China is the world's largest consumer of coal, burning nearly half of the global total in 2024. This massive use is driven by its huge economy, high electricity demand, and abundant domestic coal resources. China generates about a third of the world's electricity, with coal as the dominant source. Despite rapid growth in renewable energy, China's increasing electricity needs mean it is not on track to meet its carbon intensity targets set for 2030.

Electricity demand in China is growing fast, partly because more sectors are switching to electric power, such as electric vehicles and high-speed rail. These changes can reduce emissions overall, but only if the electricity comes from cleaner sources. Currently, coal still dominates, and the country's power grid is designed around coal's flexibility and local control, which makes it hard for renewable energy to fully replace coal power.

China has made impressive progress in building renewable capacity, including solar, wind, and hydropower, and is expanding energy storage technologies like batteries and pumped hydro. However, the grid and electricity markets are not yet ready to handle the intermittent nature of renewables efficiently. Prices are mostly fixed, and electricity trading across regions is limited, which hinders the integration of clean energy.

To truly reduce coal use, China needs to reform its electricity market to better match supply and demand, improve grid infrastructure, and implement carbon pricing that makes coal more expensive. Although China is building new coal plants, many operate below capacity, and there are efforts to pay coal plants for being available as backup. The government has started a carbon market, but it currently lacks strict limits on emissions, reducing its effectiveness.

China faces a complex challenge: balancing its growing energy needs with the urgent need to cut coal use and emissions. Deep decarbonization will require major changes in policy, market design, and infrastructure to prioritize clean energy over coal.