Despite aggressive investments in renewable energy, both India and China are deepening their reliance on coal — a move that experts warn could jeopardize their long-term climate commitments and the global push to limit warming to 1.5°C.
According to Global Energy Monitor, China and India together accounted for a staggering 87% of all new coal power capacity that came online in the first half of 2025. While much of the world continues to move away from coal, these two Asian powerhouses remain the last major strongholds of fossil fuel.
In stark contrast, Ireland recently became the fifth EU country to phase out coal power entirely, while Latin America now stands as a region with zero active proposals for new coal capacity. The United States, too, is on track to retire more coal capacity in 2025 than it did last year — even amid political uncertainty — reinforcing the West’s continued shift toward decarbonization.
Coal’s Stronghold in Asia
For India, coal remains the backbone of its electricity supply. It currently fuels around 70–75% of India’s annual power generation and makes up roughly half of its installed capacity. Despite adding a record 28GW of wind and solar capacity in 2025 — nearly a 50% increase from the previous year — the government continues to emphasize coal expansion to meet soaring energy demand.
India’s Ministry of Coal projects that coal use will not peak until 2040, far beyond the timelines recommended by the International Energy Agency (IEA), which has called for advanced economies to phase out coal by 2030 and the rest of the world by 2040 to meet Paris Agreement targets.
The first half of 2025 alone saw 12.8GW of newly proposed coal projects in India, while China proposed 74.7GW — compared to just 11GW combined across all other countries. Indonesia, another major coal user, increased its proposed coal-power capacity by 5.1GW, reaching 17.1GW in total.
Bridging the Demand Gap
Indian policymakers argue that coal expansion is a pragmatic response to a fast-growing economy and surging electricity demand. The country aims to reach 500GW of non-fossil fuel capacity by 2030, up from 225GW today, meaning an additional 275GW must be built in just five years — nearly 50GW a year.
However, constraints such as limited transmission infrastructure, land acquisition hurdles, and distribution companies’ financial weaknesses are slowing progress. “Renewables are growing rapidly,” says an energy policy analyst, “but they’re not growing fast enough to meet demand. Coal is being added simply to bridge that gap.”
Reliability Concerns and Public Perception
Public confidence in renewables has also been tested. Earlier this year, a blackout in Spain and Portugal was widely attributed to fluctuations in renewable generation, reigniting debates over reliability and grid stability. Such incidents make it harder for governments to convince citizens that renewables can consistently power modern economies without backup from fossil fuels.
The Future of Coal
Despite international pressure, coal remains one of the most abundant and accessible energy sources, with power plants that are relatively simple to operate. Analysts predict that China and India will continue to rely heavily on coal well into the 2030s, unless large-scale carbon capture, utilization, and storage (CCUS) technologies become viable and affordable.
Experts stress that if coal consumption is to continue, it must be paired with aggressive carbon mitigation measures. Without this, the zero-emission targets of both nations — and global efforts to limit climate change — could be at serious risk.
As the world races toward decarbonization, the diverging paths of East and West highlight a growing tension: while wealthier regions accelerate their exit from coal, developing economies argue they cannot yet afford to do the same. The result is a widening gap — not just in emissions, but in the pace and equity of the global energy transition.