Global Coal Paradox: Capacity Rises While Usage Declines in 2025, Says GEM Report

A striking paradox is emerging in the global energy transition. Even as countries continue to build new coal-fired power plants, the actual use of coal for electricity generation is declining, according to a new report by Global Energy Monitor (GEM).

The latest edition of Boom and Bust 2026, the flagship annual assessment of the global coal fleet, reveals that global coal power capacity increased by 3.5% in 2025, while coal-fired electricity generation fell by 0.6% during the same period.

Clean Energy Surge Driving the Shift

The divergence is most evident in China and India, where rapid expansion of renewable energy is reshaping power systems. Record additions in wind and solar energy have met nearly all incremental electricity demand, reducing reliance on coal even as new plants continue to be commissioned.

According to the report, this trend reflects a structural shift in coal usage, indicating that the global transition away from high-emission fossil fuels is becoming increasingly resilient, despite short-term geopolitical disruptions such as tensions in the Strait of Hormuz.

Coal Expansion Becoming Geographically Concentrated

Coal development is now heavily concentrated in a small number of countries. In 2025, only 32 countries were actively proposing or building coal plants—down significantly from 75 countries in 2014.

Notably, 95% of global coal plant construction is now concentrated in China and India, while just 5% occurs in the rest of the world.

Regions are also moving away from coal:

• Latin America achieved “No New Coal” status in 2025
• South Korea committed to a complete coal phaseout
• Türkiye reduced its pipeline to just one active proposal

China and India Lead Capacity Growth but Cut Usage

China continues to dominate global coal expansion:

• Coal capacity grew by 6%, while generation declined by 1.2%
• A record 161.7 GW of new and reactivated projects were recorded
• Over 500 GW of coal capacity remains under development

India shows a similar pattern:

• Capacity increased by 3.8%, but generation dropped by 2.9%
• 27.9 GW of new coal proposals were recorded in 2025
• The country has over 130 GW of coal capacity in planning and construction
• The government aims to add 100 GW of coal capacity over the next seven years

At the same time, India crossed a major milestone, with non-fossil fuel capacity exceeding 50% of total installed power capacity in 2025.

Delayed Retirements Slowing Transition

Globally, coal phaseout efforts are facing delays:

• Nearly 70% of coal plants scheduled for retirement in 2025 remained operational
• In the European Union, 69% of retirements were postponed, largely due to the 2022–23 energy crisis
• In the United States, delays were often linked to direct government interventions to maintain grid stability

Emerging Markets Show Mixed Trends

Outside China and India, coal trends vary widely:

• Indonesia expanded its coal fleet by 7%, driven partly by industrial demand for nickel and aluminium processing
• Pakistan is increasingly stabilising its energy mix through distributed solar
• Bangladesh continues to face challenges in fossil fuel supply and renewable deployment
• In Africa, new coal proposals remain concentrated in Zimbabwe and Zambia

A Policy Challenge Ahead

Christine Shearer, Project Manager of GEM’s Global Coal Plant Tracker, highlighted the central dilemma: “The world is building more coal but using it less. Even countries driving coal expansion are adding renewable energy fast enough to displace it. The real challenge now is policy inertia that continues to treat coal as essential.”

Outlook

The report underscores that the future of coal will be shaped less by technological feasibility and more by policy decisions. While renewable energy is increasingly capable of meeting demand, the persistence of coal-friendly policies continues to drive capacity expansion.

With global momentum shifting toward cleaner energy systems, the coming years will determine whether coal’s role continues to diminish in practice—or persists due to institutional and policy constraints.

The writer of this article is Dr. Seema Javed, an environmentalist & a communications professional in the field of climate and energy