World Energy Outlook 2006

HIGHLIGHTS
CHAPTER 5
COAL MARKET OUTLOOK
� Global coal demand in the Reference Scenario is projected to grow at an
average annual rate of 1.8% between 2004 and 2030, such that coal’s share
in the global energy mix remains broadly constant at around one-quarter.
Coal use rises by 32% by 2015 and 59% by 2030 (expressed in tonnes) –
a significantly faster rate of growth than in WEO-2005. Of the total
increase in demand, 86% comes from developing Asia, particularly China
and India. OECD coal use grows modestly.
� Power generation accounts for 81% of the increase in coal use to 2030,
boosting its share of total coal demand from 68% in 2004 to 73%. Coal
use in final sectors barely increases in many regions and falls in the OECD.
Demand will remain sensitive to developments in clean coal technology
and government policies on energy diversification, climate change and
local pollution, as well as to relative fuel prices.
� Coal is the most abundant fossil fuel. Proven reserves at the end of 2005
amounted to around 909 billion tonnes, equivalent to 164 years of
production at current rates. Around half of these reserves are located in just
three countries – the United States, Russia and China – but twenty other
countries each hold substantial reserves of at least 1 billion tonnes.
Production, processing and transportation costs vary widely.
� Coal needs continue to be met mainly by indigenous production. China
– already the world’s leading coal producer – and India account for over
three-quarters of the 3.3 billion-tonne increase in coal production in
2030 over 2004. The United States sees the biggest absolute rise in
output among OECD countries, accounting for about 8% of global
production growth. Australia, Indonesia, South Africa and Colombia
also contribute significantly. Hard coal output in the European Union,
where costs are generally high, falls as remaining subsidies are phased out,
but brown coal output remains flat. Steam coal accounts for most of the
growth in total world coal output between 2004 and 2030. Safety
remains a major concern in the mining industry in some large producing
countries.
� Global inter-regional trade in hard coal expands at the same rate as demand,
from 619 Mt in 2004 to 975 Mt in 2030. Trade in steam coal grows much
faster than that in coking coal. Trade in brown coal and peat remains
negligible. Australia is expected to extend its lead as the world’s biggest
exporter of coking coal and, along with Indonesia, continues to dominate
steam-coal trade. China remains an exporter, but loses market share, as more
of its output is diverted to rapidly growing domestic markets.
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© OECD/IEA, 2007