Iran War: Is the World Really Moving Back to Coal?

Why It Matters

The outlook signals that energy markets remain resilient to geopolitical shocks without derailing climate‑friendly transition pathways, preserving momentum toward decarbonisation targets.

Key Takeaways

• Ember predicts at most a modest coal use increase in 2026
• Japan, Pakistan, Philippines consider coal to offset gas shortages
• Global coal demand remains flat despite geopolitical tensions
• No evidence of a broad 2026 coal resurgence

Pulse Analysis

The Ember think‑tank’s latest scenario analysis offers a sobering counterpoint to headlines suggesting a coal comeback amid the Iran‑Ukraine conflict. By modelling supply‑side constraints on natural gas, the study estimates only a marginal uptick in coal consumption for 2026, primarily driven by a handful of countries seeking short‑term energy security. This nuanced view underscores that while regional disruptions can prompt temporary policy shifts, they are unlikely to reverse the long‑term decline in coal demand observed over the past decade.

Japan, Pakistan and the Philippines have publicly signalled intentions to lean on coal as a stop‑gap while gas pipelines are rerouted or contracts renegotiated. Their plans, however, are limited in scale—often targeting specific power‑plant retrofits or peak‑load periods—meaning the aggregate effect on global coal markets remains minimal. Analysts note that these nations are also investing in renewable capacity and storage solutions, which will temper any sustained reliance on coal once gas supplies stabilise.

For investors and policymakers, Ember’s findings reinforce the importance of differentiating between headline‑grabbing geopolitical risks and the underlying structural trends shaping the energy transition. The modest projected coal rise does not threaten the trajectory toward net‑zero, but it does highlight the need for flexible, diversified energy portfolios that can absorb short‑term shocks without compromising climate commitments. Continued monitoring of gas market dynamics and regional policy responses will be essential to ensure that temporary coal use does not become entrenched.