The National Development and Reform Commission (NDRC) and the National Energy Administration have recently jointly issued the 15th Five-Year Plan for the Development of the Coal Industry (hereinafter referred to as the Plan). It clarifies that by 2030, coal’s capacity to underpin energy security will be further strengthened; the output capacity share of large modern coal mines nationwide will rise to 87%, and that of intelligent coal mines to 75%. Coal consumption will peak, and a modern coal industrial system will be basically established. Released at a critical window period when China’s coal consumption is set to peak, the Plan constitutes a systematic arrangement for high-quality development of the coal sector.

Coordinating energy security and green transition and centering on building a modern coal industrial system, the Plan lays out key tasks covering nine areas.

In terms of spatial layout and industrial structure, the Plan proposes consolidating and optimizing the stepped development pattern spanning eastern, central and western regions. It calls for the orderly construction of replacement production capacity, higher access thresholds for resource exploitation, vigorous development of high-quality advanced capacity, phasing out backward and inefficient capacity, and steady and prudent advancement of deep resource mining.

Regarding the development of the production, supply, reserve and sales system, efforts will continue to stabilize coal output and supply, optimize and improve the coal transportation system, accelerate the development of reserve capacity, and strengthen emergency support capabilities.

Intelligent transformation and green low-carbon transition represent the core priorities of the Plan. It stipulates that intelligent development shall be advanced in an in-depth manner by category and tier, the scenario-based application of artificial intelligence shall be accelerated, and the operational efficiency of intelligent coal mines shall be improved. Meanwhile, green mining standards will be elevated, energy conservation and carbon reduction across the whole industrial chain will be reinforced, large-scale exploitation and utilization of coalbed methane will be promoted, and integrated development of coal and new energy will be fostered. For clean and efficient utilization, the Plan encourages clean substitution of coal, significantly improves commercial coal quality, speeds up the transformation and upgrading of coal-fired power, and expands the use of coal as raw materials in an orderly fashion.

Guo Sheng, Secretary of the Board of Directors of Ordos Resources Co., Ltd., told reporters from the Shanghai Securities News that the Plan prioritizes accelerating the green low-carbon transition of the coal sector and advancing integrated development of coal and new energy. This aligns closely with the company’s long-standing development strategy of “technology plus green development”, and further strengthens the enterprise’s confidence in advancing the transformation and upgrading of the traditional energy industry.

On advancing modernization of industrial governance, the Plan takes deepening corporate reform and development as an important task. It proposes continuous development of a modern coal market, improvement of the industrial governance system, promotion of reform and growth among coal enterprises, and active international exchanges and cooperation. Targeted at the sector’s characteristics featuring a high proportion of state-owned enterprises that shoulder critical supply guarantee responsibilities, these arrangements aim to unlock internal impetus, enhance core competitiveness through further reforms, and drive quality and efficiency improvements amid the industry’s transformation.

Talking about the role of reform for state-owned assets and state-owned enterprises, Wu Yin, Professor at Southwestern University of Finance and Economics, told reporters that central and local state-owned enterprises dominate the coal industry in both quantity and scale. They serve as the main force for ensuring energy supply as well as leading the energy transition. “The core of deepening reform is to enable state-owned enterprises to gain stronger market adaptability and innovation capacity while securing the bottom line of energy supply. They need to function both as a stabilizing ballast and a dynamic vanguard.”

Wu Yin suggested that leading enterprises should accelerate the shift from “coal producers” to “comprehensive energy service providers”. Leveraging resources in mining areas, they can develop new energy and energy storage businesses and explore integrated operation models combining coal power and new energy. Small and medium-sized enterprises ought to focus on niche sectors and pursue specialized and distinctive development paths. Enterprises need to identify their positioning within the new energy system, taking proactive steps to shape the future rather than passively awaiting the peak in coal consumption.

Scientific and technological innovation as well as work safety are highlighted as key priorities. The Plan calls for strengthened applied basic research in the industry, R&D and deployment of advanced technologies and equipment, and refinement of the coal industry’s scientific and technological innovation system. It also requires consolidating the foundation of coal mine safety production, intensifying prevention and control of major mine disasters, and enhancing occupational health protection for mine workers.

The Plan also launches five major projects: development of coal supply security bases, iterative upgrading of intelligent coal mines, integrated development of coal and new energy, improvement of commercial coal quality, and innovation in coal technologies and equipment. It introduces multiple major policies and reform measures, including strengthened overall planning and management of coal mining areas, unified inventory administration of production capacity, improvement of coal industry standards, and refined policies for regulating coal prices within reasonable ranges.

An annex to the Plan sets targets of 26 billion cubic meters of coalbed methane output and 6.5 billion cubic meters of gas utilization by 2030. It identifies four key directions: exploration and development of coalbed methane, extraction and utilization of coal mine gas, industrial technological innovation, and construction of external transmission pipelines. The Plan aims to stabilize and boost output in the Qinshui Basin, rapidly ramp up production in the eastern Ordos Basin, and advance industrial development in Xinjiang. It also promotes coordinated construction of regional coalbed methane pipeline networks to connect with the nationwide natural gas pipeline network.

Source: Shanghai Securities News