Geopolitical conflicts, such as the persistent friction between the US and Iran, lay bare the inherent volatility of global commodity markets, proving that true energy security relies fundamentally on domestic resources. Against this backdrop, China is aggressively doubling down on coal to shield its economy from external shocks.
During the first half of 2026, Beijing brought online 30 GW of new coal-fired capacity—representing a 43% year-on-year surge—while decommissioning just 2.7 GW, according to reports by CREA and GEM. With another 25.4 GW currently under construction and a massive pipeline totaling 274 GW (roughly 22% of its operating fleet), coal continues to anchor China’s power grid.
Despite rapid investments in renewables, grid bottlenecks often strand clean energy, and long-term contracts maintain strong demand for fossil-fuel generation, which rose by about 3% in H1 2026. Experts caution that this massive coal expansion stems largely from legacy permits and political safeguards rather than optimized grid planning, carrying structural overcapacity risks.
Between January and June 2026, China’s domestic coal output reached 2.37 billion tons (down 1.7% YoY), with nearly 70% concentrated in three core provinces: Inner Mongolia, Shanxi, and Shaanxi. Accounting for 94% of the nation’s fossil fuel reserves, coal is heavily utilized not just for electricity, but also to produce chemical substitutes and synthetic hydrocarbons. Additionally, China imported 225.40 million tons of coal in the same period—predominantly thermal coal from Indonesia—maintaining a vital buffer against geopolitical disruptions.
This pragmatic approach has sparked debate in Europe. Polish mining union leaders emphasize that while Beijing secures its energy independence by maximizing both domestic production and imports, Europe’s regulatory pressures risk squandering local resources, warning that global instability demands total reliance on domestic supply bases.
