While many countries worldwide are moving away from a dependence on coal, the U.S. still relies heavily on the dirtiest fossil fuel for its power. The U.S. has experienced an accelerated green transition since the introduction of the Biden administration’s Inflation Reduction Act (IRA) in 2022, which has spurred a massive increase in the country’s renewable energy capacity and attracted billions in private funding.
However, this shift has not stopped the U.S. reliance on coal, as the third-largest consumer of coal in the world after China and India. The U.S. continues to be the fourth-largest producer of coal, after China, India and Indonesia, and it has more coal reserves than any other country. The U.S. had 206 active coal plants remaining in 2023. Around a quarter of domestic coal generation is expected to be retired by 2040 but the pace of planned retirements slowed last year as energy demand increased.
Coal production in the U.S. has fallen in recent years, as oil and gas production increased, and the country expanded its renewable energy capacity. According to the U.S. Energy Information Administration (EIA), U.S. coal production decreased 2.7 percent year over year from 2022 to 2023, to 577.9 million short tons (MMst). Meanwhile, U.S. coal consumption fell by 17.4 percent in this period, from 515.5 MMst to 425.9 MMst, and the electric power sector contributed 387.2 MMst (90.9 percent) of total U.S. coal consumption in 2023.
The EIA forecast that coal’s share of U.S. electricity generation would fall to a record low of 16.1 percent in 2024, as several coal mines were retired and alternative energy capacity increased. Non-coal power generation was expected to be sourced from natural gas, 41.6 percent; nuclear, 19 percent; and renewable energy sources, 22.8 percent. The EIA expected coal production in 2024 to total 499 MMst, marking a decrease of 14.2 percent from 2023, and fall by a further 5 percent in 2025, to 474 MMst. It forecast that the electricity power sector would consume 384 MMst in 2024, around 1 percent less than in 2023, and an additional 2 percent less in 2025.
However, as coal production begins to decrease faster than consumption, it will likely lead to a reliance on existing inventories, until the alternative energy capacity increases. Coal inventories stood at 120 MMst by the end of July last year and are expected to fall to around 84 MMst by the end of 2025.
In terms of exports, the EIA expected coal exports to total 103 MMst in 2024, marking a 3 percent increase on 2023. This figure is expected to climb by an additional 0.8 percent in 2025, to 103.8 MMst. The EIA stated, “Although coal exports in our forecast remain ro