Proposals to build coal-fired plants in China reached a record high in 2025, finds a new study.
The report, released by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM), says that, in 2025, developers submitted new or reactivated proposals to build a total of 161 gigawatts (GW) of new coal-fired power plants.
The new proposals come even as China’s buildout of renewable energy pushed down coal-power generation and carbon dioxide (CO2) emissions in 2025, meaning many coal plants are already running at just half of their maximum capacity.
The co-authors argue that while clean-energy growth may limit emissions from coal power in the short term, the surge in proposals could lock in new coal assets, “weaken…incentives” for power-system reform and help keep coal capacity online in spite of China’s climate goals.
The high rate of new proposals, the study says, likely reflects a “rush by the coal industry stakeholders” to develop projects before an expected tightening of climate policy in the next five years.
In addition, “misaligned” payment mechanisms are encouraging developers to propose large-scale coal units, which – if developed – could impact the transition of the coal sector from playing the central role in electricity generation to flexibly supporting a system built on clean power.
Significant additions pushing down running hours
The report finds that the amount of new coal-fired power proposals by Chinese developers, including reactivated applications, hit a new peak in 2025, at 161GW. This is equal to 13% of the coal capacity currently online in China.
The country is continuing to add significant coal-power capacity, with a record 95GW added to the grid last year and another 291GW in the pipeline – meaning units that have been proposed, are actively under construction or have already been permitted.
Moreover, around two-thirds of coal-power capacity proposed in China since 2014 has either been commissioned – meaning it has been completed and started operating – or remains in the pipeline, Christine Shearer, report co-author and research analyst at thinktank Global Energy Monitor, tells Carbon Brief.
She adds that this is the “reverse of what we see outside China, where roughly two-thirds of proposed coal capacity never makes it to construction”.
Coal remains a significant part of China’s power mix, making the nation’s electricity sector one of the world’s largest emitters. Indeed, the power sector emitted more than 5.6bn tonnes of carbon dioxide (GtCO2) in 2024 – meaning that if it were its own country, it would have the highest emissions of any country except China itself.
But emissions from the power sector have been flat or falling since March 2024, according to analysis for Carbon Brief by CREA lead analyst Lauri Myllyvirta.
This is largely due to China’s rapid installation of renewable power, which is covering nearly all of new electricity demand and pushing coal generation into decline in 2025.
Some parts of the coal-power pipeline are reflecting this shift. In 2025, construction began on 83GW of new coal capacity – down from 98GW in 2024.
In addition, new permitting fell to a four-year low, at 45GW, which could point to tighter controls on coal-plant approvals in the future, says the report.
The chart below shows the amount of new coal-power capacity being proposed in China each year, in GW.
The shift from new power demand being met by coal to being met by renewable energy means any “additional coal power capacity would face structurally low utilisation”, the report says, referring to the number of hours that plants are able to operate each year.
This reduces coal-plant earnings needed to cover the cost of investment and makes instances of “stranded [coal] assets and compensation pressures” more likely.
A previous analysis for Carbon Brief finds that “larger additions of coal capacity are often followed by falling utilisation” – meaning that the construction of new coal plants does not necessarily increase emissions.
Utilisation rates for coal-fired power plants have hovered around 51% since 2025, according to the CREA and GEM report.
Shearer argues that while low utilisation rates would “dampen the immediate impact on annual CO2 emissions”, in the long-term the buildout “locks capital into fossil fuels” and “weakens incentives to build the cleaner forms of flexibility” needed for a renewables-centred system.
Low utilisation has also not led to coal plant capacity being retired in any notable way, the report notes, with generators instead supported by the coal “capacity payment” mechanism and extending the life of older units.
Delayed retirement of older coal plants causes “persistent overcapacity” and adds to calls for further compensation and policy support, the report says.
Coal generation has “no room to expand” under China’s international climate pledge for 2030, it adds, with utilisation rates for coal units likely to fall to 42% if renewables continue to meet all additional demand and if all of the plants currently under construction or permitted are brought online.
Crunch-time for coal
The surge in new proposals reflects a “rush” by the coal industry to ensure their projects are approved before the policy environment tightens, according to the report.
China is expected to introduce absolute emissions targets over the next five years. While these are expected to be aspirational for the first five years – alongside binding targets for carbon intensity, the emissions per unit of GDP – from 2030 they will be binding.
The current five-year period until 2030 will also likely see most of China’s energy-intensive industries pulled into the scope of its national carbon market.
In the power sector, government officials have said that coal is expected to shift from playing a major role in power supply to supporting “flexibility” operations.
This would require coal plants to shift between varying load levels and respond quickly to changes in demand and other system needs.
However, the report finds, the approvals for coal power “continue to reflect expectations of high operating hours”, instead of flexible operations.
For many of these proposals, planned annual utilisation was stated to be more than 4,800 hours, or 55% of hours in the year. This is greater than the 4,685 utilisation hours (53%) logged in 2023, the year in which the most coal power was generated over the past decade, according to data shared by the report authors with Carbon Brief.
In addition, the report says that many of the new coal-power proposals in 2025 were for “large-scale units”, each representing at least 1GW of power, as shown in the figure below.
These larger units are designed for “stable, continuous operation” and are “poorly suited to the type of flexibility increasingly required in a power system dominated by wind and solar”, says the report.
This suggests that “project developers still anticipated base-load style operation”, it adds, “sitting uneasily” with the fact of higher clean-energy generation and falling coal plant utilisation.
Reliance on sales and subsidies
This persistence in developing large-scale units could be explained by the financial incentives that govern the coal-power industry.
Coal power plants are cheap to build but risk low profits and high costs, with many current operators already facing losses at recent utilisation rates.
In 2024, the government established a capacity payment mechanism for coal-fired power plants. This mechanism rewards developers for adding “seldom-utilised, backup” capacity to the grid.
These capacity payments, as well as regulated pricing and implicit government backing “can make plants viable on paper even if utilisation and operating margins are weak”, Shearer tells Carbon Brief, which may explain the continued appetite for new coal from developers.
More than 100bn yuan ($14bn) in capacity payments were made to coal plants in 2024, although it has not yet had a discernable impact on utilisation.
Large-scale units, the report says, are “particularly well positioned” to benefit from the policy, as it rewards maximising capacity and does not favour plants that are more suited for flexible operations.
(The Chinese government recently announced plans to adjust the mechanism, confirming that in some cases capacity payments could be more than the initial expected threshold of 50% of a benchmark coal plant’s total fixed costs.)
Meanwhile, the report adds that coal-fired power plants continue to earn most of their revenue from selling electricity, with only 5% of total income coming from capacity payments.
As such, these “misaligned incentives” encourage producing power and installing significant new capacity, despite the government’s aim to shift coal to a supporting role in the system.
Shearer tells Carbon Brief that a better approach to flexibility would be to “adopt technology-neutral flexibility standards”, rather than focusing on “flexible coal”, which would mean coal would have to “compete directly with storage, demand response, grid upgrades and other clean options”. She adds:
“The risk of coal-specific flexibility policies is that they lock in capacity rather than solve the underlying system need.”
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‘Rush’ for new coal in China hits record high in 2025 as climate deadline looms
One of the key expected outcomes from the upcoming COP31 climate summit in Antalya, Turkey, is the launch of a “just transition mechanism”.
This follows years of calls from civil society to support a “just transition” as countries shift towards low-emissions energy systems and away from fossil fuels.
At the COP30 UN climate talks last year in the Brazilian city of Belém parties agreed to establish a “mechanism” to support this goal, called the “Belém-Antalya mechanism” (BAM).
Groups that have championed the BAM want it to act as a central hub on just transitions, providing support for workers and communities around the world.
However, the details of exactly what the much-touted BAM will consist of remain vague, with developed and developing countries disagreeing about its functions and purpose.
Disagreements continued at the UN climate talks in Bonn in June 2026, including on the crucial question of how the BAM will be financed.
Here, Carbon Brief looks at where the idea for the BAM came from, how it could support just transitions and what to expect from COP31.
How has a ‘just transition’ featured in UN climate talks?
A “just transition” is the idea that workers and communities should be supported in the shift to a low-carbon economy. It is a central principle behind the idea of climate justice.
Often, the term refers to those linked to the fossil-fuel industry, but it can also refer to transitions taking place in agriculture, heavy industry and various other sectors.
The concept originated in the 1980s, when US labour unions forged alliances with environmental justice groups. It has since become a key part of international climate discussions.
The preamble to the 2015 Paris Agreement includes a commitment to “tak[e] into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities”.
Bert De Wel, policy officer at the International Trade Union Confederation (ITUC), tells Carbon Brief:
“The labour movement is very happy with the wide audience and broad political support that the concept has received since its inception in the 1980s. The inclusion in the Paris Agreement, with the reference to the creation of decent work and quality jobs was a milestone for the movement. While other demands have been added…we continue to stress the labour dimension as being central to the concept.”
Three years after the creation of the Paris Agreement, at COP24 in the former coal-mining city of Katowice, the Polish presidency highlighted the issue of just transitions.
The need for carbon-cutting policies to ensure “a just transition of the workforce” that creates “decent work and quality jobs” was included in the “Silesia declaration”, issued by the presidency during the first week of COP24.
While the declaration was only signed by 50 countries – roughly a quarter of the parties at the summit – it was still “noted” in the final COP text.
This helped to drive momentum behind the idea, culminating in formal agreement at COP27 in Egypt to launch a “work programme on just transition” (JTWP).
De Wel says the establishment of the JTWP was a “major step forward” that allowed parties to “speak about just transition in more concrete terms”.
In the years since, negotiators have worked to flesh out the JTWP, with disagreements between parties about what its purpose should be.
Broadly, developed countries would like it to focus on domestic workforces, while some nations want a more global outlook, including support for transitions in developing countries.
The JTWP has proved a challenging negotiating space, with talks at the COP29 summit in 2024 closing without an agreement, in what one observer dubbed a “betrayal”.
However, despite these frustrations, parties at COP30 in Brazil agreed to establish a new institutional mechanism on just transitions, which has become widely known as the BAM. The move was hailed as a “victory” by civil society.
Where did the ‘just transition mechanism’ come from?
In the run-up to COP30, civil society began to push for the establishment of an “institutional arrangement” that would move work under the JTWP from talk into action.
(This was originally called the “Belém action mechanism” by civil society groups, who subsequently updated this to the “Belém-Antalya mechanism” following the outcome at COP30. However, in the JTWP text agreed at COP30 it is only described as a “mechanism”, sometimes also referred to as the “just transition mechanism”.)
Anabella Rosemberg, senior advisor on just transition at NGO umbrella group Climate Action Network (CAN) International, tells Carbon Brief:
“The idea of the mechanism emerged from the collaboration of civil society, trade unions, feminist groups, youth and Indigenous peoples in the UNFCCC.
“It was clear that the kind of activities being run under the JTWP – two dialogues a year and one ministerial – would not support the delivery of just-transition strategies on the ground, so a new approach was developed to get words into action.”
Following the inception of the idea, civil society did “tonnes of stuff to boost it up the agenda”, Dr Leon Sealey-Huggins, a senior campaigner at the charity War on Want, tells Carbon Brief.
This ranged from presenting demands and proposals to different constituents, organising joint letters and writing policy papers, all the way through to designing logos, creating memes and even a song.
These efforts ultimately paid off: during the Bonn climate negotiations in June 2025, one draft text included the idea for a new institutional arrangement. One of the options in the draft text was for a “toolbox, guidance framework, global platform, technical assistance network [or] mechanism”.
![Paragraph 28 of the JTWP text published 25 June 2025. The text reads "28. Options for further implementation of the United Arab Emirates just transition work programme Option 1: Improving existing modalities Option 2: New institutional arrangements [toolbox, guidance framework, global platform, technical assistance network, mechanism] Option 3: Defer decision to 2026"](https://www.carbonbrief.org/wp-content/uploads/2026/11/para28-1024x334.png)
This inclusion was broadly welcomed as a “big win” for civil society groups, although parties acknowledged that more needed to be done to flesh out the idea.
Going into COP30, civil society groups continued to push the idea of creating a BAM, with protests, banners and badges visible around the venue.
Early in negotiations, the G77 and China – a large coalition of developing countries at UN climate talks – put forward their own proposal for a just transition “mechanism”. This, they suggested, could provide technical assistance, support international cooperation and help to foster partnerships in an effort to address implementation gaps.
Their proposal faced initial pushback from developed-country parties including Norway, the UK and others, who opposed it due to concerns that it would duplicate existing systems and require additional funding.
Developed countries also opposed the use of the term “mechanism”, with the EU suggesting an “action plan” as a potential alternative. Nevertheless, the creation of a “mechanism” was included in the final draft text on the JTWP.
This text was formally approved during the COP30 closing plenary to extended applause from many in the hall.
In a statement at the time, Chiara Martinelli, director at CAN Europe, welcomed the decision:
“Delivering BAM was a major civil society win. It creates a coordinated institutional home to drive forward progress on the just transition.”
The decision to develop the mechanism included a request for parties to work over the subsequent year – through to COP31 – on a plan to get things started.
What role could the mechanism play in facilitating ‘just transitions’?
According to civil society, the BAM could help tackle the fractured just-transition landscape by centralising resources and helping to overcome a number of barriers.
Speaking to Carbon Brief, Rosemberg says the just-transition space “lacks coordination and the right kind of support and is quite disconnected from climate action imperatives”. She adds:
“The BAM can play a role in bringing those [people] trying to make just transition happen together, identify gaps and barriers, foster cooperation and accelerate support.”
Civil society has put forward a number of proposals likely to inform the structure of the BAM. Most consist of a mechanism with three parts, which would encompass and expand upon the work that is currently being carried out under the JTWP.
One proposal by a coalition of five NGOs suggests the mechanism is formed of a steering body, a “knowledge arm” and an “implementation arm”.
The steering body would coordinate the work of the two arms of the BAM, including deciding the topics that should be discussed under the ongoing JTWP, which will continue to feature in climate negotiations. They suggest the body would recommend topics that require negotiation when “gaps that require political guidance are identified”.
Their proposal is illustrated in the infographic below, showing the steering body acting as a central hub for work within the BAM.
The final part of the BAM, the “implementation arm”, would act as a hub to enable and coordinate technical, financial and knowledge-based assistance for those pursuing a just transition.
Rosemberg says the vision of civil society is for work to go “beyond negotiators’ dialogues”. She says the BAM could enable the organisation of a “matchmaking platform” to provide support faster, as well as dedicated groups to identify and mobilise financial resources. She adds:
“Finally, through bottom-up identification of barriers, the BAM can also allow a discussion on enabling just transition that is informed by practitioners. The BAM can show that implementation does not necessarily mean taking issues outside of the UNFCCC.”
A separate proposal for the structure of the BAM from the Global Campaign to Demand Climate Justice (DCJ) – a separate coalition of NGOs – similarly proposes three elements. These would be: coordination and coherence; knowledge generation; and international cooperation and support.
Sealey-Huggins, who is affiliated with DCJ, notes:
“If it works in practice, what we’ll see is a cascade of just-transition policies implemented across countries, across sectors in a unifying, transformational moment for justice-centered climate action, and that will be the key to unlocking the transition that’s been missing so far.”
Another proposal for the BAM comes from the Grantham Institute at the London School of Economics. It suggests the three functions of the mechanism should be capacity-building, technical assistance and knowledge-sharing, but it recommends a dual-arm structure comprising a policy arm and an operational arm.
De Wel tells Carbon Brief that while there is “rather broad consensus on