China will become the world’s biggest carbon polluter this year, overtaking the United States, the International Energy Agency (IEA) said in a bleak forecast of soaring global demand for fossil fuels. The rapid growth of the Chinese and Indian economies will raise global energy demand by 50 per cent by 2030, the agency said in its annual World Energy Outlook. India and China alone will account for almost half of the increase.

The agency pointed a finger at soaring coal demand, which threatens to upset carbon reduction targets, as it painted an alarming picture of a future of energy insecurity, soaring oil prices and a massive increase in carbon emissions. The dash towards prosperity in Asia will be fuelled by hydrocarbons - and mainly by increased burning of coal – with an inexorable rise in carbon emissions, hastening climate change.

Accelerating demand for oil, which will reach 116 million barrels per day (bpd) by 2030, up 32 per cent, will require huge investments to keep pace, the IEA said, and the sums are increasing. Inflation has taken its toll, and the agency reckons that $5.4 trillion (£2.6 trillion) must be spent to raise capacity, up a quarter from the estimate last year. It gives warning that plans to raise output from new projects may not compensate for the decline in existing fields.

“A supply-side crunch in the period to 2014, involving an abrupt escalation in oil prices, cannot be ruled out,” the IEA said in its report.

Fatih Birol, the agency’s chief economist, said OECD countries needed to play a leadership role in reining in energy demand and urged immediate action to slow runaway growth in energy demand. “The more we sit back and watch the game, the less time we have to fix the problem,” Dr Birol said. “To believe China and India are to blame is wrong because these countries have the right to grow.”

Coal is in resurgence as higher oil and gas prices push developing countries, notably China and India, in search of cheaper alternatives. They account for 45 per cent of world coal consumption, and China’s drive to build power stations – the country needs to add 1,300 gigawatts to electricity generation capacity – will magnify its coal requirement.

China has huge coal resources, but peak early in the next decade but its demand for transport fuel will quadruple over the next two decades. The IEA calculates that sales of new vehicles in China will exceed those in the US by 2015, with 200 million vehicles on Chinese roads by 2030. demand for coal will increase faster became a net coal importer for the first time this year. As it surpasses the US in 2010 as the world’s biggest energy consumer, its appetite for imports will accelerate.

The IEA predicts that global demand for coal will increase faster than than demand for any other fuel, rising by 73 per cent by 2030. Although oil remains the biggest source of fuel, and consumption will rise by a third, its share of the global energy mix will shrink as the world moves towards coal, the cheaper burn.

The resurgence of King Coal will have consequences for the warming of the planet, the IEA said. “China is by far the biggest contributor to incremental emissions,” the agency said in its report. According to its reference scenario, carbon emissions will soar by 57 per cent between 2005 and 2030, with the US, China, Russia and India accounting for two thirds of the increase. China will overtake the US this year in carbon emission, and India will reach third place in 2015. Even so, China’s emissions per capita will be only 40 per cent of those of the US by 2030.

Increasing reliance on oil and gas imports will worsen energy security and heighten the risk of disruptions as the volume of seaborne trade in oil and gas products increases. Most of the extra oil and gas needed will come from the Middle East, where the risk of disruption is acute. In its reference scenario, the volume of global oil trade will expand from 41 million bpd in 2005 to 65 million bpd in 2030. The import requirement of China and India alone will rise from 5 million bpd in 2006 to 19 million bpd in 2030.

China's oil output is expected to peak early in the next decade, but its demand for transport fuel will quadruple over the next two decades. The IEA calculates that sales of new vehicles in China will exceed those in the US by 2015, with 200 million vehicles on Chinese roads by 2030.

Times Recommends

• Darling under pressure on record public debt
• Mortgage drought deepens on 32% lending fall
• Oil prices firm after 10% drop to below $130