China is on track to issue the lowest number of new coal plant permits in four years in 2025, according to a recent analysis by Greenpeace. The trend reflects the country’s growing reliance on renewable energy and declining demand for new coal-fired power capacity.

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Sharp Decline in New Coal Permits

Data from Greenpeace shows that China has permitted 41.8 gigawatts (GW) of new coal plant capacity in the first three quarters of 2025. If this pace continues, total permits for the year will fall to the lowest level since 2021, signaling a significant shift in China’s energy planning.

The new approvals represent an estimated 171.5 billion to 181.5 billion yuan ($24.2 billion to $25.6 billion) in investments, with 85% of the projects led by state-owned enterprises. This highlights the continued dominance of government-backed firms in China’s energy infrastructure.

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Renewable Energy Reducing Coal Demand

According to Gao Yuhe, Greenpeace East Asia’s climate and energy project manager:

“As the share of renewable energy generation increases, China’s additional electricity demand can now be fully met by wind and solar power. Expectations for coal power generation and profitability have also declined, leading to a drop in approval volumes.”

The country’s renewable energy fleet, including solar and wind, is increasingly capable of meeting incremental electricity demand, reducing the need for new coal plants.

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Historical Context and Five-Year Plan Trends

China experienced a spike in coal plant permits between 2022 and 2023 due to coal and power shortages that alarmed regulators. However, as the crisis eased and renewable energy generation expanded, permits began to decline in 2024.

Despite the recent slowdown, total coal plant permits for China’s 14th five-year plan period (2020-2025) already exceed twice the total permits approved in the previous five-year plan, reflecting the earlier surge in approvals.

Gao noted that 2025 being the final year of the current plan may also contribute to lower permit approvals, as many projects were already approved earlier in the cycle.

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China’s Energy Transition and Future Outlook

China continues to pursue its “new power system” strategy, which emphasizes:

• Greater use of renewable energy for base electricity demand
• Coal playing a supporting role rather than the dominant source
• Gradual transition toward cleaner energy sources while maintaining grid stability

If this transition continues successfully, the rate of coal plant permitting could decline further in the next five years, making 2025 the peak year for the current downward trend.

While China committed in 2021 to phase down coal consumption between 2026-2030, the country’s 2035 climate goals, released in September 2025, did not establish new targets for coal. This indicates that coal will likely remain a component of China’s energy mix, albeit at a reduced and more strategic level.