October 16, 2026 - Global coal demand is gaining momentum as disruptions to oil and natural gas supplies reinforce the fuel’s role in maintaining reliable electricity generation.

The International Energy Agency, which previously anticipated that coal consumption would level off before gradually declining, now projects demand will reach a record 8.94 billion metric tons in 2026.

The shift reflects the effects of the war in Iran, which disrupted energy shipments through the Strait of Hormuz and tightened global oil and gas supplies. Countries seeking alternatives have increased their reliance on coal.

Daan Walter, who leads energy strategy research at the think tank Ember, said reduced natural gas availability is a major factor behind the increase in coal consumption.

The situation has renewed attention to coal’s contribution to energy security, particularly in countries facing rising electricity demand, expensive fuel imports and limited alternatives that can be deployed quickly.

Investment is also increasing. In June, the IEA reported that coal investment had reached its highest level in 14 years.

In Queensland, Australia, Premier David Crisafulli said he would welcome proposals for new coal-fired power stations to supply electricity for Anthropic’s planned artificial intelligence data centers.

In Alberta, Canada, Northback is pursuing the reopening of a mine that closed nearly 60 years ago. The company’s plans reflect expectations of continued coal demand over the coming decade.

However, analysts differ on how long the current growth will last. Christine Shearer, a coal analyst at Global Energy Monitor, cautioned that a near-term increase in consumption does not necessarily indicate a sustained expansion across the industry. Walter also questioned whether projects developed in response to today’s market conditions will encounter the same demand when they begin operating.

Those concerns highlight the importance of distinguishing immediate fuel requirements from longer-term investment decisions.

The energy crisis is encouraging countries to diversify their electricity supplies. Alongside increased coal use, governments are expanding renewable energy and other technologies to reduce exposure to volatile international fuel markets.

Following energy disruptions associated with Russia’s invasion of Ukraine in 2022 and the current Middle East conflict, many countries are placing greater emphasis on domestic power generation.

At the same time, electricity demand continues to grow, supported by artificial intelligence data centers, increased air-conditioning use and broader economic activity. Wind and solar are supplying much of that additional demand, while coal remains an important source of generation in major markets.

The International Monetary Fund said expanding clean electricity has helped cushion the economic effects of the latest oil shock, although it warned that the global economy’s ability to absorb further disruptions is becoming more limited.

India illustrates how coal expansion and renewable development can proceed together.

This week, the head of India’s power-sector planning agency said the country may need substantially more coal-fired capacity than previously anticipated. Strong electricity demand and reduced hydropower output following weaker monsoon rains have increased the need for dependable generation.

Meanwhile, India has expanded its renewable capacity roughly fourfold over the past decade to about 300 gigawatts, putting it ahead of schedule on its Paris Agreement climate commitments.

The country’s approach reflects the challenge facing many electricity systems: adding new energy resources while ensuring enough reliable capacity remains available to meet demand.

Coal continues to face environmental pressures because its combustion produces more carbon dioxide per unit of electricity than natural gas, along with other air pollutants. Countries agreed to pursue a phasedown of unabated coal power at the Glasgow climate conference five years ago.

Nevertheless, current market conditions demonstrate that coal remains a significant part of the global energy mix. Its longer-term outlook will depend on electricity demand, competing fuel prices, government policies and the pace at which alternative generation and supporting infrastructure become available.