Asian coal's first joint retreat in 52 years leaves global emissions at a record high
China and India cut coal power simultaneously for the first time in 52 years, yet global CO2 hit a record, challenging ICE EUA Dec-rolling assumptions.
ICE EUA Dec-rolling was trading at €81.38/tCO2 on Friday (2026-08-07) against data that splits the clean energy transition story in an uncomfortable way. Global clean energy trade reached $479bn in 2025, coal-fired power generation fell in both China and India simultaneously for the first time in half a century, and global carbon dioxide emissions still hit a record.3,1
The Asian coal retreat does not move ICE EUA Dec-rolling in the short run. European carbon pricing turns on coal-to-gas switching in continental generation, and with ICE Endex TTF front-month at €55.74/MWh on Friday (2026-08-07), gas retains a generation cost advantage over coal at current carbon prices. The structural Asian shift feeds through to European markets only indirectly and over a longer horizon.3
The structural shift itself is substantial. Carbon Brief's analysis published in May (2026-05-19) found that Chinese coal generation fell 1.6% year-on-year in 2025, equivalent to about 90TWh, while Indian coal generation dropped 3.0%, or about 46TWh. Both declines came despite rising electricity demand in each country. The power sectors of China and India drove 93% of the rise in global CO2 emissions between 2015 and 2024, according to the same analysis, so the 2025 reversal breaks a decade-long pattern.1
China's 5% electricity demand growth in 2025 was covered entirely by non-fossil sources. Solar and wind added 450TWh in the first 11 months, nuclear contributed another 35TWh, and Beijing likely added more than 300GW of solar and 100GW of wind across the year — record additions for any country. The pace of non-fossil buildout determines whether the coal decline holds or reverses under continued demand growth.1
India's position is less settled. The country's CO2 emissions rose from 3.26 billion metric tons in 2024 to 3.28 billion metric tons in 2025, an increase of about 21 million metric tons, substantially below the roughly 3.5% annual average of the past decade. Newcastle coal physical stood at $116.35/t on Friday (2026-08-07), and the thermal coal market's bullish case had rested partly on Indian demand growth — a thesis the 2025 data directly challenges.7,1
Global emissions increased by only about 4 million metric tons in 2025, essentially flat by the standards of a system this large, but flat at a record. China alone emitted 12.5 billion metric tons of CO2-equivalent, equal to 30.5% of the global total, while non-OECD countries as a whole accounted for 70.5% of global emissions. North America absorbed much of the remaining growth: U.S. coal-fired generation jumped roughly 91TWh, or about 13%, even as total electricity generation rose only about 133TWh.7,6
Capital flows point in a different direction over a longer horizon. Clean energy spending now runs at nearly double oil and gas investment, with projections putting total energy investment at roughly $1.6trn, or $2trn when end-use electrification is included. Grid investment is set to attract around $550bn, up almost 20% year-on-year, with battery storage surpassing $100bn. Asia-Pacific led the electrification shift in 2025, with electricity demand up 3% and low-carbon sources meeting all demand growth. Solar is projected to become the world's largest electricity source by 2032, with battery storage capacity reaching 3.8TW by 2035.3,45,2
For ICE EUA Dec-rolling traders, the near-term test is whether European switching margins tighten as ICE Endex TTF front-month moves. The Asian structural story is consequential over years, not quarters. The more pressing catalyst into the coming quarters is whether China's coal decline — achieved in 2025 against 5% electricity demand growth — persists into 2026, or whether grid-connection delays on Beijing's record 300GW-plus solar additions push residual coal burn back up and reinstate the emissions trajectory that dominated 2015 to 2024.1,3