Investment in coal is likely to jump 10% this year, as a growing number of countries race to secure alternative sources of fuel to improve energy security, which has been eroded by the Ukraine war.
The IEA said in a report on Wednesday that Russia's invasion of Ukraine has upended the fuel investment landscape.
The global energy markets were already getting squeezed by the strong recovery in economic activity. Russia's position as a major energy supplier and oil prices are up 40% so far this year as a result of the war in Ukraine.
The amount of money invested in the coal supply chain was up 10% from 2002 according to the IEA.
China and India are the world's top consumers of coal. According to the IEA, India wants to increase domestic coal production to deal with power shortages.
Coal is seeing a resurgence not just in China and India, but also in Europe, which gets 40% of its natural gas from Russia and which may now need to find alternative sources of fuel.
Coal-generated power may be able to help them weather an energy crisis this winter. It's at odds with their commitment to cut back on the use of coal, and most European countries' plans to phase out coal-fired plants by 2030.
Europe isn't investing more money in coal because it's shifting to it temporarily. Europe imports most of their coal from Russia, the US and Australia. Russian coal will be banned by the EU. The shift is expected to benefit South Africa, according to a report. The price of coal in Europe has gone up by about 150% this year.
Despite the shift back to coal in some countries, global investment in clean energy is finally ramping up. The agency said that clean energy investment is expected to more than double in the next five years.