Beijing’s five-year energy strategy pairs rapid renewable expansion with sustained coal use. The outcome could reshape global fuel markets and industrial supply chains.
China’s five-year plan for the energy sector confirms two simultaneously conflicting trends: the country will remain a global leader in both renewable energy and the coal sector. This combination is explained by the drive to enhance energy independence and secure stable supplies for domestic demand and industry.
As part of a broad expansion of renewable capacity, China plans to reduce dependence on imported fuels and strengthen domestic energy sources. At the same time, coal use will remain a key factor in energy and a feedstock for the chemical industry, sustaining the industrial pace even as the role of clean sources grows.
Key Goals: Renewable Energy as a Priority, but the Coal Base Remains
Under the plan, by 2030 China expects to obtain half of electricity from sources not tied to fossil fuels. This implies that more than half of the installed capacity will be provided by wind and solar energy, totaling over 2,700 GW, compared with 47% at the end of the previous year.
These forecasts may seem conservative, since the pace of capacity expansion in solar and wind energy in recent years has surpassed official targets.
At the same time, coal use will remain an important element: not only for electricity generation but also as a feedstock for chemical production and a fuel for the industrial sector. Coal continues to be a baseline energy source and has prospects for growth as a resource for chemical production.
Coal and Chemistry: Usage Trends
China is gradually reducing coal usage as a source for chemistry compared with 2005, but the volumes remain substantial – expected to be between 320 and 380 million tons this year. Most of this goes to methanol production, but ammonia, olefins, and other chemical compounds are also produced.
From an environmental standpoint, this means higher energy costs and corresponding carbon emissions in a sector that already accounts for a significant share of the country’s total emissions. In the coming years, China may increase coal usage as a feedstock for chemical production, especially if demand for oil declines due to active electrification of transport.
China’s oil imports reached a record level of 11.6 million barrels per day last year, but are expected to decline in 2026. In May, imports fell to an eight-year low, with an average of about 10.56 million barrels per day over the first five months, down 4.8% from the same period in 2025.
Following higher oil prices and world market fluctuations, China may reduce imports in 2026. If transport electrification accelerates, demand for oil could fall, which would spur the use of coal for producing chemical materials necessary for the industrial production base and consumer goods.
Summary
The new energy priorities illustrate China’s attempt to balance ambitions for clean energy with a strong coal base. This approach can strengthen energy independence, reduce dependence on imported energy sources, and at the same time support industrial development during the transition to cleaner energy.