US energy CO2 emissions seen easing in 2026 as coal use retreats

The forecast and the turn in coal

Energy Innovation, a nonprofit research group, sees a small step down in US carbon emissions from energy use in 2026. The team pegs the decline at around 70 million metric tons from 2025, or about 2%, which would land total emissions near 4,850 million metric tons.

That call blends federal energy figures available through July with near-term projections for the remaining months. It also marks a pivot from last year, when higher coal burn pushed emissions up after two straight years of declines, according to the US Energy Information Administration.

Fuel shifts behind the numbers

Coal is doing the heavy lifting on the downside. From January through July, federal data show US coal consumption ran 10% below the same stretch in 2025. Within industry, coke plants cut coal use by 4.8% and sectors like cement and chemicals trimmed by 4% over that period.

Natural gas demand is holding close to 2025 levels in power and industry, while Americans are using slightly less gasoline and diesel as oil market shocks have lifted the cost of driving. Robbie Orvis, who leads modeling and analysis at Energy Innovation, noted that an especially cold winter in 2025 pushed natural gas prices up and coal use higher for heating, while cheaper gas this year created an incentive to move away from coal.

Other researchers see the same arc. Glen Peters at Oslo's Center for International Climate Research, a leader of the Global Carbon Budget, said US coal use has fallen each year since 2014 except in 2021 and 2025. The Global Carbon Budget released Nov. 10 projected US coal use will be 6.7% below 2025.

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Policy pushes and the power mix

Even with federal moves intended to bolster coal, coal's footprint is shrinking. The Trump administration has issued emergency orders to keep some retiring coal plants running, loosened pollution controls, and steered hundreds of millions in federal funding toward modernizing existing coal stations and constructing new ones. Yet, as Orvis put it, "Coal remains uneconomic in spite of the different policies that have been put in place by this administration."

The emissions math in power underscores why coal's decline matters. Coal and natural gas each account for about 750 million metric tons of CO2 from the US power sector, even though coal produces roughly one third of the electricity that gas does.

Renewables keep climbing.

What it means for your portfolio

In plain English: a modest emissions dip in 2026 is being driven mainly by a retreat in coal use, flatlined gas demand, slightly lower gasoline and diesel consumption, and ongoing renewable buildouts. For investors, that mix ripples across coal exposure, gas-linked cash flows, and clean energy developers' pipelines. The bottom line is anchored by specific numbers - a 70 million metric ton decline, about 2%, to roughly 4,850 million metric tons - based on year to date data and short-run forecasts.

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