Despite relentless headlines about the global energy transition, coal is proving to be far more resilient than many expected. While renewable energy capacity continues to expand, the global power grid’s demand for reliability, affordability, and flexibility has kept coal firmly in the mix. From China's infrastructure ambitions to U.S. policy shifts, the outlook for coal remains surprisingly strong, with a patchwork of regional dynamics shaping a new era for this old energy source.

China: Coal as a Strategic Pillar

Nowhere is coal’s staying power more evident than in China. In a move that surprised some observers, China’s state planner recently affirmed plans to continue building coal-fired power plants through at least 2027. These plants are not merely legacy projects; they are being designed with flexibility in mind to support intermittent renewable power sources like wind and solar. The objective is clear: maintain grid stability while continuing the shift toward lower carbon intensity over time [1].

In tandem, China’s coal consumption is now expected to peak in 2028, which is a full year later than earlier projections. This shift reflects a renewed emphasis on domestic supply along with sustained demand from key sectors such as chemicals and manufacturing [1].

Simultaneously, a meaningful trend is emerging in Chinese imports. Coal imports dropped by 6% year-over-year in March, marking the first decline in two years [2]. This is not a sign of weakening demand, but rather a shift toward using cheaper domestic supply. With domestic coal prices at a four-year low, buyers are favoring local sources, pushing down import volumes while stabilizing internal inventories [2].

America’s Evolving Coal Strategy

In the United States, coal is once again in the spotlight, this time due to evolving regulatory developments. President Donald Trump signed a series of executive orders aimed at revitalizing the domestic coal industry, including extending the lifespan of older power plants and lifting federal restrictions on mining operations [3]. While controversial, the measures underscore how deeply political will can shape energy markets.

Although the Energy Information Administration (EIA) projects a gradual decline in U.S. coal production from 512 million short tons in 2024 to 467 million by 2026, recent policy developments could help slow the pace of that decline [5]. Moreover, demand from industrial sectors and international markets may create support levels that keep U.S. production more resilient than models currently predict.

A Global Balancing Act

At the global level, the coal demand picture is nuanced. The International Energy Agency (IEA) projects that coal demand will plateau through 2027 at around 8.87 billion tonnes, rather than fall significantly [4]. This flattening reflects a tug-of-war between declining demand in advanced economies and increasing consumption in emerging markets. Countries like India, Indonesia, and Vietnam continue to rely on coal to meet the soaring energy demands of a growing middle class and expanding industrial base [4].

Rather than being viewed solely as a climate liability, coal is increasingly being recognized as a transitional necessity that supports the growth of renewable energy without compromising energy security. The notion of coal as a “backup” has turned it into a cornerstone of flexible grid design, especially in economies with limited access to grid-scale battery storage.

Coal’s Next Chapter

The story of coal is not one of simple decline, but of transformation. While some regions are reducing their reliance on coal, others are expanding its use or reinforcing strategic reserves in response to growing energy needs. Rather than collapsing, global coal consumption is stabilizing, reflecting a more nuanced and region-specific trajectory.

As energy security, affordability, and infrastructure development remain top global priorities, coal continues to play a vital and adaptive role in the energy landscape. For investors and policymakers, the key lies not just in tracking overall demand, but in understanding where and how coal is being used, and how that role is evolving in a world navigating complex energy challenges.

How May Investors Gain Exposure to Companies in the Coal Industry?

The Range Global Coal Index ETF (COAL) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Range Global Coal Index. The Index aims to track the performance of a portfolio of stocks that are involved in the met and thermal coal industry.
 

[1] Reuters. “China to Keep Building Coal Plants Through 2027.” April 14, 2025. https://www.reuters.com/sustainability/climate-energy/china-keep-building-coal-plants-through-2027-state-planner-says-2025-04-14
[2] Reuters. “China’s March Coal Imports Sink 6% as Domestic Prices Reach Four-Year Lows.” April 14, 2025. https://www.reuters.com/markets/commodities/chinas-march-coal-imports-sink-6-domestic-prices-reach-four-year-lows-2025-04-14
[3] Associated Press. “Trump Signs Executive Orders to Boost U.S. Coal Industry.” April 2025. https://apnews.com/article/693e2604785c07ff790d9afd2e06d543
[4] International Energy Agency. “Global Coal Demand Is Set to Plateau Through 2027.” April 2025. https://www.iea.org/news/global-coal-demand-is-set-to-plateau-through-2027
[5] U.S. Energy Information Administration. “Today in Energy.” April 2025. https://www.eia.gov/todayinenergy/detail.php?id=64924

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