India’s coal demand grew at highest pace globally in 2022

The largest annual growth of any country will be seen in India's coal demand in 2022 through more coal-based energy generation to counter above-average summer heat and growth economic activity.

The second largest consumer of coal in the world increased its consumption by 14% year-on-year (Y-o-Y) to 1,033 million tons (MT) in 2021, according to the most recent data.

The analysis predicted that greater use of the energy sector would drive coal's largest growth demand this year, which would take place in India (7% or 70 tons), the European Union (6% or 29 tons), and China (0.4% or 18 tons).

The IEA study found that consumption in India has increased by a factor of two since 2007 average annual growth of six percent, and is expected to continue to drive growth going forward world demand for coal.

“In India, the government has long tried to ramp up production to reduce imports the first time coal production exceeded 800 tons was in 2021. We expect India to produce more than 1 billion tons by 2025," it continued.

“We expect a 7% increase in coal demand in 2022. The Indian economy is performing extremely well, with GDP growth expected this year at 7.3%, according to the IEA, despite the slowdown in global growth.

“Due to the strong economic growth, we expect an increase in electricity demand of 7%. Extreme heat wave that occurred from March to early May also helped boost demand. The daily power in April, the shortfall reached 15% in some states and was about 5% of total supply nationwide. We expect a 7% increase in coal consumption in the power sector in 2022 due to electricity scarcity markets, the report said.

Steel and cement, two sectors heavily dependent on coal, grew in 2022. Average cement per month production was up 11% year over year from January to September. Before it slows down in July as the onset of the monsoon season slowed construction, the rate of growth peaked in May. Pig iron and sponge iron production increased by an average of 6% and 1% per month, respectively.

Coal consumption growth is expected to fall significantly in 2022, by just 1.2%, but still breaking previous records, totaling 8,025 tons, slightly more than in 2013. (7,997 tons).

Finally, nuclear electricity production in 2022 was incredibly low, especially true in Europe France had to shut down a significant part of its nuclear capacity for maintenance.