The obituaries for coal have been written way too soon. Despite ambitious climate pledges and the global push for renewable energy, the unrelenting surge in energy demand is ensuring coal’s continued dominance for decades to come. The stark reality? The world is on track to overshoot the critical 2°C warming threshold, with coal remaining a central pillar of the global energy mix.
“Nothing can destroy coal,” U.S. President Donald Trump once proclaimed at the World Economic Forum, a statement that rings increasingly true. While domestic coal consumption in the U.S. has declined, exports have surged, supplying the world’s insatiable appetite for the most carbon-intensive fossil fuel. Global coal capacity hit a record 2,175 gigawatts in 2024, and demand exceeded 8.77 billion tons, a figure the International Energy Agency (IEA) predicts will remain steady through at least 2027.
The Relentless Demand for Coal
China: Already the world’s largest coal consumer, China increased its coal imports by 14.4% in 2024, reaching a record 542.7 million metric tons. Though renewables accounted for nearly 30% of its power mix, coal remains indispensable. When hydropower output falters due to droughts, Beijing turns to coal to prevent blackouts. Structural limitations—such as the inability to efficiently transfer solar and wind power across vast provinces—ensure coal’s role as the backbone of China’s grid for the foreseeable future.
India: India’s energy needs are skyrocketing due to economic expansion, urbanization, and extreme heat waves driving demand for cooling. While the country has made significant strides in renewable energy—now making up over 46% of installed capacity—coal remains its foundation. Industries such as steel and cement, essential for infrastructure growth, rely heavily on coal, and the country’s consumption shows no signs of slowing.
Southeast Asia: Nations like Bangladesh, Indonesia, Vietnam, and the Philippines are doubling down on coal. Vietnam’s coal imports are at a decade high, Indonesia’s coal production reached 831 million tons, and the Philippines has overtaken China as Southeast Asia’s most coal-dependent nation. A major factor in coal’s resilience is soaring gas prices following Russia’s invasion of Ukraine, which forced many developing economies to scale back plans for gas-based energy and turn back to coal as a more affordable alternative.
The U.S. Can't Let Go of Coal
Even as the U.S. aggressively expands renewable energy capacity under policies like the Inflation Reduction Act, coal remains deeply entrenched. The U.S. still holds the world’s largest coal reserves and ranks as the third-largest coal consumer globally. Though domestic consumption is projected to decline, the pace of coal plant retirements has slowed as utilities brace for rising electricity demand. Meanwhile, U.S. coal exports remain strong—and could even rise—feeding the world’s enduring dependence on fossil fuels.
AI and Data Centers: The Unexpected Coal Revival
Just as coal demand appeared to be in terminal decline, an unexpected factor has emerged: artificial intelligence. AI-driven data centers require immense amounts of energy, fueling a rapid spike in electricity consumption. Utility companies, faced with surging demand, are delaying the retirement of coal plants and even proposing new fossil fuel facilities. From Southern Company in Georgia delaying coal plant retirements to meet data center demand, to skyrocketing development of AI-focused server farms, utilities in many regions are shelving retirement plans for old coal-fired plants or proposing new ones.
The IEA estimates that global electricity demand will increase by 3,500 terawatt-hours between 2025 and 2027—more than the entire annual electricity consumption of Japan. This unprecedented surge is outpacing the growth of renewables, leaving coal as the preferred, cost-effective solution to fill the gap.
The 2°C Target Slips Further Away
Sadly, the world’s reliance on coal is proving unshakable, locking countries into a high-carbon future. Even in regions aggressively scaling up renewables, grid limitations, economic constraints, and surging demand prevent a smooth transition away from fossil fuels.
With coal demand remaining stubbornly high, hopes of limiting global warming to 2°C over pre-industrial levels are fading. As long as coal remains the cheapest, most accessible energy source for many nations, the world’s collective emissions will likely overshoot climate targets. In short, the enduring global reliance on coal—underpinned by record demand in Asia, a surge in AI-driven data centers, and infrastructural hurdles to renewables—means “King Coal” reigns on. Barring an unprecedented, coordinated shift in energy policy and deployment, curbing greenhouse gas emissions fast enough to hold temperatures below that critical 2°C threshold seems increasingly out of reach.
Despite decades of warnings, King Coal reigns on— as strong as ever.
