This paper examines the evolving role of coal in Malaysia’s energy system and its implications for energy security, affordability, and sustainability. Despite global trends showing a decline in coal consumption and the rapid growth of renewables, Malaysia continues to depend heavily on coal for electricity generation, accounting for over 40 percent of total power output. With limited domestic coal reserves, the country relies almost entirely on imports, mainly from Indonesia, Australia, and Russia. This dependence exposes Malaysia to external risks such as global price fluctuations, currency depreciation, and supply disruptions, all of which directly influence electricity generation costs and fiscal stability. Rising coal import prices have significantly increased generation expenses, compelling the government to maintain large energy subsidies to preserve affordable tariffs. These fiscal pressures, coupled with environmental commitments, highlight the urgent need for diversification and low-carbon transition. The study reviews Malaysia’s historical and current coal consumption trends, explores future consumption scenarios up to 2035, and evaluates policy measures under the National Energy Transition Roadmap. Findings suggest that the effectiveness of the transition depends on measurable progress in reducing coal dependency, expanding renewable energy capacity, and improving energy efficiency. Strong policy implementation, institutional coordination, and investment in grid modernization and storage technologies are essential to achieve these goals. Ultimately, Malaysia’s sustainable energy future relies on balancing energy security with environmental stewardship and economic resilience.