The "Outline of the 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China" clearly stipulates the promotion of peak coal and oil consumption. Industry experts widely acknowledge that achieving this goal presents significant challenges. So, what are the key measures that can facilitate this objective during the transition? Experts were interviewed on various aspects, including clean energy substitution, corporate economic incentives, tackling key sectors, and targeted support for resource-dependent regions.
Stable substitution with clean energy is paramount. "Coal power cannot simply be phased out; it must gradually shift from being a primary power source to a foundational, system-regulating power source. The next step is to assess whether the flexibility transformation, peak-shaving capability, frequency regulation, and reserve capacity of coal power are genuinely enhanced, not merely looking at changes in power generation," said Jiang Dalin, Director of the Energy Market Research Department at the Technology and Economics Research Institute of China Energy Investment Corporation. Chai Qimin, Director of the Strategic Planning Department at the National Center for Climate Change Strategy and International Cooperation, believes that coal power's transition to a supportive and regulating role can follow a three-step approach: "increase capacity while controlling output (present-2030), control capacity while reducing output (2030-2035), and reduce both capacity and output (2035-2060)." During this process, promoting clean energy substitution is of utmost importance. Incremental energy and power consumption during the "15th Five-Year Plan" period should primarily be met by non-fossil energy sources, vigorously developing wind, solar, hydro, nuclear power, and new energy storage to construct a new power system.
Jiang Dalin points out that the power sector accounts for the highest proportion of coal consumption. If clean power cannot stably substitute for incremental electricity demand, it will be difficult for national coal consumption to peak substantially. The next focus is integrating the large-scale development of new energy with energy storage, pumped storage, optimized grid configuration, inter-provincial mutual support, and demand-side response to truly form stable substitution capabilities. Regarding end-use substitution and electrification, Jiang Dalin cautions, "Peaking coal consumption essentially requires new energy to replace more coal. However, new energy is primarily utilized in the form of electricity, which fundamentally represents the substitution of renewable power for thermal power. Yet, much coal consumption occurs in end-use sectors like industrial boilers, kilns, and heating, especially in key coal-consuming areas such as building materials and chemicals, where coal is often directly used as a primary energy source. This makes it impossible for new energy to directly replace this type of coal. The energy utilization patterns in these industrial processes must first change; after electrification transformation, the substitution effect of new energy can be realized. Therefore, it is necessary to gradually reduce scattered coal use through methods like electric boilers, electric kilns, industrial waste heat utilization, and green power substitution."
Switching Tracks: From Fuel to Raw Material and Feedstock In recent years, within China's fossil energy consumption, a clear trend has emerged: shifting from fuel use to feedstock use. Jiang Dalin explains, "The use of coal as a raw material and feedstock essentially represents a 'track switch' for coal, transitioning it from the traditional fuel track to higher-value-added chemical feedstock and new materials tracks. Technologically and industrially, this is the deepening and extension of coal chemical engineering." It is reported that modern coal chemical engineering focuses on coal-to-liquids, coal-to-gas, coal-to-olefins, coal-to-ethylene glycol, coal-to-aromatics, etc. The use of coal as a raw material represents the industrialization of modern coal chemical technologies. China has achieved a high degree of localization in these areas, holding a globally leading position overall. Demonstration projects have seen significant reductions in comprehensive energy and water consumption, with wastewater discharge nearing zero. The use of coal as a feedstock represents a deeper extension, pointing towards coal-based new materials, including porous carbon, activated carbon, graphitized carbon, graphene, carbon nanotubes, and other refined, high-value-added products. Most of this research is currently in experimental, pilot, or demonstration stages, not yet forming large-scale production capacity, with a severe shortage of industrial application scenarios.
Jiang Dalin believes the most significant change in the process of using coal as raw material and feedstock is the shift in coal's competitors, leading to new cost and market dynamics. For instance, in the market, coal-based raw materials and feedstocks directly compete with oil-based and gas-based chemical products. When international oil prices are low, the economic viability of using coal as raw material and feedstock faces clear pressure. More importantly, there is technological competition, especially in the feedstock direction. Concurrently, China's petrochemical industry shows an increasingly evident trend of "reducing oil output while increasing chemical output." Currently, over 95% of China's gasoline consumption is for vehicles. With the development of new energy vehicles, the material and chemical properties of crude oil will gradually strengthen in the future. Bu Xiaoping from the Strategic Research Center for Oil and Gas Resources at the Ministry of Natural Resources believes the transition speed may be affected by various factors. According to industry forecasts, with the successive commissioning of integrated refining and chemical projects, the proportion of crude oil converted into chemical feedstocks is expected to increase further.
Information from the National Energy Administration indicates that in 2025, within China's fossil energy consumption, feedstock use maintained rapid growth, with its incremental volume exceeding the total incremental fossil energy consumption for the first time. Simultaneously, the consumption of fossil energy used as fuel declined for the first time. During the "14th Five-Year Plan" period, China's coal chemical and petrochemical industries developed rapidly, with feedstock use growing at an average annual rate of 13%. The annual average growth rates for products like ethylene, chemical pesticides, and primary plastics were 14%, 13.9%, and 7% respectively, aligning with the growth trend of feedstock use.
Making the Transition Economically Viable for Enterprises For enterprises, the hardest part of transition is often not technology but the economic viability. Coal power companies invest heavily in flexibility transformations; if participating in peak shaving cannot guarantee returns, it affects their motivation. Refining and chemical enterprises developing CCUS projects face challenges if carbon capture costs and emission reduction benefits are not "linked," hindering long-term stable project operation. Experts pointedly note: Only when enterprises can "make the numbers work and earn money" can the transition truly gain momentum and be sustained.
Chai Qimin suggests, from the perspective of improving the carbon market, fully utilizing market mechanisms to optimally allocate emission reduction resources, expanding covered sectors, improving quota allocation and pricing mechanisms, and activating endogenous motivation to achieve carbon peak goals on schedule with lower costs, higher efficiency, and greater flexibility. It is essential to foster a low-carbon development awareness that "emitting carbon has a cost, reducing carbon brings benefits" and enhance carbon emission management capabilities. Jiang Dalin recommends broadening the revenue scenarios for coal power's transition to a peak-shaving energy source, allowing its regulating value to be fully realized. "As a crucial supporting and regulating force in the future energy system, if coal power lacks reasonable capacity compensation, ancillary service compensation, and spot market revenue mechanisms, the enthusiasm and stability of corporate transition will be difficult to ensure." He believes the core is to健全 the pricing and market mechanisms for coal power transition, continuously improve coal power capacity pricing policies,健全 the recovery mechanism for flexibility transformation investments, clarify pricing standards for ancillary services like peak shaving, frequency regulation, and reserve capacity, helping it彻底摆脱 the traditional profit model overly reliant on power generation revenue.
Beyond establishing positive incentive mechanisms, Wu Hao, Deputy Chief Engineer at Sinopec Research Institute of Petroleum Processing Co., Ltd., suggests, "Increase policy support in energy markets,健全 the pricing formation mechanisms for green power and green hydrogen to ensure stable supply of clean energy. Simultaneously, introduce special subsidy policies to assist local governments in alleviating fiscal pressures from the exit of outdated capacity, and配套做好 the resettlement of enterprise employees." Increasing fiscal, tax, and financial support is a powerful measure widely favored by professionals. "In reality, many low-carbon transformation projects in traditional industries, although having significant emission reduction effects, often do not meet narrow green project standards, making it difficult to obtain targeted financing support," said Jiang Dalin. Wu Hao believes that special low-interest loans for petrochemical low-carbon transition should be established, and channels for issuing green bonds expanded; the fiscal and tax reduction mechanism for low-carbon projects should be improved, the CCER pricing mechanism optimized to enhance the economic benefits of corporate emission reduction.
Focusing on Key Sectors with Targeted Measures Sectors like steel, cement, and chemicals are major coal and oil consumers on the industrial side. The national level has issued special action plans for energy conservation and carbon reduction in four industries: steel, oil refining, synthetic ammonia, and cement. Jiang Dalin says, "This indicates the industrial side has entered a targeted攻坚 stage, where the key lies in whether policies and projects can truly be implemented." Low-carbon transformation in these industries faces practical challenges such as large investment scales and long investment recovery cycles. Relying solely on enterprises' own strength makes rapid progress difficult; targeted policies are needed to reduce corporate transition costs.
Experts believe multiple methods can be employed, such as special support for equipment updates, interest subsidies for technological transformation, special relending, tax incentives, etc., to倾斜支持 low-carbon transformation, oil-to-chemicals shift, and CCUS demonstration projects, injecting financial动力 for corporate transition. Simultaneously, accelerate the推广 of mature and applicable low-carbon technologies, establishing industry benchmarks for low-carbon transition. Wu Hao says, "The decarbonization path for the petrochemical industry is clear, but the road is long and arduous. It is not only a technological revolution but also a profound transformation involving the energy system, industrial ecology, and socio-economic systems." Specifically, current petrochemical industry decarbonization should be targeted. In industrial structure adjustment, strictly control新增炼化 capacity, accelerate the淘汰 of落后产能 below 2 million tons/year, and optimize overall industry capacity布局. In production process energy conservation, improve refining and chemical plant energy efficiency,推广 advanced technologies like steam power system energy savings based on advanced numerical planning methods, heat exchanger network optimization, deep waste heat recovery, etc., to深挖 plant energy-saving potential. In energy use structure optimization, promote electrification substitution, large-scale application of green power, green hydrogen, and nuclear energy, adopt electric heating furnaces and industrial heat pumps to replace traditional oil and coal heating, reducing carbon emissions from the energy source. In end-of-pipe treatment and recycling,布局 large-scale CCUS projects, simultaneously conduct chemical recycling of waste plastics and resource utilization of refining and chemical solid waste,构建 industry circular economy systems.
Chai Qimin believes that钢铁、建材等高耗能行业新增或改扩建项目 should implement carbon emission equivalent or reduction substitution,推动其率先实施碳排放总量管控,推动石化化工、煤电等行业节能降碳改造,持续推进交通、建筑和工业电气化. In technological substitution,关键突破 must be made in advanced energy storage, green hydrogen/ammonia/alcohols, CCUS, industrial low-carbon process re-engineering, and other key technologies, using technological innovation to support deep substitution. Driven by policy incentives and market innovation, "green petroleum" represented by green hydrogen/ammonia/alcohols有望在 the "15th Five-Year Plan" period率先破局.
How difficult is the practical implementation of these measures? Experts indicate the "implementation难度中等偏上". Wu Hao analyzes that on one hand, long-standing structural contradictions in industry capacity are prominent, with overall refining and chemical capacity utilization around only 70%, coexisting problems of低端产能过剩 and高端化工品短缺. The exit of落后产能 involves local fiscal and tax issues and personnel resettlement, facing significant推进阻力. On the other hand, bottlenecks remain in core low-carbon technologies; costs for technologies like green hydrogen production and electrification are relatively high, with insufficient large-scale commercial application. Additionally, traditional refining and chemical plant construction cycles are long, with substantial existing assets. Low-carbon transformation requires high investment, carrying certain risks of stranded fixed assets, creating considerable short-term operational pressure for enterprises in transition.
Transition Mechanism Design Must Solve Practical Problems Experts believe that after coal and oil consumption peak, related industries in resource-dependent regions will not immediately萎缩 but will face pressures of slowing growth, profit revaluation, and structural adjustment. The key is提前布局接续产业和新赛道,推动从 "挖煤卖油"向新能源装备、储能、现代煤化工高端化、综合能源服务等方向延伸,避免在全国煤炭和石油消费见顶后陷入被动调整的局面. In Chai Qimin's view, for industries and regions significantly affected by coal and oil consumption peak goals, transition mechanism design must solve practical problems. First, adhere to differentiated,梯次退出, avoiding "一刀切", with eastern regions优先减量 and central-western regions有序转型. Second, provide转型保障兜底, establishing national and local low-carbon transition special funds for employee resettlement, ecological restoration, and capacity exit compensation. Third, ensure能源安全托底, retaining煤电调节容量,完善产供储销体系. Fourth, promote市场化利益共享,推动资源型地区从化石能源基地变成传统能源和新型能源优化组合的基地,把资源优势转化为绿色发展优势.
He believes the core of the transition mechanism is "不让转型者吃亏、不让落后者掉队", using systems to provide a safety net, markets to incentivize, and industries to generate造血,把握此消彼长的节奏,实现平稳 "软着陆". Particularly, it is necessary to推动受转型影响地区的经济多元化, for example, in the "煤炭三角区"重点布局新能源制造、新材料、AI算力、生态文旅等替代产业,同时推进传统能源与新能源融合发展. In the orderly退出 of部分过剩或低效的高耗能、高排放产能,应配套转型金融、容量电价、资产处置等公正转型政策,避免 "一退了之". Jiang Dalin suggests issuing targeted transition support policies for resource-dependent regions, covering industrial接续, employment training, major project布局, fiscal and tax接续, etc., to保障区域平稳过渡,避免因转型引发各类社会问题.
Experts特别强调 that situations vary greatly across industries and regions; a "一刀切" approach is not feasible. Coal in Shanxi is different from coal in Inner Mongolia; integrated refining and chemical enterprises differ from纯燃料型炼厂. It is essential to ascertain the真实底数 of coal and oil consumption in each region and industry,结合能源禀赋、产业结构和发展阶段,制定差异化的达峰目标和路径,还要为极端天气、能源供应紧张等情景留好预案. Peaking is a process, not a "one-off deal" – transitioning too hastily容易翻车, transitioning too slowly赶不上趟; the key is把握好节奏,走稳、走实.
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