Analsysts Michael Hsueh and Michael Lewis, who authored the report, said European coal usage would fall to 271Mt from last year’s 365 million tonnes.
The amount of coal-fired generation capacity will drop 15% to 162GW in the period as the European Union seeks to meet renewable energy targets, the analysts told Bloomberg.
“In Europe, emissions policies already in place will result in net closures of coal-fired generation over the next five years, while expanding renewable output will push coal utilization lower through 2020,” Hsueh and Lewis said.
“Three of the most important demand centers, China, Europe and the US, contain the seeds of a softening in demand growth, while US export capability may grow,” the analysts said.
According to the report, declining European consumption will outpace a 4.7% per annum cut in regional coal output.
Last month the International Energy Agency released a report showing that carbon emissions had remained stagnant during 2012, despite a growth in renewable energies.
According to the report, solar power capacity increased by 42% and wind power increased 19% during 2012.
Coal grew by 6% in double that time but because the total installed capacity of coal power was already substantially greater, the amount of coal capacity added was much larger than that of solar and wind power.
The IEA uses a complex calculation called the carbon intensity index to show how much carbon dioxide is emitted to provide a given unit of energy.
The index stood at 2.39 tonnes of CO2 per tonne of oil in 1990.
By 2010, it had shrunk only marginally to 2.37t.
The IEA stated that even the increase in natural gas consumption hadn’t decreased the use of coal worldwide as coal remained inexpensive, reliable and easy to incorporate into existing grids, with its major resurgence coming from developing economies.
The US data showed a turn towards natural gas while European coal use increased.
The report suggested that funding should be tripled to provide the kind of technology needed to replace fossil fuels while the actual spending on energy research and development, which is currently going down, should be increased.
It also called for a reduction in subsidies for fossil fuels which, at $523 billion, are six times higher than subsidies for renewable energy.
