SUMMARY: The future of coal is uncertain. The paper analyses the factors driving the fall in demand for thermal coal, presents scenarios on the global coal consumption for 2010-2050, as well as the potential impacts of declining global demand scenarios on major coal producers, consumers and investment. The scenarios on which the paper builds are based, on top-down information on global and regional energy system development, as well as on bottom-up national energy sector information made available to the project team.
KEY FINDING / RECOMMENDATIONS: Even without more stringent climate policy, the balance of risks and opportunities for the global coal market appears significantly on the downside. Factors such as the decreasing energy intensity of “late mover” developing countries’ growth pathways, local air pollution and technological advances reflected in the quickly increasing cost competitiveness of renewables can plausibly drive a significant decline in global coal demand. The scenarios explored in this report suggest that it is time for governments to begin to implement credible transition policies. A first step for policy makers to manage these uncertainties is through a focused dialogue on the future of the sector in their respective countries.