The End of Coal: Will G-7 Countries’ Commitment Lead the Way?

The G-7 countries have made a commitment to phasing out coal for electricity generation by 2035 in order to reduce their reliance on the dirtiest fossil fuel. However, the future of fossil fuels, particularly coal, may be decided in other regions of the world. While the G-7 countries have set targets to reduce coal use, global demand for coal has continued to rise.

Recent headlines have highlighted shareholders of a major raw materials company, Glencore, who opposed a spin-off of the company’s profitable coal business. At the same time, the G-7 countries made a joint declaration to phase out coal for electricity generation by 2035, with some exceptions for capturing and storing emissions. This decision reflects a broader trend towards reducing coal use in industrialized countries, although challenges remain, especially in regions with high coal dependency like China.

Despite the commitments of the G-7 countries, global coal consumption has not significantly decreased, with demand reaching record levels in recent years. Countries like China, India, and Indonesia continue to build new coal-fired power plants, contributing to ongoing coal consumption worldwide. The expansion of artificial intelligence and data centers is also expected to increase electricity demand, potentially leading to continued reliance on coal in some regions.

The International Energy Agency (IEA) forecasts that global coal demand may peak in the coming years due to increasing awareness of the environmental impacts of coal use and transitions towards cleaner energy sources. However, uncertainties remain about the future role of coal in the energy transition as decisions made by countries like China and developments in new technologies and industries will play a crucial role in determining its future as an energy source.