With coal surge, China puts energy security and growth before climate

Chinese leaders pledged ahead of climate negotiations in Glasgow, Scotland, last November to peak national emissions before 2030 and stop building coal power plants abroad.

A study published Friday indicates that at least 18 new coal plant projects abroad will probably go ahead despite the pledge. At home, power shortages and fears of energy insecurity, worsened by turmoil in international fossil fuel markets from Russia’s war on Ukraine, have renewed convictions that China’s rich coal reserves must remain the country’s main energy source in the near-term.

China already consumes and produces about half the world’s coal and continued expansion of output and capacity make achieving its climate goals look ever more remote.

On Wednesday, Premier Li Keqiang confirmed a goal of 300 million tons of new coal production capacity in 2022, up from 220 million tons added last year. In March, Chinese miners dug out more coal per day than ever before. Earlier this month, the government of Ordos city, a coal-extraction powerhouse in Inner Mongolia, approved plans to tap a 2 billion-ton coal-reserve spread across 65 square miles (168 square km) with expected output of 15 million tons per year.

Chinese companies have this year been contracted to build or supply parts to two coal power plants in Indonesia that are connected to industrial parks included in Chinese President Xi Jinping’s signature “Belt and Road” initiative to build infrastructure, trade ties and influence across Eurasia.

Xi’s announcement that China would stop building coal power plants overseas was among the most dramatic pledges to emerge from international negotiations ahead of the summit. It came after he had already pledged to “phase down” domestic coal production after 2025 as well as announced plans to peak the country’s carbon dioxide emissions before 2030 and reach carbon neutrality by 2060.

The Chinese government plans to meet those targets through a world-leading build out of renewable energy sources as well as more nuclear power plants. The rocky expanse of the Gobi Desert is set to become home to an additional 455 gigawatts of wind turbines and solar panels — more than double the total current capacity of the United States — by 2030.

At the level of individual power plants, the continued investment in new coal generators is difficult to understand, given profitability across the sector is declining and analysis suggests that new investments are likely to become “stranded assets” unable to recoup their investments.

The nature of China’s political economy — where the government often owns not just the power plant but the construction company that builds it, the mining company that supplies the coal and the purchaser of the power — helps explain the decision to keep building, said Philippe Benoit from Columbia University’s Center on Global Energy Policy.

Part of what makes the decision to leave coal behind so difficult is the legacy of the Chinese coal industry, which has powered the country’s meteoric economic rise.

The fundamental issue determining the speed of China’s coal phase down is the government’s approach to spurring growth and its ability to move away from smokestack industries, said Jorrit Gosens, a scholar at Australian National University, lead author of the paper.

As long as China relies on stimulating its economy through construction and other carbon-intensive energy, renewable energy will never be enough, even if its use surpasses stated targets. “That very big expansion of wind and solar doesn’t ensure a reduction in coal-fired power,” Gosens said.

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