EU coal demand to fall below 300 million mt in 2025: IEA

EU demand for coal was set to fell below 300 million mt in 2025, marking a significant shift towards cleaner energy sources and a reduction in reliance on coal, the International Energy Agency said.

The IEA, in its mid-year coal update, estimated the EU's coal demand to shrink by 19% to 287 million mt, primarily driven by the increased adoption of renewable energy sources and the improved performance of nuclear power in the bloc.

By embracing cleaner energy alternatives, Europe has been taking significant steps towards meeting its climate targets and promoting a greener and cleaner future.

Additionally, the EU's weak industrial activity and stagnating growth in power demand were the contributing factors to the reduction in coal consumption. The decrease in EU coal demand, along with ongoing decrease in other parts of the world, has been expected to drive global demand lower in 2025.

"Poland's energy sector consumption of thermal coal was 11.59 million mt in January-May 2024, down 12.2% on year, according to the Ministry of Climate and Environment," a Poland-based trader said.

Despite most European countries pushing to phase out coal-fired power, Poland and Germany remain two of the major consumers of the fuel in the continent. Both mainly rely on domestic production to meet their demand and at times float interests for seaborne thermal coal.

Poland and Germany's thermal coal imports slumped in the first half of 2024 with both importing 1.2 million mt and 1 million mt, respectively, compared to 4 million mt and 2.2 million in the corresponding period of 2023.

The fall in demand was expected to continue next year as well with the region's coal demand estimated to decline by 9 million mt on year in 2025.

EU and UK monthly coal imports have been on a decline, falling to the lowest level during the 21st century and in 2024 the region's import were expected to fall below Turkey, which recently surpassed Germany as the largest importer of coal outside the Asia-Pacific region.

After witnessing sharp volatility in recent years, the prices of European-delivered thermal coal in the physical and financial market have been stable.

However, the close connection between coal and gas markets in Europe along with the "influence of third parties" not involved in the physical market may lead to volatility in the financial market prices, the IEA said.

Platts-assessed CIF ARA 6,000 kcal/kg NAR coal averaged $108.80/mt in the first half of 2024, down from $134.15/mt in H1 2023, S&P Global Commodity Insights data showed.