Why betting on rising demand for met coal in Asia is a losing strategy

The report asserts that metallurgical coal demand is plateauing as the steel industry shifts toward low-carbon technologies like electric arc furnaces (EAFs) and green hydrogen-based direct reduced iron (DRI). While some governments and financial institutions remain bullish on long-term growth, particularly in Asia, the document predicts a 4.8% drop in met coal consumption between 2025 and 2030. It highlights the risk of stranded assets, noting that 145 companies are planning expansions that could increase global capacity by 580 million tonnes per year. The report recommends scrapping subsidies for traditional steel, lowering industrial electricity prices, and using public procurement to prioritise green steel to accelerate the transition.

• Global demand for metallurgical coal has plateaued and is projected to decline more rapidly than thermal coal or lignite. Between 2025 and 2030, met coal consumption is expected to drop by 4.8%, compared to a 2.8% decline for coal used in power generation.
• Regional demand shifts are driven by China's transition to a services-led economy and the adoption of low-carbon steel. Between 2025 and 2030, met coal demand in China could fall by 77 million tonnes (Mt), and the European Union, Japan, and Korea are expected to see a combined decrease of 21 Mt, offsetting growth in India (26 Mt) and Indonesia (12 Mt).
• The steel sector is transitioning toward low-carbon methods, specifically electric arc furnaces (EAFs) using scrap steel and green hydrogen-based direct reduced iron (DRI). While current operational capacity is low—270,000 tonnes per year for green iron and 60,000 tonnes per year for green steel—planned capacity by 2050 includes an additional 28 million tonnes of green steel and 18 million tonnes of green iron.
• There is a significant risk of stranded assets due to continued investment in met coal. Between 2022 and 2024, banks provided nearly USD 22 billion in financing for met coal mine developers, and institutional investors held USD 30 billion in securities. Furthermore, 145 companies are planning expansions across more than 250 projects that could increase global annual capacity by 580 million tonnes and raise production by 52%.
• Australia is the world's leading supplier of metallurgical coal, accounting for 42% of global exports in 2024. The country continues to develop new mines in Queensland, including the Moranbah South, Winchester South, and Isaac River projects.
• China is implementing strategies to lower the cost of green hydrogen, aiming for a price below 25 yuan (USD 3.6) per kilogram by 2030. Additionally, the Chinese government set a target to increase the share of EAF steel to 15% of total production by 2025, though it remained at approximately 10% as of mid-2025.

APA

Hedley, N. (2026). Why betting on rising demand for met coal in Asia is a losing strategy. Zero Carbon Analytics. https://zerocarbon-analytics.org/energy/why-betting-on-rising-demand-for-met-coal-in-asia-is-a-losing-strategy/

Chicago

Hedley, Nick. Why betting on rising demand for met coal in Asia is a losing strategy. Zero Carbon Analytics, 2026. https://zerocarbon-analytics.org/energy/why-betting-on-rising-demand-for-met-coal-in-asia-is-a-losing-strategy/.

Wikipedia

{{cite report |last1=Hedley |first1=Nick |title=Why betting on rising demand for met coal in Asia is a losing strategy |publisher=Zero Carbon Analytics |date=23 April 2026 |url=https://zerocarbon-analytics.org/energy/why-betting-on-rising-demand-for-met-coal-in-asia-is-a-losing-strategy/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hedley2026why, author = {Hedley, Nick}, title = {{Why betting on rising demand for met coal in Asia is a losing strategy}}, institution = {Zero Carbon Analytics}, year = {2026}, month = apr, url = {https://zerocarbon-analytics.org/energy/why-betting-on-rising-demand-for-met-coal-in-asia-is-a-losing-strategy/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }