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Global growth in coal demand will slow to just 0.5% per year over the next 20 yr, according to the latest BP Energy Outlook. This compares with growth of 3% per year over the past two decades. In contrast, global gas demand will grow by 1.8% per year over the outlook period, seeing the fuel overtake coal as the second-largest primary energy source by 2035.

“Coal suffers a sharp reversal in its fortunes,” the oil and gas giant said. “After gaining share since 2000, the gowth of coal is projected to slow sharply such that by 2035 the share of coal in primary energy is at an all-time low.”

Coal’s slowdown will come primarily on the back of significant slowing in coal demand from China as its economy rebalances away from energy-intensive heavy industries. According to BP, China’s demand for coal will grow by just 0.2% per year to 2035 – sharply down from the growth of over 8% experienced between 2000 and 2014.

By 2030, China’s coal demand falls into decline, although it remains the world’s largest coal market and is still responsible for over half of global coal supplies by 2035. Coal demand also falls significantly in both the US and OECD Europe on plentiful gas, cheaper renewable generation and strong environmental regulation with both regions seeing demand decline by more than 50%.

In contrast, India shows the largest growth in coal demand and overtakes the US to become the world’s second-largest consumer of coal.

Not all agree with BP’s outlook, however, with World Coal Association CEO, Benjamin Sporton, criticisng the oil and gas giant for failing to take into account International Energy Agency (IEA) forecasts that show key economies in southeast Asia turning increasingly to coal in coming years. As a result, the IEA sees coal’s share in power generation increasing from 32% to over 50%.

Edited by Jonathan Rowland.