The Coal Comeback That Isn't: Why This Crisis Is Different

I have spent the past eight weeks waiting for the other shoe to drop.

When the Iran crisis erupted and Brent crude spiked toward the levels we are seeing today — $109.47 per barrel as of this writing, up more than five percent in recent trading — every instinct told me to brace for the familiar pattern. Energy shock leads to panic. Panic leads to coal plants firing back up. A decade of climate progress gets sacrificed on the altar of energy security.

It hasn't happened. And understanding why matters more than any single policy announcement this year.

The data emerging from multiple tracking organisations tells a story that would have been unthinkable during previous energy crises. According to analysis published this week by Carbon Brief, the world will not see a significant return to coal in 2026 despite the ongoing Middle East disruption. Some countries have made noise about extending coal plant lifetimes or delaying closures, but the aggregate numbers show something remarkable: the structural decline continues.

This is not because policymakers have suddenly developed spines of steel. It is because the economics have fundamentally shifted.

When I covered the 2022 energy crisis from Brussels, the calculus was brutal. Natural gas prices in Europe hit levels that made even the dirtiest coal plants look economically rational. Governments scrambled. Germany reactivated mothballed lignite capacity. The Netherlands lifted its cap on coal-fired generation. We told ourselves it was temporary, that the climate targets would survive, but privately many of us wondered if we were watching the beginning of the end for European climate leadership.

This time, the equation has changed. Renewable capacity additions over the past three years have created genuine alternatives that simply did not exist at scale before. Solar and wind installations across Europe now provide baseload alternatives that coal cannot match on price, even with natural gas elevated. The Henry Hub benchmark sits at $2.65 — relatively stable despite the chaos — partly because global LNG markets have diversified sufficiently to absorb regional shocks.

More importantly, the policy architecture has matured.

Executive Vice-President Teresa Ribera's press conference yesterday in Brussels unveiled the Middle East crisis Temporary State aid Framework, a mechanism designed to provide targeted support to energy-intensive industries without reopening the door to fossil fuel subsidies. The framing was deliberate: this is not 2022. The EU has learned from its previous scramble and built guardrails that did not exist during the last crisis.

"We are managing the biggest disruption to energy markets in two decades," Ribera acknowledged. The subtext was clear: we are managing it differently.

The framework allows member states to provide liquidity support and limited direct grants to industries facing acute energy cost pressures, but it explicitly excludes support for new fossil fuel capacity. Companies can receive aid to cover elevated electricity bills; they cannot receive aid to fire up coal plants. The distinction sounds technical, but it represents a fundamental choice that European policymakers failed to make consistently three years ago.