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Informist, Thursday, Jun. 18, 2026

MUMBAI – Global coal consumption is likely to be at a record high in 2026 as well, S&P Global said in a release. Sharp movement in crude and LNG prices has created a ripple effect across fuels, and even without direct disruption, coal has been pushed into this broader price cycle, it said.

Coal is no longer simply another fuel in the mix as it serves as the market's balancing fuel during the period of disruption. When gas prices rise beyond switching parity, coal increasingly becomes the marginal fuel, in parts of Asia and Europe. Past gas price spikes have consistently driven stronger coal burn and firmer prices, according to the release.

With gas markets still volatile and structural demand anchored in China and India, coal demand is proving more resilient than many expected, said Pritish Raj, senior manager, APAC & EMEA Thermal coal.

In India, thermal coal imports are likely to hold in the range of 175–190 million tonnes by 2030, supported by roughly 50 million tonnes of demand from import-dependent coal-based power plants, it said. These facilities are engineered to run on high-calorific, low-ash imported coal, and face significant technical challenges in switching to domestic supply, which has much higher ash content and different combustion properties, according to the release.

While policymakers are targeting a reduction in imports, particularly with plans to substitute up to 20% through domestic coal blending in import-based capacity, this transition will be gradual and extend toward the end of the decade, with import reliance structurally intact at least till 2030.

Higher blending ratios introduce efficiency losses, increased maintenance, and require meaningful capital investment. As a result, coal continues to serve as a reliable and cost-effective cornerstone of India's energy system, particularly in an increasingly uncertain global environment.

Even in the non-power segment, imported coal demand is likely to see only gradual and limited displacement. Some flexibility exists, particularly among industrial users such as cement and sponge iron producers, who may adjust fuel specifications and optimize blends. "While these consumers may incrementally increase the use of domestic coal, their ability to fully substitute imported material remains constrained by efficiency considerations and process requirements," according to the release.  End

Reported by Taniva Singha Roy

Edited by Akul Nishant Akhoury

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