Coal demand to boost CO2 emissions in 2021, says IEA

Tuesday, 20 April 2021
Global energy-related carbon dioxide emissions are on course to increase by 1.5 billion tonnes in 2021 - the biggest annual rise in emissions since 2010, according to the International Energy Agency. This increase, reversing most of last year's decline caused by the COVID-19 pandemic, is being driven by a strong rebound in demand for coal in electricity generation.
Coal demand to boost CO2 emissions in 2021, says IEA
(Image: IEA)

The IEA's Global Energy Review 2021 estimates global economic output will rebound by 6% in 2021, pushing global GDP more than 2% higher than 2019 levels. Energy demand worldwide is set to increase by 4.6% in the year, more than offsetting the 4% contraction in 2020 and pushing demand 0.5% above 2019 levels. Almost 70% of the projected increase in global energy demand is in emerging markets and developing economies, where demand is set to rise to 3.4% above 2019 levels. Energy use in advanced economies is on course to be 3% below pre-COVID levels.

The report estimates that CO2 emissions will increase by almost 5% this year to 33 billion tonnes, based on the latest national data from around the world as well as real-time analysis of economic growth trends and new energy projects that are set to come online. The key driver is coal demand, which is set to grow by 4.5%, surpassing its 2019 level and approaching its all-time peak from 2014, with the electricity sector accounting for three-quarters of this increase.

Electricity demand is forecast to increase by 4.5% in 2021, or over 1000 terawatt-hours. This is almost five times greater than the decline in 2020, the IEA says, "cementing electricity's share in final energy demand above 20%". Almost 80% of the projected increase in demand in 2021 is in emerging market and developing economies, with China alone accounting for half of global growth. Demand in advanced economies remains below 2019 levels.

Demand for all fossil fuels is on course to grow significantly in 2021, with both coal and gas set to rise above their 2019 levels. More than 80% of the projected growth in coal demand in 2021 is set to come from Asia, led by China. Coal use in the USA and the European Union is also on course to increase but will remain well below pre-crisis levels. Oil is also rebounding strongly but is expected to stay below its 2019 peak, as the aviation sector remains under pressure.

Electricity generation from renewables is set to increase by over 8% in 2021, accounting for more than half of the increase in overall electricity supply worldwide. The biggest contribution to that growth comes from solar and wind, which are on track for their largest annual rise in history. Electricity generation from wind is projected to grow by 275 TWh, or around 17%, from last year. Electricity generation from solar PV is expected to increase by 145 TWh, up almost 18% from last year. Their combined output is on track to reach more than 2800 TWh in 2021.

Impact on nuclear output


Nuclear power generation decreased by around 4% in 2020 - the largest decline since the Fukushima accident in 2011. Major reductions took place in the EU (-11%), Japan (-33%) and the USA (-2%). Nuclear power increased in China (5%) and Russia (3%), with new units being commissioned during 2019 and 2020. In Belarus and the UAE, the first nuclear units entered commercial operation, with more units currently under construction.

The IEA expects nuclear power to increase 2% in 2021, reversing only half of the decline in output that took place last year. Seven new reactors came online in the second half of 2020 and the first quarter of 2021, more than offsetting the three reactors retired over the same period. Up to ten more new reactors could be connected to the grid worldwide by the end of 2021, including four in China. Despite the increase in operational capacity over the course of the year, global nuclear power in 2021 remains slightly below the 2019 level, the report notes.

Time to act


"Global carbon emissions are set to jump by 1.5 billion tonnes this year - driven by in the resurgence of coal use in the power sector. This is a dire warning that the economic recovery from the COVID crisis is currently anything but sustainable for our climate," said IEA Executive Director Fatih Birol. "Unless governments around the world move rapidly to start cutting emissions, we are likely to face an even worse situation in 2022. The Leaders Summit on Climate hosted by US President Joe Biden this week is a critical moment to commit to clear and immediate action ahead of COP26 in Glasgow."

"The accelerating rollouts of COVID-19 vaccinations in many major economies and widespread fiscal responses to the economic crisis are boosting the outlook for economic growth and leading to a rebound in energy demand in 2021," the IEA said. However, it added: "The pace of global vaccine rollouts, the possible emergence of new variants of the COVID-19 virus, and the size and effectiveness of economic stimulus measures all represent major uncertainties for the outlook."

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