Money Dec 18, 2012
London: Powered by the growth in emerging market giants China and India, coal is set to surpass oil as as the world's top fuel source by around 2017, the International Energy Agency forecast today.
Coal's share of the global energy mix continues to rise, and by 2017 coal will come close to surpassing oil as the world's top energy source, the International Energy Agency (IEA) said, releasing its annual Medium-Term Coal Market Report (MCMR).
China and India will lead the growth in coal consumption over the next five years. The report said China will surpass the rest of the world in coal demand during the outlook period, while India will become the largest seaborne coal importer and second-largest consumer, surpassing the US.
"Thanks to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in global energy demand during the first decade of the 21st Century," IEA Executive Director Maria van der Hoeven said.
"This report sees that trend continuing. In fact, the world will burn around 1.2 billion more tonnes of coal per year by 2017 compared to today, equivalent to the current coal consumption of Russia and the US combined.Coal's share of the global energy mix continues to grow each year, and if no changes are made to current policies, coal will catch oil within a decade," Hoeven said.
Although the growth rate of coal slows from the breakneck pace of the last decade, global coal consumption by 2017 stands at 4.32 billion tonnes of oil equivalent, versus around 4.4 billion tonnes for oil, based on IEA medium-term projections.
The IEA expects that coal demand will increase in every region of the world except in the US, where coal is being pushed out by natural gas. The report notes that in the absence of a high carbon price, only fierce competition from low-priced gas can effectively reduce coal demand.
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