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China is the world's largest energy consumer and India ranks third globally. Both countries are the biggest consumers of coal as they strive to boost economic growth, according to CNBC.

According to predictions by the International Energy Agency, China's share of global electricity consumption will increase to about 30% by 2025, compared to 25% in 2015. Currently, coal-fired power accounts for 60% of the country's electricity structure.

India's rapidly growing economy also means the country's energy needs include oil and natural gas, said Rob Thummel, managing director of energy investment management firm Tortoise Capital. Of course it will be huge.

“If India and China maintain decent economic growth over the next decade, we won't see coal demand disappear anytime soon,” Ian Roper, commodity strategist at Astris Advisory Japan KK, told CNBC. Global".

In a recent report the IEA said that global coal use in 2023 reached a record high, exceeding 8.5 billion tons for the first time due to strong demand in emerging and developing countries, especially especially India and China.

Coal consumption in India and Southeast Asia is expected to “increase significantly,” the IEA said.

India's coal output rose to 893 million tons in the fiscal year ending March 2023, up nearly 15% from a year earlier. China's raw coal output from January to November 2023 increased by 2.9% over the same period in 2022.

In contrast, the United States, the world's second-largest coal consumer, has seen its use of the fuel decline. According to the Institute for Energy Economics and Financial Analysis, the amount of coal the country consumes each day recorded a 62% decrease from 2.8 million to 1.1 million tons per day.

Failure to cut emissions?

Globally, carbon emissions from fossil fuels reached record levels last year. According to the latest estimates of the Global Carbon Budget, India's emissions are predicted to increase by 8.2% by 2023, while China's are expected to increase by 4%.

“Of these, China and India are the focus, because these two countries currently use significantly more coal. And so their carbon emissions are increasing, not decreasing,” Thummel said.

However, the two countries have been setting aggressive renewable energy targets.

India has set an ambitious target of meeting 50% of its electricity needs from renewables by 2030 and the South Asian country has made some progress in its efforts, with renewables accounting for 22% of the country's electricity output.

That means 75% of India's energy is generated from coal-burning plants. According to a study by Citibank, inventories at power plants in India in 2023 increased by 6% compared to the previous year. The country also plans to add 80 gigawatts of coal-fired power capacity in the next eight years.

Similarly, coal power accounts for 61% of China's electricity generation, although the country is recognized as a leader in the wave of renewable energy capacity expansion.

It added new projects to the grid at nearly the same rate as the rest of the world combined in 2022 and has ambitions to become carbon neutral by 2060.

But the unreliability of renewable energy means coal remains an important backup option for the two countries.

“China suffered from power shortages a few years ago, hydropower has been very weak in the last few years, so they had to go back to using coal,” Roper pointed out.

Last year, China suffered from a drought that lasted several months, causing hydropower output in the southern provinces to decrease. To meet enough electricity, the country had to switch to using coal.

In India, last October, coal's share of electricity production increased to 80% compared to 73% in the same period last year, as lower than normal rainfall limited hydropower production. Coal output that month increased more than 18% over the same period last year.

This means the two countries will continue to rely on coal as their main source of electricity generation for many years to come.

“Coal consumption by India and China will also grow net for at least the next decade,” Roper said.

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