Coal, a fuel long considered to be in decline amid the global push for cleaner energy, is experiencing an unexpected resurgence across multiple regions. Governments are revisiting their coal strategies in response to energy security pressures, surging electricity demand, and growing concerns over affordability. The coal industry revival gained notable momentum when US President Donald Trump announced that his administration would spend nearly $700 million to finance domestic coal plants and ramp up exports.
To support the move, President Trump invoked the Defense Production Act, a legal mechanism that allows the US president to expand production in industries deemed critical to national security. The announcement coincided with the effective blockade of the Strait of Hormuz since early March and rising energy prices in the US linked to the ongoing conflict with Iran.
Of the total $700 million committed, $500 million has been earmarked to establish a new export centre in California and to preserve 14 existing coal plants operating across Kentucky, North Carolina, Indiana, Tennessee, Arkansas, Arizona, Oklahoma, North Dakota, Wisconsin, and West Virginia. The remaining $200 million will fund the construction of new coal plants in Alaska and West Virginia the first such new facilities to be built in the US since 2013. Earlier this year, the US had also directed existing coal plants to continue operating beyond their originally planned retirement dates, a significant development for the North American energy sector.
Similar policy shifts are also unfolding in Europe. Italy has announced it will delay the permanent closure of its coal-fired power plants until 2038, pushing the original deadline back by 13 years. In Germany, Chancellor Friedrich Merz has indicated the country may also need to delay planned shutdowns. “We may even have to keep existing coal-fired power stations connected to the grid for longer, should the energy crisis continue, and a shortage actually arise,” Merz stated.
While the ongoing Middle East conflict has accelerated coal’s redeployment in the energy mix, its broader resurgence can also be traced back to the COVID-19 pandemic and the intensification of the Russia-Ukraine conflict in 2022. Both events exposed significant supply chain vulnerabilities across Europe and the wider world, prompting governments to reassess their long-term energy strategies. Data from the International Energy Agency (IEA) confirms that global coal consumption has only grown since 2020, reversing a previous decline.
No assessment of global coal consumption is complete without examining the roles of China and India. According to the IEA’s Global Energy Review 2024, China’s coal demand rose by 1.2%, setting a new record. The country now consumes approximately 40% more coal than the rest of the world combined, largely for electricity generation, with Chinese power plants accounting for more than one-third of global coal use.
India, the world’s second-largest coal consumer, recorded an all-time high growth in coal demand of 5.5% in 2024. Coal power generation in India grew by 5% the same year, directly in line with rising electricity demand.
Southeast Asia emerged as the world’s third-largest coal-consuming region in 2023. In 2024, coal consumption in the region increased by over 8%, driven primarily by Indonesia, Vietnam, and the Philippines. Indonesia’s growth was largely linked to coal’s expanding role in the metallurgical industry, while coal power generation served as the primary driver in Vietnam and the Philippines.
A critical, and perhaps surprising, factor in the coal industry revival is the accelerating global demand for electricity, with artificial intelligence and data centres playing a central role. Research from Lawrence Berkeley National Laboratory projects that by 2028, more than half of all electricity consumed by data centres will be dedicated to AI workloads.
The IEA reports that data centre electricity use reached 415 terawatt-hours (TWh) in 2024, representing nearly 1.5% of total global power consumption. This figure reflects a sustained growth trend, with data centre electricity usage expanding at a rate of 12% per year over the past five years a trajectory that continues to place upward pressure on overall energy demand worldwide and, by extension, on coal consumption as a reliable baseload power source.