China’s latest five-year energy strategy underscores a dual-track approach that positions the country to remain the global leader in both renewable energy expansion and coal consumption, reflecting Beijing’s continued focus on balancing decarbonisation with energy security.
The plan, unveiled last week, targets generating 50% of the nation’s electricity from non-fossil fuel sources by 2030, a significant increase from the 42.3% target set for 2025. To achieve this, China intends to expand installed wind and solar capacity to more than 2,700 gigawatts (GW), accounting for over half of the country’s total installed power generation capacity. The goal builds on rapid growth in renewable deployment, which has consistently outpaced official projections in recent years.
Despite the aggressive push toward clean energy, coal will remain a cornerstone of China’s energy mix. While coal production edged down 0.3% year-on-year to 1.98 billion metric tonnes during the first five months of 2026, the decline has largely been attributed to tighter safety inspections following a fatal mining accident in Shanxi province in May. Output is expected to recover in the second half of the year, potentially bringing annual production close to the record 4.823 billion tonnes achieved in 2025.
The new energy plan reaffirms China’s commitment to peak coal consumption by 2030 but stops short of outlining a specific target for reducing coal use. Instead, policymakers continue to view coal as a critical safeguard for energy security, ensuring reliable electricity supply alongside the rapid expansion of renewable generation.
Beyond electricity production, coal is expected to play an increasingly important role in China’s industrial sector through coal-to-chemicals and coal-to-liquid fuel projects. Coal consumption for chemical production has surged from approximately 20 million tonnes in 2005 to an estimated 320–380 million tonnes in 2026. Much of this is used to manufacture methanol, alongside ammonia, olefins and other industrial chemicals.
However, this shift raises environmental concerns, as producing chemicals from coal generates significantly higher carbon emissions than conventional oil-based processes. The coal chemicals industry is already estimated to account for between 5% and 7% of China’s total emissions.
Analysts suggest demand for coal-based chemical production could continue rising as China accelerates the electrification of passenger and commercial vehicles, reducing domestic demand for crude oil. China imported a record 11.6 million barrels of crude oil per day in 2025, but imports are expected to ease this year following a sharp decline in May amid disruptions linked to the Iran conflict.
The latest strategy highlights China’s complex energy transition, where record investments in renewable energy coexist with continued reliance on coal to support economic growth, industrial production and long-term energy resilience.
