China Increases Coal Use in Chemical Production

China is expanding coal-to-chemicals and coal-to-gas facilities as high oil and gas prices make coal a lower-cost domestic feedstock. Coal production in China fell during the first four months of 2026, and imports also declined, according to recently released government data. Power generation from coal continued a downward trend that began in 2025.

The same data indicate that total coal consumption has not decreased. Instead, more coal is being directed toward chemical manufacturing, especially fertilizers, rather than power generation or metals production. com reported that the Middle East energy supply disruption has raised gas prices and reduced availability, prompting greater reliance on coal for non-power uses.

India has announced plans to adopt a similar approach, directing billions of dollars toward coal-based production of fertilizers, plastics, and other chemicals to lower dependence on imported energy. The shift shows that energy security and cost considerations are taking precedence over emission reduction targets in both countries.