Coal’s Future in Limbo: Will Industrialized Nations’ Efforts to Phase Out Fossil Fuel Extinguish Global Demand?

In recent years, the G-7 countries have made a commitment to phasing out coal for electricity generation by 2035 in order to reduce reliance on the dirtiest fossil fuel. However, the future of coal as an energy source may be determined in other regions of the world. While major industrialized nations like Germany, France, and the United States have set targets to reduce coal use, global demand for coal has continued to rise.

One example of this can be seen in shareholders of Glencore, a major raw materials company, who opposed a spin-off of the company’s profitable coal business. Despite commitments from the G-7 countries to phase out coal by 2035, some exceptions have been made for capturing and storing emissions. This decision reflects a broader trend towards reducing coal use in industrialized countries, although challenges remain, particularly in regions with high coal dependency like China.

Countries like China, India, and Indonesia continue to build new coal-fired power plants and contribute to ongoing global coal consumption. The expansion of artificial intelligence and data centers is also expected to increase electricity demand in these regions, potentially leading to continued reliance on coal as an energy source. While the IEA forecasts that global coal demand may peak in the coming years, uncertainties remain about its future role in the energy transition.

The decisions made by countries like China and the development of new technologies and industries will play a crucial role in determining whether or not coal will continue to be used as an energy source in these regions. With increasing awareness of the environmental impacts of coal use and growing pressure from governments around the world to transition to cleaner energy sources, it is clear that changes must be made if we want a sustainable future for our planet.