- Coal use in power sector stood at 69.7% during July-March FY2025 period
- Lucky, Sahiwal and Bin Qasim plants planned to convert operations using domestic coal resources
According to the ministry of finance government of Pakistan report, coal is a significant source of energy and in our country power sector uses a significant share of coal for electricity generation. Indigenous coal resources are reasonably substantial and sufficient to meet Pakistan’s requirements on a long-term, sustainable basis. Domestic coal production is expected to grow in the coming years, starting with mining activity at Thar Coalfield Block-I and enlarging the existing mine at Block-II. Indigenous coal production is mainly consumed through power generation plants situated at Thar Coalfield, whereas production from other coalfields is utilized in brick kilns. Furthermore, power plants and the industrial sector consumed imported coal.
The energy sector remains a pivotal driver of Pakistan’s economic and industrial development, impacting productivity, trade competitiveness, and overall quality of life. During the first nine months of FY2025 (July- March), Pakistan continued to face challenges related to energy affordability, sustainability, and security. However, some major reforms, capacity enhancements, and shifts in the energy mix indicate gradual progress towards a more resilient and diversified energy landscape. The government statistics showed that during July-March FY 2025, the power sector’s coal consumption remained at about 69.7 percent (11,278.7 thousand tonnes), whereas, in the brick Kilns sector, it stands at 14.2 percent (2,292.3 thousand tonnes).
| Sector-Wise Consumption Of Coal In Pakistan (000 metric tones) | ||||
|---|---|---|---|---|
| Sector | FY 2024 (July-March) | Share (%) | FY 2025 (July-March) | Share (%) |
| Power | 11,906.7 | 68.9 | 11,278.7 | 69.7 |
| Brick Kilns | 1,072.3 | 6.2 | 2,292.3 | 14.2 |
| Cement/Others | 4,300 | 24.9 | 2,600.0 | 16.1 |
| Total | 17,279.0 | 16,171.0 | ||
On the other hand, the cement and other industries sector consume 16.1 percent (2,600.0 thousand tonnes). No doubt, Coal continues to play a significant role in the power sector, mainly by projects based on Thar coal. Indigenization of coal-based energy is being actively pursued, with several Thar coal-fired plants contributing to the national grid. However, environmental concerns and the need for clean technology adoption remain important policy considerations.
The Government of Pakistan remains committed to ensuring energy security, affordability, and sustainability through enhanced governance, enhanced private sector participation, and strategic investment in renewable and indigenous resources. The Integrated Generation Capacity Expansion Plan (IGCEP) and ongoing reforms under the National Electricity Policy 2021 and Alternative & Renewable Energy Policy 2019 provide the roadmap for future sectoral transformation. Different sources recorded that the Pakistani government has planned to significantly increase the use of indigenous Thar coal for power generation in a strategic move expected to decline Pakistan’s annual import bill by $2 billion. According to government officials, the first phase of this energy transition will focus on converting the 600 MW Lucky Power Plant to run on locally sourced coal.
Officials confirmed that a 120 Km railway line connecting Thar to Chor will be completed by December to facilitate coal transportation. It is said that the transition will continue in a second phase, which includes plans to convert both the Sahiwal and Bin Qasim power plants to operate using domestic coal resources. Officials noted that Lucky Power Plant’s technology was originally designed to utilize local coal specifications, while other plants presently using imported coal will require technological modifications.
On the other hand if we talk about world scenario as per the IEA’s update on the sector released, global coal demand is likely to remain broadly unchanged this year and next, despite short-term fluctuations across various key markets in the first half of 2025. The Coal Mid-Year Update shows that global coal demand grew to a new all-time high in 2024 of almost 8.8 billion tonnes, up 1.5 percent from 2023, as growing consumption in China, India, Indonesia and other emerging economies greater than offset declines in advanced economies in Europe, North America and northeast Asia. However, several of those trends reversed in the first half of 2025 as demand fell in China and India because of weaker growth in electricity consumption and strong rises in power generation from renewable sources.
By contrast, coal use increased by almost 10 percent in US as robust growth in electricity demand combined with higher natural gas prices drove up coal consumption for power generation. In the European Union, coal demand was broadly flat, with lower consumption by industry offsetting higher demand from electricity generation. Despite these short-term variations, experts note that the underlying structural drivers of the world’s coal use remain broadly unchanged. As a consequence, it forecasts a slight increase in global coal demand in 2025, followed by a marginal fall in 2026, bringing demand to just below 2024 levels.
This remains consistent with the forecast published in December in Coal 2024, the IEA’s annual coal market report, with the main changes of note since then counting downward revisions for global economic growth and the important energy policy shift in favour of coal in US. Over the whole of 2025, coal demand in China is expected to fall slightly, by less than 1 percent. In the United States, demand is forecast to grow by almost 7 percent, and in the European Union, it is set to fall by nearly 2 percent. Global coal production is expected to grow to a new record in 2025, driven by continued output growth in China and India, which rely on coal for ensuring their energy security priorities. However, experts anticipate a fall in global coal production in 2026, as high stock levels and lower prices begin to weigh on supply.