Image caption Ratcliffe-on-Soar coal fired power station near Nottingham

The International Energy Agency (IEA) says that coal will catch up with oil as the world's leading energy source by 2022.

In a report, the Agency says that increased demand from India and China are fuelling the push.

Natural gas offers the best hope of reducing carbon emissions in the short term the report concludes.

It comes as the European Union acknowledged that it has been unable to fund a single project to capture and store CO2.

Economic and population growth in developing countries are spurring the drive for coal says the IEA,

If no changes are made to current policies, coal will catch oil within a decade Maria Van der Hoeven, IEA

China on top

By 2017 the agency says global coal consumption will stand at 4.32 billion tonnes of oil equivalent, versus 4.4 billion tonnes for oil itself.

"Coal's share of the global energy mix continues to grow each year," says IEA executive director Maria Van der Hoeven. "If no changes are made to current policies, coal will catch oil within a decade."

The report forecasts that by 2014 China will account for more than half the world's coal consumption, while India will overtake the US in second place.

In fact the US is the only region of the world forecast to reduce demand for coal says the report, highlighting the role being played by shale gas in the energy mix.

"The US experience suggests that a more efficient gas market, marked by flexible pricing and fuelled by indigenous unconventional resources that are produced sustainably can reduce coal use, CO2 emissions and consumers' electricity bills without harming energy security" says Ms. Van der Hoeven.

Earlier this year the IEA reported that without a major move away from coal as an energy source, average global temperatures could rise by 6C above pre-industrial levels by 2100, leading to highly damaging climate change.

Image caption How a carbon capture and storage facility might look at a coal fired power plant

To avoid that, governments are hoping that technologies like carbon capture and storage (CCS) can be utilised to curb the growth in emissions.

But in today's study, the IEA says that CCS is unlikely to make any impact in the next five years.

This pessimistic view was echoed in Brussels as the EU was unable to find a suitable carbon capture and storage project to fund, despite having set aside 275m euros (£224m) to kick start the technology.

A number of projects from different European countries including the UK had been in the running for a share of the money but all were forced to withdraw after they failed to secure necessary financial support from their home governments. This is despite the UK outlining a new effort to develop CCS earlier this year.

Capturing the cash

The EU says that the money will remain available to fund CCS projects in a second call for proposals that the Commission says it will proceed with "swiftly."

Liberal Democrat member of the European Parliament Chris Davies blamed European governments for failing to come up with the cash, particularly when the IEA were reporting the unabated rise of coal.

"We may have fallen at the first hurdle but we mustn't give up," he told the BBC.

"CCS becomes even more important globally with coal set to overtake oil as the primary source of energy."

While the EU was unable to announce any progress on CCS, they were able to award 1.2bn euros (£975m) to 23 innovative renewable energy demonstrations projects across the member states.

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