The International Energy Agency said in its mid-year update that global coal demand is likely to rise by 1.2% in 2026 to a record 8.94 billion tonnes. The agency links the increase in part to ongoing constraints on energy trade through the Strait of Hormuz amid tensions in the Middle East, which have pushed up oil and natural gas prices.
According to the IEA, reduced LNG shipments have tightened energy supply in a number of countries and encouraged a switch from gas to coal. The agency noted that coal flows themselves are barely exposed to the Strait of Hormuz, but disruptions to shipping there have squeezed natural gas supply, lifted prices, and prompted some power systems to substitute coal for gas.
Coal use is rising across several Asian markets. The report cites Japan, India, Bangladesh, the Philippines, South Korea, Thailand, Taiwan, China, and some European countries as economies that have had to raise coal consumption to cover the shortfall. In China, coal use has also increased in chemical production, not only in power generation, as high oil prices alter industrial fuel choices.
The agency also warned that demand could climb further in the coming months if an especially strong El Niño develops, as forecast. Higher-than-normal temperatures and weaker hydropower output could raise electricity demand across major Asian markets, including India and Vietnam.
While global coal production matched a record high in 2025, it is expected to edge down slightly year on year in 2026. Demand, however, is still forecast to increase. The IEA expects consumption in the world’s two largest coal users, China and India, to grow by 1% and 4.2% respectively, reaching 5 billion tonnes and 1.353 billion tonnes.
The outlook for 2027 is less clear because much depends on how trade through the Strait of Hormuz evolves. If LNG flows recover next year, natural gas prices could ease and shift the balance back between gas and coal. If restrictions remain in place, global demand will likely continue to rise.
The prospect of heavier coal use is also troubling for climate policy. The United Nations has acknowledged for the first time that the world is on track to overshoot the goal of limiting global warming to 1.5°C above pre-industrial levels. Even after countries agreed at the 2021 COP26 summit in Glasgow to “phase down” coal use, many economies have continued relying on the fuel to meet rising electricity demand.
The article points to Europe as well. Italy announced in March that it planned to delay the shutdown of coal-fired power plants by 13 years. Germany has also said it is considering restarting some coal plants to meet the country’s energy needs.
The United States stands out from the broader trend. The IEA expects U.S. coal demand to fall by about 7% in 2026 after an unexpected jump the year before. The article attributes that to abundant, low-cost domestic natural gas and a strong addition of solar and wind capacity, both of which reduce the need for coal.
At the same time, the emissions picture remains worsening. Energy Institute data show that global energy-related CO2 emissions rose by 1.1% in 2025 to 35.806 billion tonnes. The article says the United States accounted for about 13.3% of the increase in direct energy-related CO2 emissions, and roughly one-third of the global increase under a broader measure that also includes methane and flaring emissions.
The IEA outlook underlines how stress in energy markets is reshaping the fuel mix, with coal again emerging as a temporary but increasingly used substitute when gas becomes scarce and expensive.
