For much of the 21st century, the global climate debate followed a familiar and often accusatory script. As Western economies reduced their reliance on coal and expanded renewable energy, global emissions continued to rise, with India and China frequently portrayed as the immovable obstacles—nations “locked into coal” to sustain rapid economic growth. That narrative fractured in 2025.
In a development with far-reaching implications for the global energy system, coal-fired power generation declined simultaneously in both India and China for the first time in more than five decades. According to analysis by the Centre for Research on Energy and Clean Air (CREA) and Carbon Brief, India’s coal-based power generation fell by 3 per cent in 2025, while China recorded a decline of 1.6 per cent. The last comparable moment was in 1973, when coal use dipped amid a global oil crisis rather than as a consequence of a planned energy transition.
This time, the drivers are fundamentally different.
A structural shift, not a statistical anomaly
The 2025 decline is widely viewed by energy analysts as evidence of a “structural peak” in coal demand rather than a temporary fluctuation. For decades, the prevailing assumption was that renewable energy could only supplement coal in fast-growing economies, never displace it. That assumption no longer holds.
Across both countries, the expansion of solar, wind, hydro and nuclear power outpaced growth in electricity demand. Clean energy additions were not merely absorbed into the system; they actively pushed coal plants down the dispatch order, reducing operating hours and total output.
India’s transition was particularly striking. The country added a record 49 gigawatts of non-fossil fuel capacity in a single year, lifting total non-fossil capacity to nearly 267 GW. Union Minister for Coal and New & Renewable Energy Pralhad Joshi noted that non-fossil sources registered a 22.6 per cent increase over 2024 levels. Combined with relatively mild weather and a modest cooling of power demand, the result was unprecedented: coal plants were scaled back because they were no longer required to meet peak loads.
Redefining growth and climate responsibility
The implications extend far beyond national energy statistics. India and China together account for the bulk of global coal consumption and have driven much of the increase in emissions over the past decade. Their simultaneous coal decline disrupts one of the most persistent fault lines in international climate negotiations—the idea that economic growth in developing countries must inevitably come at the cost of higher emissions.
India’s experience in 2025 challenges the long-standing “growth versus green” binary. The country maintained economic momentum while bending its emissions trajectory, offering a practical model for other developing economies. For much of the Global South, climate action has been framed as a constraint imposed by richer nations. The Indian case suggests it can instead be an opportunity for energy security, industrial innovation and long-term cost stability.
A possible global emissions peak
The scale of the shift becomes clearer when viewed in global context. Between 2015 and 2024, the power sectors of India and China accounted for an estimated 93 per cent of the increase in global carbon dioxide emissions. If coal use in both countries has genuinely plateaued, the long-anticipated global emissions peak may no longer be a theoretical projection—it may already be unfolding.
Such a development would have profound implications for international climate goals. The Paris Agreement targets, widely regarded as slipping out of reach in recent years, gain renewed credibility if the world’s two largest emitters have begun to decouple economic growth from fossil fuel consumption.
Energy transition as geopolitics
India’s coal reduction also reflects a strategic calculation that goes beyond climate concerns. The government’s target of achieving 500 GW of non-fossil energy capacity by 2030 is closely linked to energy sovereignty. By cutting coal generation by 3 per cent in a single year, India has reduced its exposure to volatile global commodity markets and import shocks.
As the world’s third-largest energy consumer, India’s pivot carries consequences for international coal markets. A sustained decline in demand from major buyers could accelerate the global transition by lowering investment risks and signalling to smaller economies that a coal-heavy pathway is increasingly untenable.
A fragile but credible turning point
Despite the historic nature of the 2025 data, caution remains warranted. Both India and China continue to permit new coal-fired power plants, primarily as insurance against grid instability and extreme demand spikes. Turning a one-year decline into a permanent trend will require more than capacity additions. It will demand large-scale investment in battery storage, grid modernisation and flexible power markets capable of integrating high shares of variable renewable energy.
Yet the conditions for a sustained shift are now firmly in place. As CREA analysts have noted, the “preconditions for peaking” coal demand—rapid clean energy growth, slowing demand increases and policy alignment—have converged for the first time in modern history.
The simultaneous coal decline in India and China marks more than a symbolic milestone. It signals the early stages of what may become a “great decoupling,” where economic prosperity is finally separated from the smokestack. In a world confronting escalating climate risks, that shift represents not just progress—but a rare moment of cautious optimism.
