Coal prices are climbing toward four-month highs as India and China signal multidecade reliance on coal-fired power. India plans an 87% expansion in capacity through 2047, while China delays its previously expected coal phaseout. Despite the long-term global decarbonization push, market dynamics reveal sustained demand in Asia and renewed dependence in parts of Europe amid volatile electricity markets. The divergence raises questions about whether coal is entering a temporary price rebound or a structurally supported demand cycle.

Reports that India intends to dramatically expand coal-fired power generation through at least 2047 have pushed coal prices toward $110 per ton, reinforcing the view that Asia’s two largest economies—India and China—remain firmly committed to coal as a stabilizing energy source. The shift comes despite global net-zero ambitions and increasing pressure on emerging markets to curb emissions. Instead, energy security concerns, population growth and accelerating power demand from data centers are reshaping coal’s medium-term outlook.

India’s Long-Term Energy Strategy Revives Coal Demand

India’s newly outlined plan to reach 420 gigawatts of coal-fired capacity by 2047—an almost 87% expansion—marks one of the most ambitious coal investment trajectories globally. The move aligns with Prime Minister Narendra Modi’s pledge to transform the country into a developed economy by 2047 and achieve energy independence, a goal that hinges on securing firm baseload power.

While India is rapidly deploying solar and wind energy, policymakers argue that intermittent renewables cannot yet meet the country’s surging industrial and digital power needs. Data center growth, electrification of transport and rising household consumption have stretched grid reliability, prompting a strategic return to coal to ensure system stability. India’s position also reflects reluctance to rely on expensive imported gas, which has become more volatile due to geopolitical disruptions.

China Extends its Coal Horizon as Energy Reliability Concerns Grow

China, which accounts for more than half of global coal consumption, is also signaling a slower transition away from coal. Recent policy updates show Beijing pushing peak coal demand toward 2030 while quietly approving new coal capacity to stabilize regional grids. This marks a soft reversal from earlier expectations that China would begin phasing out coal more swiftly during the 2020s.

The country’s strategic shift is tied to recurring power shortages, industrial output demands and the energy-intensive infrastructure required to support artificial intelligence and advanced manufacturing. Coal remains Beijing’s most reliable fallback option, even as it expands renewables at record speed.

Market Pricing Reflects Short-Term Volatility, Not Yet a Structural Rally

Despite the policy momentum, coal prices remain below last year’s levels. Coal futures slipped to $108.75 per ton on December 11, down 0.59% on the day and 18.23% lower year-over-year. Markets continue to digest the broader slowdown in global industrial activity and softer European demand, even as supply-demand balances tighten in Asia.

Historical data show coal’s extreme volatility: prices peaked at $457.80 in September 2022 during the global energy shock but have since stabilized. Whether coal revisits higher ranges will depend on weather conditions, global gas prices and the pace of renewable infrastructure build-out across developing economies.

Looking Ahead

If India and China commit fully to the timelines outlined this year, coal may enjoy stronger-than-expected demand through the 2030s. Yet long-term structural risks remain, including carbon pricing, regulatory barriers and global financing constraints. Investors are watching closely to determine whether today’s price rebound signals a sustained demand cycle or a temporary stabilization before a renewed global decline.