Coal use reaching peak plateau amid green goals

China's coal consumption is expected to enter a peak plateau transition during the 15th Five-Year Plan period (2026-30), following a steady deceleration in growth as the country's green energy transformation reshapes its economic fundamentals, said a think tank.

During the 14th Five-Year Plan period (2021-25), the country's coal usage was characterized by rising total volume but a markedly slowing growth rate, according to the Report on China Energy Development 2026, released by the China Electric Power Planning and Engineering Institute in Beijing.

In 2025, total coal consumption reached 4.76 billion metric tons, edging up a mere 0.1 percent year-on-year. Consequently, coal's share in China's primary energy consumption mix fell to 51.4 percent, a drop of 1.8 percentage points from the previous year.

During the 15th Five-Year Plan period, as China accelerates the construction of a new energy system, promotes the clean and efficient utilization of coal, upgrades traditional industries and replaces scattered coal — referring to coal of poor quality which is used throughout the civil sector for household cooking, heating and various commercial applications — national coal consumption will enter a peak plateau period, the report said.

The institute said power generation — which accounts for roughly 63 percent of the nation's coal usage — saw a 1.9 percent decline in coal-fired electricity generation in 2025, driving a 2 percent drop in thermal coal demand.

The steel and building materials sectors — which account for about 15 percent and 6 percent of coal consumption, respectively — also registered declines. Crude steel production fell 4.4 percent, while cement and flat glass output dropped by 6.9 percent and 3 percent, respectively, leading to markedly lower coal burning in heavy industries, it said.

In sharp contrast, the coal chemical sector remained robust. Driven by high operating loads at new coal chemical facilities and strong output of major chemical products, the sector's coal demand surged more than 10 percent, outpacing its 2024 growth rate.

The chemical sector currently represents about 9 percent of China's total coal consumption.

Coal-fired power in China is experiencing a major structural transition, shifting from a primary baseload energy source to a more flexible, supportive backup, said Liu Zhiqiang, deputy director of the China Electricity Council's planning and development department.

"Although coal plants are seeing fewer annual utilization hours to make way for renewable energy alternatives, their crucial role in maintaining grid stability — such as offering frequency support and rotational inertia — is increasingly vital," Liu said.

He cautioned that even though renewable capacity has reached historic highs, installed capacity does not necessarily equate to actual power output. As solar power fluctuates and operates for far fewer hours than fossil fuels due to its intermittent nature, Liu said coal will continue to serve as the critical "ballast stone" ensuring the reliable operation of the national grid for the near term.

The institute said the absolute volume of coal consumed still grew over the past five years, with total coal consumption up from 4.05 billion tons to 4.76 billion tons. This underscores coal's enduring yet transitional role in ensuring national energy security even as its share of the overall energy mix steadily declines.