Health and environmental costs of coal consumption in China have been significantly overlooked, calling for a review on the total costs of the use of China's most important energy sources, according to a study released on Tuesday.

A report by Tsinghua University's Institute of Energy, Environment and Economy and the Natural Resources Defense Council said that direct combustion of coal led to about 31 percent of pollution in 2012 caused by PM2.5, particles of 2.5 microns or less.

Indirect PM2.5 pollution generated by coal-fired power plants and boilers, among other industries, contributed to about 63 percent, the study found.

Teng Fei, associate professor at Tsinghua University's Institute of Energy, Environment and Economy and lead author of the report, said increased coal consumption and the unreasonable use of this fuel have led to high levels of PM2.5 and more smoggy days.

Exposure to PM2.5 can lead to respiratory diseases and a greater risk of cancer.

Teng said the environmental and public health costs of using coal have been significantly overlooked in the coal-pricing mechanism.

Environmental taxes on coal need to be raised by five to tenfold to reflect the real costs of burning it, Teng suggested.

Zhou Fengqi, former director of the Energy Research Institute under the National Development and Reform Commission which is in charge of drafting and supervision of China's energy policies, said he expects the government to levy carbon taxes and environmental taxes, but these won't be very high initially.

Coal's dominant role in the energy mix is unlikely to continue and its consumption will gradually fall, but this will take time, he said.

The China National Coal Association said that the country's coal consumption totaled 3.03 billion metric tons, a drop of 1.2 percent year-on-year in Q1-Q3 and the coal production declined to 2.85 billion tons, according to the Xinhua News Agency.

Nevertheless, the central government has pledged to tackle overcapacity.

The National Energy Administration announced on Oct 28 that new coal mining projects will not be approved in east China, new coal mines with annual output of less than 300,000 tonnes and 900,000 tonnes for coal and gas outburst mines respectively are forbidden anywhere in China.