China's Coal Use Flatlined in 2025 as Solar Surged 40% and EVs Hit Half of New Car Sales
Energy Institute data show China's first full year without coal growth in a decade, as renewable additions and EV uptake reshaped fuel demand.
China's coal consumption held flat in 2025, the first year in a decade without growth, as solar power generation jumped 40% year-on-year, adding 336.5 terawatt-hours, and wind output rose 13%, adding a further 133.6 TWh, according to figures from the Energy Institute's Statistical Review of World Energy published on Thursday (2026-07-02).3
The numbers carry weight beyond a single year's data point. Coal demand growing in every year for a decade had been the steady assumption underlying Asian LNG pricing and global carbon trajectories. A halt — without a recession, and during a year when China's electricity consumption continued expanding — shifts that baseline. Electric vehicles crossed 50% of new car sales in China for the first time in 2025, reducing the gasoline and diesel demand that had historically moved in step with economic growth.3
The scale of the solar build is striking. A 40% annual increase in generation reflects an installation pace that has compressed capacity build-out timelines. Energy storage capacity rose 81% between 2024 and 2025, providing the firming that solar's intermittency would otherwise require from dispatchable sources.3
Yet the picture from Q1 2026 complicates a clean reading. Hormuz Strait shipping disruptions weighed heavily on China's crude oil and natural gas imports in April 2026, pushing coal power back into the generation mix for the fourth consecutive month, according to analysis by the Centre for Research on Energy and Clean Air. Total power generation was estimated to have risen 6.6% year-on-year in that period, with weak wind speeds and extended nuclear refuelling outages amplifying the coal rebound.1
That rebound illustrates the sensitivity the system retains to weather and geopolitics. Coal capacity in China was not retired in 2025 — roughly 360 gigawatts had been retrofitted for flexible operation by mid-2024, with a full-fleet upgrade targeting 2027. The fleet remains available. When wind underperforms or import routes are disrupted, coal is dispatched. The flatline in 2025 consumption reflects lower utilisation, not structural removal of capacity.3
Oil demand tells a similarly shifting story. China's oil consumption rose 2.8% in 2025, but the composition changed. EV penetration above 50% of new car sales is redirecting demand growth into the chemicals sector, as gasoline and diesel volumes plateau. Across Asia-Pacific more broadly, transport fuel demand growth has slowed to 1.7% annually.3
Carbon Brief analysis published in 2026 noted that coal power generation fell 1.6% in China and 3.0% in India in 2025, the first simultaneous drop in 52 years, as non-fossil energy sources grew fast enough in both countries to absorb demand growth. The power sectors of China and India together drove 93% of the rise in global CO2 emissions from 2015 to 2024. A reversal alters the trajectory those projections had built in.2
Whether 2025 marks a durable inflection or a one-year pause depends heavily on wind resource and import logistics. The Q1 2026 coal bounce followed a period of weak wind speeds; if seasonal wind patterns normalise through the second half of 2026, coal utilisation may ease. JKM Asian LNG spot prices at $16.02 per MMBtu as of Thursday (2026-07-02) reflect a market pricing adequate supply — the premium that would accompany sustained Chinese coal-to-gas switching at scale is not currently in the curve.3
The coal capacity expansion is what most complicates 2025's flat-consumption milestone. Thermal power commissioning surged more than 160% year-on-year in Q1 2026, reaching a record high, even as renewable capacity additions continued, according to Centre for Research on Energy and Clean Air data. The implied utilisation rate of Chinese coal generation is falling, but the absolute capacity installed is rising.1
How quickly the EV-driven shift in oil demand structure compounds is the next observable. If EVs sustain above 50% of new car sales through 2026 and 2027, gasoline demand growth in China turns negative on an absolute basis. That channels consumption growth into industrial and commercial chemicals feedstocks rather than transport fuels — a compositional shift that crude markets have not yet priced as a persistent feature of Chinese oil demand.3