Coal-fired power generation has stopped growing in 17 of China’s 26 provinces and regions, while fossil fuel consumption has already passed its peak in eight of 11 industrial sectors, according to a new analysis by global energy think tank Ember.
China’s thermal power generation, which is predominantly coal-based, declined 0.7% in 2025 even as electricity demand increased 5%. Ember said the decline is significant because the previous reduction in thermal generation occurred in 2015, when electricity demand grew by only 0.5%. The latest figures indicate that clean electricity generation is expanding rapidly enough to meet rising electricity demand while also reducing the role of coal in the power mix.
The analysis describes this shift as a transition from China’s previous approach of “building before breaking,” referring to the expansion of clean energy alongside a growing fossil fuel system, toward “building while breaking,” where the country must simultaneously expand its clean energy infrastructure and manage the decline of conventional energy assets.
Coal Growth Stalls Across Major Industrial Regions
The 17 provinces and regions where coal generation has stopped growing include major industrial centres such as Shandong and Hunan. Together, these regions account for more than half of China’s thermal power capacity.
Coal generation has also remained broadly flat on a 12-month rolling average since early 2024, suggesting that the decline recorded in 2025 may represent a broader structural trend rather than a temporary reduction.
China’s power system is also seeing a growing contribution from clean flexibility technologies. Battery storage capacity overtook pumped-hydro storage at the end of 2024 and expanded by another 84% in 2025. Ember said average utilisation of the battery storage fleet roughly doubled between 2022 and 2025, indicating that the installed systems are increasingly being used to support power system operations.
Electrification Reduces Fossil Fuel Use Across Industry
Fossil fuel consumption has already passed its peak in eight of the 11 industrial sectors assessed by Ember, with most of the sectoral peaks occurring after 2018.
The decline has been particularly pronounced in several industries. Fossil fuel use has fallen 26% in food and beverages, 52% in transport equipment and 71% in fossil fuel extraction, according to the analysis.
The trend is being driven largely by increasing electrification. In light manufacturing sectors such as machinery, electronics and textiles, electricity now accounts for around three-quarters of final energy consumption. Electrification is also expanding into more energy-intensive sectors, including metals smelting and non-metallic minerals.
The transport sector is undergoing a similar transition. Electric passenger vehicles accounted for 67% of new vehicle sales in June 2026, while electric truck sales more than doubled in both 2024 and 2025. Electric trucks represented 26% of new truck sales in 2025, with China accounting for nine out of every 10 electric trucks sold globally during the year.
Fossil Fuel Decline Not Linked to Industrial Contraction
Ember said the reduction in fossil fuel consumption does not indicate a decline in China’s industrial activity. Industrial value added per capita continues to increase while fossil fuel use per capita has fallen from its peak in the early 2010s.
Electricity accounted for 29% of China’s final energy consumption in 2024, up from 22% in 2015. This compares with approximately 23% in Europe and 21% in the United States.
The shift toward electrification is also affecting China’s energy security. China imports more than 70% of its oil and has significant exposure to disruptions around the Strait of Hormuz. Ember estimates that China’s electric vehicle fleet displaced around 0.4 million barrels per day of gasoline demand in 2024, compared with approximately 0.1 million barrels per day in 2020.
Total avoided oil demand reached at least 1 million barrels per day, according to the analysis. Ember argues that reducing structural oil demand can lower exposure to supply disruptions more directly than relying solely on strategic reserves or diversified suppliers.
China’s Energy Transition Could Reshape Global Fossil Fuel Demand
China has been a major driver of global fossil fuel demand over the past two decades. Between 2000 and 2025, the country accounted for around half of the global increase in oil demand and more than 90% of the growth in coal demand.
China’s latest Five-Year Energy Plan expects oil and coal consumption to peak by 2030, while targeting electrification of 35% of energy consumption. Ember said developments across China’s provinces and industrial sectors suggest that the transition may increasingly be driven by changes within the energy system itself, rather than solely by government targets.
At the same time, China is becoming a major supplier of clean energy technologies to global markets. Clean technology exports exceeded $220 billion in 2025 and accounted for 6.6% of total Chinese exports in the first half of 2026, up from 2.7% in 2020.
The shift means countries that previously supplied China with fossil fuels are increasingly importing Chinese clean-energy technologies, including electric vehicles, batteries and solar panels. According to Ember, the changing pattern of energy consumption and technology trade could have broader implications for global fossil fuel demand and the pace of the energy transition.
