous opportunity to extend a world-class coal deposit and leverage our existing infrastructure and equipment. Before I expand on the quarter, I want to thank our global employees for their continued focus and commitment to working safely and efficiently. Now, turning to the global coal markets. Seaborne thermal coal markets remained volatile during the quarter with modest pricing improvements. Robust, but moderating coal and natural gas inventories in the Northern Hemisphere have continued to weigh on demand for high-energy thermal coal, coupled with better supply prospects due to drier weather on Australia's East Coast, resulting in Newcastle coal trading within a range of $130 to $160 a ton. China's year-to-date imports of lower-grade thermal coals continue to significantly surpass the prior year, with an increase in the annual thermal coal input run rate of approximately 93% over 2022 levels. India has also increased seaborne market participation, as our power demand continues to grow. Recent import trends have led the IEA to report that elevated global demand for thermal coal imports so far during 2023 are pointing to 6% year-on-year growth in overall seaborne coal trade versus 2022. Within the seaborne metallurgical market, global crude steel output during the quarter continued to be variable, with weaker production rates in Europe and South America, offset by notable year-on-year crude steel production growth in some Asian markets."
While the share price of Peabody Energy Corporation (NYSE:BTU) fell in the first three quarters, a late rebound in December means that its share price is where it was around a year ago. Meanwhile, another major coal company in Alpha Metallurgical Resources, Inc. (NYSE:AMR) has had a fantastic year where its share price jumped by 148% YTD 2023. This was achieved despite the declining price of coal, which was called out in the company's Q3 2023 earnings call, where it stated " Realizations in the incidental thermal portion of the Met segment decreased to $92.22 per ton in Q3 as compared to $115.50 per ton in Q2 due to the lower market pricing for thermal coal. And all other category realizations were also down as a result of the declining pricing environment for thermal coal coming in at $68.32 for the third quarter, as compared to $99.66 per ton in the second quarter. Third quarter cost of coal sales for our Met segment increased to $109.95 per ton, up from $106.35 per ton in the second quarter. Cost of coal sales in the all-other category decreased quarter-over-quarter to $84.73 per ton as compared to $88.59 per ton in the second quarter 2023."
Methodology
To rank the countries with the highest coal consumption by year, we considered data for each country for both 2020 and 2021, with said data obtained from BP's Statistic Review of World Energy. We then calculated the average ranking of each country for both years, and then, ranked each country based on highest consumption to lowest.
Total consumption in 2021 (in exajoules): 0.26
While Chile still has relatively high coal consumption, wind and solar energy are now both producing more power than coal in the country, showcasing steps in the right direction.
Total consumption in 2021 (in exajoules): 0.31
In December 2023, Morocco joined a global coalition to phase out coal usage and consumption, with the country highlighted by various organizations as having great potential for renewable energy.
Total consumption in 2021 (in exajoules): 0.54
While the Czech Republic has made plans to phase out coal usage, production actually increased in 2022, and the country's goal of phasing out coal by 2033 seems unlikely to be met.
Total consumption in 2021 (in exajoules): 0.48
Two Canadian provinces, Nova Scotia and New Brunswick, vowed to end coal usage by 2030, which will also help Canada drop off this list.
Total consumption in 2021 (in exajoules): 0.67
While Pakistan is unable to fully meet electricity demand, most electricity production is still done through fossil fuels, with the power sector being the biggest coal consumer in the country.
Total consumption in 2021 (in exajoules): 0.71
Brazil is the largest coal consuming country in Latin America, even as 93% of its electricity was generated from clean sources. This explains why Brazil, the 7th most populated country in the world, is so far behind in our list of coal consuming countries.
Total consumption in 2021 (in exajoules): 0.79
Philippines is one of four countries which account for over 50% of total global thermal coal imports, and is also among the biggest CO2 polluters.
Total consumption in 2021 (in exajoules): 0.81
South-East Asian countries are dominant among the highest coal consuming countries, and Thailand still generates 17% of its total electricity through coal.
Total consumption in 2021 (in exajoules): 0.89
While Malaysia, like most countries, is attempting to transition to clean energy, coal still plays an important part in the country's economy, as $375 billion is needed for the country to reach 2050 climate goals.
Total consumption in 2021 (in exajoules): 0.95
Ukraine's coal consumption has been impacted by the war, but because the latest data is pre-2022, it is still counted among the countries with the highest coal consumption by year.
Total consumption in 2021 (in exajoules): 1.56
Employing a policy that is in contravention to the global approach, Kazakhstan is actually investing in coal projects which could impact its sustainability credentials and lead to additional economic complications in the future.
Total consumption in 2021 (in exajoules): 1.67
A heat wave in East Asia in summer 2023 resulted in greater electricity production and hence, higher coal consumption. Around 97% of Taiwan's energy needs are met through imports.
Total consumption in 2021 (in exajoules): 1.63
Australia is one of the biggest coal consuming countries in the world, a fact demonstrated by it being the biggest per capita CO2 emitter among the G20.
Total consumption in 2021 (in exajoules): 1.74
While Turkey is aiming to expand renewable energy, its dependence on coal for energy isn't likely to end anytime soon.
Total consumption in 2021 (in exajoules): 1.88
Poland is home to a fast growing economy, which is particularly reliant on fossil fuels, making it unsurprisingly one of the countries with the highest coal consumption by year. This means that Poland is likely to become the biggest power polluter in the EU.
Total consumption in 2021 (in exajoules): 2.12
While Germany has been aiming for a 2030 coal exit, the plan now seems to be in some doubt after the country's Finance Minister said "Until it is clear that energy is available and affordable, we should end dreams of phasing out electricity from coal in 2030."
Total consumption in 2021 (in exajoules): 2.15
Vietnam may be one of the countries with the highest coal consumption by year, but its own production is unable to satisfy its consumption requirements. A huge jump in imports in 2023 has resulted in higher coal emissions in the country, and shows that Vietnam is still some way away from decarbonization.
Total consumption in 2021 (in exajoules): 3.04
In the first quarter of 2023, South Korea's thermal coal imports reached their highest level since 2018 as it increased coal imports in a bid to facilitate economic growth.
Total consumption in 2021 (in exajoules): 3.28
Indonesia is the biggest coal exporter in the world, and its own consumption is unlikely to decrease anytime soon.
Total consumption in 2021 (in exajoules): 3.41
While Russia is one of the biggest exporters of oil and natural gas, it is also a huge coal consumer, and one of the countries with the highest coal consumption by year. Despite Russia's economy facing a lot of issues because of its war with Ukraine, its Energy Ministry confirmed Russia currently has sufficient coal to last over 300 years.
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Disclosure: None. 25 countries with highest coal consumption by year is originally published on Insider Monkey.
