China Facing Climate Credibility Gap as Coal Expansion Persists Under 15th Five-Year Plan

The annual meeting of the National People’s Congress (NPC) in Beijing has historically served as the primary stage for the Chinese Communist Party to broadcast its economic and strategic roadmap to the global community. As the 15th Five-Year Plan (2026–2030) was unveiled this March at the Great Hall of the People, the international community focused heavily on how the world’s second-largest economy intended to reconcile its status as the leading installer of renewable energy with its continued, and seemingly intensifying, reliance on coal. This period is critical, as it represents the final window for China to meet its self-imposed deadline of peaking greenhouse gas emissions by 2030, a milestone essential to its long-term goal of achieving carbon neutrality by 2060.

However, a detailed analysis of the new five-year plan suggests that China’s earlier climate commitments are facing significant internal friction. In 2021, President Xi Jinping made two landmark pledges: to "strictly control" coal-fired power generation until 2025 and to begin a gradual phase-out thereafter, while also reducing the carbon intensity of the Chinese economy by 65 percent compared to 2005 levels. Four years later, as the 15th Five-Year Plan takes effect, analysts and climate scientists warn that a surge in coal plant construction and a shift in policy priorities toward "energy security" may have placed these targets out of reach.

A Chronology of Pledges and Crises

The trajectory of China’s energy policy over the last decade has been defined by a tension between environmental aspirations and economic pragmatism. In 2015, following the Paris Agreement, China committed to peaking its carbon emissions around 2030. This was bolstered in 2020 and 2021 by President Xi’s "30/60" goals (peaking by 2030 and neutrality by 2060) and specific promises to limit coal.

The momentum toward decarbonization hit a significant roadblock in late 2021. As the country emerged from the COVID-19 pandemic, a sudden surge in industrial demand coincided with a global spike in fuel prices. Because the Chinese government regulated electricity prices while coal prices remained market-driven, many power plants found it more profitable to shut down or claim "technical issues" than to operate at a loss. This resulted in widespread power shortages across 20 provinces, crippling factory production and leaving residential areas in the dark.

In October 2021, then-Premier Li Keqiang signaled a recalibration of the national strategy, stating that "energy security should be the premise on which a modern energy system is built." This marked the beginning of a policy shift where coal was no longer viewed merely as a legacy fuel to be phased out, but as a vital insurance policy against economic instability.

The situation was further complicated in 2022 when a historic drought in Sichuan province caused hydroelectric output to plummet. Sichuan, which typically relies on water for 80 percent of its electricity, was forced to ration power. In response, provincial authorities across China accelerated the approval of new coal-fired plants to ensure local energy independence. By 2023, permitting for new coal capacity reached a ten-year high of nearly 113 gigawatts.

Data Analysis: The Renewable-Coal Paradox

The current state of the Chinese energy sector presents a stark paradox. China is simultaneously the world’s largest producer of wind and solar energy and its largest consumer of coal. In 2024, China installed a record-breaking 300 gigawatts of solar power and 100 gigawatts of wind power. To put this in perspective, China’s renewable installations in a single year frequently exceed the total combined capacity of many developed nations.

Despite this green expansion, the volume of coal consumed continues to rise. While coal’s share of China’s primary energy mix dropped from 69 percent in 2015 to approximately 56 percent in 2024, the absolute quantity of coal burned has increased to meet the country’s soaring total electricity demand. As of 2024, China was responsible for 93 percent of all new global coal-fired power plant construction.

Supporting data from the Center for Research on Energy and Clean Air (CREA) and Global Energy Monitor highlights the scale of this build-out. In 2024 alone, China began construction on 94.5 gigawatts of new coal capacity. Furthermore, there are currently 243 gigawatts of coal power either permitted or under construction, with an additional 149 gigawatts announced. If these projects are completed and operated at traditional levels, the resulting emissions would likely negate the gains made by the country’s massive investments in solar and wind technologies.

The Energy Security Imperative

To understand China’s reluctance to abandon coal, one must look at the geopolitical and domestic concept of energy security. Unlike oil and natural gas, which China must import through vulnerable maritime routes such as the Strait of Malacca, coal is an abundant domestic resource. China possesses approximately 13 percent of the world’s recoverable coal reserves.

For Chinese planners, coal represents a hedge against external shocks. Nearly half of China’s oil supply originates in the Middle East, a region prone to volatility. In the event of regional conflict or trade blockades, domestic coal remains the only fuel capable of powering the Chinese industrial machine without interruption. This "ballast" role of coal has been reinforced in the 15th Five-Year Plan, which emphasizes the "clean and efficient use of coal" rather than an immediate reduction in its use.

Institutional Obstacles and Vested Interests

The structure of the Chinese power grid also plays a significant role in maintaining the status of coal. Power generation is largely managed at the provincial level, where local governments prioritize GDP growth and employment. Coal mines and power plants are major employers and taxpayers in many inland provinces.

Historically, the Chinese grid was designed around the steady, predictable output of coal plants. Grid operators often have long-term contracts with coal generators, granting them preferential access to the market. This has led to "curtailment," where renewable energy from wind and solar farms is wasted because the grid cannot or will not prioritize it over coal-based electricity.

While there have been concerted efforts to reform the electricity market to favor renewables, the government continues to argue that coal is necessary for "grid balancing." Because wind and solar are intermittent, coal plants are kept in a state of "spinning reserve"—idling and burning fuel so they can ramp up production the moment renewable output drops. However, environmental analysts point out that this is an inefficient and carbon-intensive way to manage a grid, especially as cheaper and cleaner energy storage technologies become available.

The Threat of Stranded Assets

Economists have raised alarms regarding the financial sustainability of China’s coal spree. As more renewable energy comes online and energy storage technology improves, the utilization rates of coal-fired plants are declining. Many of the new plants approved in 2022 and 2023 are located in provinces that already have surplus generating capacity.

Building thousands of megawatts of capacity that may only operate for a fraction of the year creates a massive risk of "stranded assets"—investments that will never provide a financial return. Estimates suggest that the cost of these redundant coal projects could reach into the trillions of yuan, potentially straining the balance sheets of state-owned enterprises and local governments already dealing with significant debt.

Missing Efficiency Targets

Another area of concern in the 15th Five-Year Plan involves energy intensity—the amount of energy required to produce one unit of GDP. Xi Jinping’s 2021 pledge to reduce carbon intensity by 65 percent by 2030 required steady, incremental progress. However, China recently missed its energy density target for the first time. While the government aimed for a 17 percent improvement over the last five years, it achieved only 12.4 percent.

This failure suggests that China’s economic growth remains heavily "energy-heavy." To manage this, the new Five-Year Plan has introduced changes to how energy intensity is calculated, a move that some analysts interpret as an attempt to lower the bar for success and mask the difficulty of decoupling economic growth from carbon emissions.

Broader Impact and Global Implications

The decisions made within the framework of the 15th Five-Year Plan have consequences that extend far beyond China’s borders. As the world’s largest emitter, China’s ability to peak its emissions by 2030 is the single most important factor in determining whether the global community can limit warming to 1.5 degrees Celsius.

While the 15th Five-Year Plan reaffirms China’s commitment to expanding the renewable sector—noting that battery storage capacity has increased twenty-fold in the last four years—the lack of a clear timeline for retiring coal plants remains a glaring omission. The expansion of pumped hydro and battery storage offers a viable alternative to coal for grid stabilization, yet the political and economic influence of the coal lobby continues to dictate energy policy.

In conclusion, China stands at a crossroads. Its industrial policy has successfully positioned it as the global leader in the green technologies of the future, from electric vehicles to solar panels. Yet, its domestic energy strategy remains anchored in the carbon-intensive past. Whether the 15th Five-Year Plan is remembered as a pragmatic bridge to a green future or a missed opportunity to avert climate catastrophe will depend on whether Beijing chooses to prioritize its long-term environmental pledges over short-term energy security concerns. For now, the "strictly control" promise of 2021 appears to have been superseded by a mandate to build at any cost.