China’s New Coal Language Leaves More Room for Rising Use

(Bloomberg) -- A subtle change in language used by the Chinese government has left room for the world’s biggest coal user to prolong rising consumption through the end of the decade.

The Communist Party said in a communiqué on Tuesday that China would seek a peak in coal and oil use during the 15th Five-Year Plan period, which runs from 2026 to 2030. The message differs slightly from that given by President Xi Jinping during an April 2021 speech, when he said Beijing would phase down coal consumption during the 2026-2030 period. 

While each choice of phrasing leaves room for interpretation, there is an important distinction: The new language allows for consumption to peak as late as 2030, while the previous directive required at least some reduction in coal use by then.

“While on the one hand, it’s good that the peak language for coal and oil made it into the proposal at this level, it doesn’t specify when exactly this peak would happen over the next five years,” said Belinda Schäpe, a China policy analyst at the Centre for Research on Energy and Clean Air. “It could leave room for more growth, compared to the previous pledge to reduce coal consumption.”

The new wording perhaps reflects a broader shift in China’s coal industry since Xi’s April 2021 speech. Later that year, the country was hit by a series of widespread power shortages due mostly to a lack of coal. The government responded by pushing for a massive increase in domestic mining and imports, even as it ramped up spending on solar panels and wind turbines.

The role played by the industry is also changing. Rapid growth in renewable energy is squeezing coal out of the power sector, with electricity generated by the fuel falling 2.4% over the first nine months of the year, according to the China Electricity Council. Increasingly, however, coal is being converted into oil products, natural gas and building blocks for plastics.

“In particular, we’re seeing growth in the chemicals sector, which was the largest driver of coal consumption this year,” Schäpe said, adding that significant growth potential in this area would make it “more challenging” for China to meet its 2030 climate targets.

The long-term direction of travel, however, remains firmly toward reduced coal consumption. Gang He, an associate professor at Stony Brook University, said coal’s share in China’s electricity generation was set to fall to about half by 2030 from 58% in 2024. “So while the 15th Five-Year Plan’s language of ‘peaking coal consumption’ may sound softer than Xi’s 2021 pledge to ‘reduce coal consumption’, it reflects a managed transition — recognizing coal’s diminishing but still critical role in maintaining grid stability as renewables expand rapidly,” he said.

Yao Zhe, a policy analyst with Greenpeace East Asia in Beijing, said Xi’s original comments in Chinese always left space for the peak to be at any point from 2026 to 2030. “Back then, people had a more optimistic interpretation,” she said of the 2021 speech.

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