China to cap coal demand growth under 15th Five-Year Plan

By Dominikus

China is expected to cap coal demand growth during its 15th Five-Year Plan period, with consumption entering a plateau phase as the country balances energy security with its low-carbon transition, an industry expert said.

Coal consumption is projected to stabilize within a range of 4.9 billion to 5.1 billion tonnes during the period, marking a shift from previous rapid growth to what officials describe as a “peak plateau” stage, according to Wu Lixin, chief expert at the China Coal Industry Planning and Design Institute.

The shift follows a period of expansion in output, with China’s coal production reaching about 4.85 billion tonnes in 2025.

Despite the stabilization in demand, coal is expected to remain a key component of China’s energy system, serving as a base-load and security source while supporting the integration of renewable energy.

The composition of coal demand is also changing. Power generation continues to account for nearly 60% of total consumption, while demand from the chemicals sector is expected to increase. In contrast, coal use in traditional industries such as steel and building materials is projected to decline.

On the supply side, China has expanded domestic production capacity, with major coal-producing regions including Shanxi, Shaanxi, Inner Mongolia and Xinjiang contributing about 3.9 billion tonnes in 2024, or more than 80% of national output.

Read also: China coal imports fall as domestic supply rises, market enters ‘loose balance’ phase

Industry consolidation is also progressing. By 2025, around 15 coal companies each producing more than 50 million tonnes annually accounted for about 56% of total production, reflecting increased concentration in the sector.

China’s coal imports, which totaled about 540 million tonnes in 2024, accounted for close to 10% of total supply, with Indonesia, Australia, Russia and Mongolia as the main suppliers.

Under the new policy framework, imports are expected to play a supplementary role as domestic supply expands and demand growth slows.

 “Coal demand is entering a peak platform period, with significant uncertainty influenced by geopolitical risks, extreme weather and energy transition policies,” Wu said.

The shift toward slower demand growth is expected to affect global trade flows, with increased competition among exporters, particularly in lower-calorific coal segments.

China’s coal sector is expected to focus on supply security, efficiency and integration with renewable energy systems during the plan period, while maintaining coal’s role in the energy mix.

Editing by Alexander Ginting