Since then, China – the world’s current largest emitter of carbon dioxide (CO2) – has seen an intense push to increase the production and supply of coal, its main energy source.
The nation’s daily output from coal mining has set “record highs” multiple times in recent months due to boosts in production capacity. The coal stock at coal-fired power plants has been kept at “historically high levels”.
Administratively, at least five new major coal-fired power projects were approved for construction in the first six weeks of the year and three “billion-dollar” coal mine projects were greenlighted in February.
In terms of policy, China’s top administrative organ announced in mid-February that coal supply “will be increased” and coal power plants “will be supported” to run “at full capacity” to meet electricity demand.
Furthermore, during this year’s “two sessions” – a series of important political meetings that take place in Beijing every spring – China’s president Xi Jinping reinforced the direction that coal would be the “mainstay” of the nation’s energy mix. Xi instructed that, based on China’s “national reality”, coal’s role “would be hard to change in the short term”.
The recently published 14th five-year plan (FYP) for the energy sector has also stressed coal’s role in “ensuring the basic energy needs” and highlighted coal power’s importance in supporting the power system.
The all-encompassing push for coal comes more than a year after Xi pledged that the nation would peak its carbon emissions “before 2030” and achieve carbon neutrality “before 2060” at the UN general assembly in September 2020.
What triggered China’s recent policy on coal? Why does the nation still rely on it? And, most importantly, what does the coal push mean for Beijing’s “dual-carbon goals”?
Carbon Brief has spoken to a wide range of experts to understand these issues.
Most experts agree that the ramp-up of coal is a short-term policy adjustment and does not represent a “walk back” by China on its long-term climate commitments.
However, they have different views on how the move might – or might not – affect the level of CO2 at which China will peak, which, in turn, will directly affect its carbon neutrality agenda, as well as global climate efforts.
Why does China use coal?
Coal is widely used in China for generating electricity, despite the country’s rapid growth of renewable energy in recent years.
According to China’s National Bureau of Statistics, coal accounted for 56 per cent of the country’s total energy consumption in 2021. The ratio signifies a continuous decline from more than 70 per cent in the mid-2000s. Nevertheless, the absolute level of China’s coal use has continued to rise.
China is also home to the world’s largest fleet of coal-fired power plants, making up around 50 per cent of the operating capacity globally. A global coal map produced by Carbon Brief shows the high concentration of coal power plants in China.
However, to understand Chinese policymakers’ approach to coal, one needs to look beyond these figures and understand a bigger picture about China, such as its history, economic growth and politics, experts have told Carbon Brief.
To start with, China has abundant coal reserves. As President Xi has put it, the country is “rich in coal, poor in oil and low in gas (富煤贫油少气)”.
Boasting the world’s fourth largest coal reserves – after the US, Russia and Australia – China produces around 90 per cent of the coal it consumes. (In comparison, it imports around 70 per cent and 50 per cent of the oil and gas it needs, respectively.)
“Resource endowment is a very important reason why China uses so much coal,” Dr Xie Chunping, policy fellow at the Grantham Research Institute on Climate Change and the Environment in London, tells Carbon Brief. She says:
“China’s resource endowment means that coal is low in cost and only by using a low-cost fuel can a country support its economic growth, especially in the initial stages.”
(Dr Xie recently analysed whether China is living up to its climate pledges in her guest post for Carbon Brief.)
Over the past 40 years, China has seen an economic boom, with its annual GDP growth averaging 9.5 per cent. As a cost-competitive source of energy, coal has propelled the transformation, according to Yu Aiqun, China researcher with Global Energy Monitor.
Yu tells Carbon Brief that coal in itself “is cheap”, barring its social and environmental costs. Since China opened its doors to the world in the late 1970s, cheap energy – along with cheap land and cheap labour – has boosted China’s economic competitiveness globally, allowing it to be the “factory of the world”, Yu notes.
Dr Guo Li – research associate of the Lau China Institute at King’s College London – shares similar opinions. She tells Carbon Brief that coal is “extremely important to China” because the country is still in the process of industrialisation. She explains:
“Manufacturing has always been the backbone of the Chinese economy. In addition, in more recent years, China has also seen large-scale, rapid infrastructure construction. Therefore, it must rely on a source of energy that is cheaply available and can be managed easily on the technical front.”
Dr Guo says that it is difficult for China to kick its coal habit because the scale of its economy is “so big” and, for a long time, it depended on this single form of energy. But she also highlights China’s “very astonishing portfolio” in renewable energy. To Dr Guo, this shows that “no matter how important coal is, China is indeed trying to lessen its reliance on it”.
(China’s installed solar and wind energy capacity now accounts for 35-40 per cent of the global total. According to the International Energy Agency, China is expected to reach 1,200 gigawatts of total wind and solar capacity in 2026 – four years earlier than its current target of 2030.)
Due to its close ties with the economy, coal has been embedded deeply into the country’s social and economic structure, especially its energy system. For example, China’s power grid has been built to solely accommodate coal power, says China-based Dr Kevin Mo, who describes coal as “China’s most dependable energy resource”.
Dr Mo is principal at innovative Green Development Program (iGDP), a consultancy focusing on green and low-carbon development in Beijing. He explains coal’s importance to China’s power grid to Carbon Brief:
“The whole grid’s transmission, distribution and operation logic all centre around coal power. If the grid is to cater to renewable energy, the transmission, for example, would need to be completely different. That is why the transition of the energy system would not be that fast.”
Geopolitics is also “very important” for China’s policymaking on coal and energy security, Dr Mo notes, “because energy security is also a matter of national security”.
Dr Mo says that because China has its own coal but depends highly on imports for oil and gas, policymakers need to ensure that, if the worst comes to the worst, the country’s basic social and economic activities would still be able to run on coal power. Therefore, they need to make sure that the country has sufficient mining and production capacity while also trying to develop renewable energy.
History plays a role in shaping China’s mindset on coal, too, according to Yu of Global Energy Monitor. She says that the Chinese authority has a “deep-rooted fear” of being isolated from the world due to its memories of being sanctioned – something that explains its emphasis of being “self-sufficient”.
Yu says that for a long time after China’s Communist Party took over the country in 1949, the party faced simultaneous supply and technical restrictions from the US and the ex-Soviet Union due to a mix of issues and the experience taught it that it must rely on itself for key supplies. She adds:
“These experiences of being isolated have been ingrained in the authority’s memories. Therefore, China has and is still depending on coal because it would not need to ask other people for it.”
Yu stresses that, for China, energy security is the “cornerstone” of ensuring economic development and political stability. From this perspective, to the Chinese authority, “nothing is more important than maintaining political and social stability”, she says.
(These memories are also why China has “such high enthusiasm” for renewable energy while carrying on using coal, according to Yu. She explains that, apart from the fact that China has abundant renewable resources which could offer the country an opportunity to phase out coal, developing renewable energy means that “China would be able to take a technological vantage point and, eventually, have the right to speak on the world stage”.)
Although some high-profile climate diplomats – such as US climate envoy John Kerry and COP26 president Alok Sharma – have called on China to move away from coal faster, policy advisors to the Chinese government have expressed very different views on the fuel, which can prove controversial to many.
Speaking recently on CCTV, China’s state broadcaster, Prof Du said that people should recognise the “contribution” coal had made to “environmental protection”. He said that, in history, the prevailing use of coal to provide energy was the reason mankind stopped cutting down forests.
Prof Du explained to the audience coal’s “great merit” in history – especially in “boosting” human productivity – before acknowledging the necessity to cut coal consumption, calling the action “progress”. In explaining China’s energy policy, Prof Du said:
“Right now, we must first use coal well. [We must] use coal cleanly and efficiently while reducing carbon emissions safely. In the meantime, [we must] also develop new energy well and let it grow.”
While juggling between its climate targets and coal policy, China also needs to consider its citizens’ livelihood and wellbeing, as well as the nation’s social and economic situations, according to other Chinese government advisers.
“Tomorrow China could get rid of all the coal [consumption], but what about heating, right? What about the workers? Besides, our coal power fleet has only been running for an average of a dozen years. If they are all shut down, who will pay for the stranded cost?…We need to have a good pathway for coal exit and that is why we say that we have to promote [such work] in an orderly manner.”
Chinese energy researcher Dr Zhu Tong told state TV that coal is the “staple” of China’s energy system. Therefore, reducing coal consumption would have a “completely different” economic effect on China compared to Europe, whose main energy sources are oil and gas.
Dr Zhu is the director of the energy economic research office at the Institute of Industrial Economics of the Chinese Academy of Social Sciences. According to his online profile, his proposals on energy policy and industry strategies have been “responded to” by the nation’s leaders “many times”.
Dr Zhu told CCTV – in the same programme that featured Prof Du – that China’s current priority is to stabilise its economy, which calls for the stabilisation of the manufacturing industry. He said:
“We must recognise clearly that China’s economic status in the world today is mostly earned by its manufacturing industry. Therefore, the economy would not be stable without the stability of the industry.
Economic growth means that energy consumption will also grow stably…In the current phase, the urgency of reducing carbon must take into consideration its feasibility on the ground. We must guarantee the reasonable energy demand and growth of traditional industries. We must ensure industrial growth while phasing out fossil fuels.”
How has China boosted coal production recently?
China experienced two waves of electricity shortages last year.
The first occurred in May and hit five provinces in southern China, including Guangdong, which is known for its manufacturing industry. China’s state news agency Xinhua reported at the time that Guangdong’s power grid operator had had to ration the electricity for businesses to tackle “record-breaking” power consumption caused by factors including hot weather and a post-pandemic economic rebound.
But alarm bells did not ring – at least not loudly enough – until a more severe wave of power shortages broke out in August. Electricity rationing spread from southern China to around two-thirds of the nation and from factories to families. (Carbon Brief assessed the causes of the power shortages last October.)
The “energy crisis” – as described by some publications – was met with swift actions from China’s leadership. It took a series of steps to achieve three goals: emphasising the role of coal, boosting its production and stabilising its prices.
The first signal came from Xi in late September when he was inspecting a factory in one of China’s largest coal-producing regions. Xi described coal as the country’s “main [source of] energy”, signalling the fuel’s key position. (Notably, this speech came six days before Xi announced that the country “will not build new coal-fired power projects abroad” at the UN General Assembly.)
Almost immediately, authorities in major coal-producing regions – including Shanxi, Shaanxi and Inner Mongolia – ordered more than 150 “qualified” coal mines to “release advanced production capacity”, which amounted to 220m tonnes a year, Xinhua reported. The state energy regulator, the National Energy Administration, also sent teams to various parts of the country to “supervise” and “guide” local companies to “solidly implement” the measures of boosting coal production and supply, according to China Power News Network, a state-approved media outlet.
Xi made another speech in late October, underscoring the importance of energy self-reliance. He said that the country “must hold the energy food bowl in its own hands”. (Carbon Brief’s China Briefing interpreted this quote of Xi last year.)
Days later, at COP26 in Glasgow, China said that it would “phase down coal consumption” during the 15th five-year plan (FYP) from 2026 to 2030 and “make best efforts to accelerate this work” in the US-China joint declaration released during the climate summit. It also pushed for the wording of “phasing down” – rather than “phasing out” – of coal in the final “Glasgow Climate Pact”.
By the end of last December, it had become clear that coal would remain China’s dominant source of energy for the time being.
At the year-end economic planning meeting – which set key economic goals for the nation for 2022 – the central government underlined the role of fossil fuels, saying that “traditional energy” should “exit gradually” on the basis of “safe and reliable new energy”. (This order echoed Xi’s previous instruction of “establishing before breaking”, which Carbon Brief explained last August.)
The meeting also repeated Xi’s previous line of coal being the country’s “main [source of] energy” and pointed to the concept of “clean and efficient utilisation of coal”.
The government-led production drive saw a quick result.
China’s coal production “hit record highs” in both December and across the whole of 2021, according to Reuters. In early January, Xinhua reported that China’s efforts to ensure the supply of coal power had achieved “phased” success. The state news agency described coal as the “ballast stone” of secure and stable energy supply – a metaphor that had been used by the head of the state energy regulator in December. (Coal has also been called “the foundation” and “the last barrier” of the energy system by Chinese officials and state media.)
Then came a sudden rush of approvals for new coal-fired power projects. During the first six weeks of 2022, five new coal power projects with a combined capacity of 7.3 gigawatts (GW) were approved, according to a recent briefing jointly published by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM). The news came after such permissions had been “essentially frozen in 2021”, the report noted.
In February, the state economic planner also approved three “billion-dollar” coal mine projects in the country’s coal belt, which “will require a total investment of 24.1bn yuan ($3.8bn) and produce 19m tonnes of coal a year”, according to Bloomberg.
Despite a major national holiday, the Lunar New Year, coal mines around the country endeavoured to increase their production in the beginning of this year. In January and February, the country’s coal production registered a 10.3 per cent year-on-year jump, reaching 690m tonnes, according to China’s National Bureau of Statistics. Reuters reported that the rise followed Beijing’s campaign to “ramp up production for the winter heating season”.
Across last year, China produced 4.1bn tonnes of raw coal, increasing by 5.7 per cent year-on-year, the official annual statistical report said. The report also noted that China’s coal consumption went up by 4.6 per cent in 2021.
Calculations done by Dr Yang Muyi – senior electricity policy analyst of Asia at Ember, an independent climate and energy thinktank – show that China’s coal consumption reached a “record high” of 2.93bn tonnes of standard coal (tce) last year. (Dr Yang has recently explained the causes behind the surge in Carbon Brief’s China Briefing.)
Nevertheless, China’s coal consumption has remained relatively flat over the past decade, as the chart below shows.
The chart displays the consumption in two different units, tce (which is an energy measurement) and tonne (which is a weight measurement). The tce figures are calculated based on the proportion of coal consumption in the total energy consumption, released by the China statistical yearbooks. The tonne figures are released directly by the yearbooks. The Chinese authorities have not released the tonne figure for 2020 or 2021.
In March, the position of coal – along with the significance of energy security – was cemented at the “two sessions” when government officials and political advisors convened in Beijing to review the country’s performance in 2021 and draw goals for 2022. (See the significance of the “two sessions” in this Carbon Brief Q&A.)
During the meetings, Xi stated that the “reality of coal being the mainstay of the energy mix will not change in the short term”, while the annual government work report listed the “clean and efficient utilisation of coal” as a task for 2022.
Also at the “two sessions”, the state economic planner set the daily coal production target at “more than 12m tonnes” while its deputy director said the “focus” of its work for the year was to “ensure coal supply and stabilise coal prices”. (China Briefing recently analysed this year’s “two sessions”.)
In the latest development, China’s 14FYP plan (2021-2025) for the energy sector – a highly anticipated industry roadmap for the next five years – was published on 22 March, further sealing coal’s role in the country’s future power system.
The document instructs all central government organs and regional governments to “enhance” coal’s role in “ensuring the basic needs” of energy security, “give full play” to coal power’s role of being a “supporting” and “flexible” energy source, and “vigorously promote” the “clean and efficient” use of coal.
Also on 22 March, China’s vice premier Han Zheng – who leads China’s leaders group for “dual-carbon” work – convened a high-level meeting dedicated to coal, reported Xinhua. Han ordered leaders of “relevant” government agencies and companies to “deeply understand” that promoting the “clean and efficient” use of coal is a “vital path” to achieving carbon peaking and carbon neutrality, according to Xinhua.
Neither the 14FYP for energy nor Han explained what “clean and efficient” use of coal means exactly. According to Dr Ryna Cui – assistant research professor and co-director for the China Program at the Center for Global Sustainability at the University of Maryland School of Public Policy in the US – “clean coal” refers to “the more efficient coal use, such as ultra-supercritical coal plants with ultra-low air pollutant emissions”.
Dr Cui says that the average coal consumption per kilowatt hour (kwh) of electricity generation “has been declining” in China “through a combination of replacing the old, dirty, inefficient fleets with new builds and retrofitting”. But she also cautions:
“However, without a target on total consumption, it is unlikely that efficiency improvement itself can deliver large emissions reduction.”
In a related explanation, China announced in February 2019 that it had built “the world’s largest clean coal power supply system” after completing “ultra-low emissions and energy-saving revamps” on the majority of its coal fleet “two years ahead of schedule”.
(Dr Xie Chunping also shares her views on the meaning of “clean and efficient” use of coal lower down.)
Speaking of Beijing’s series of coal-boosting instructions, all of the experts interviewed by Carbon Brief refer to last year’s power shortages as a direct driving factor.
Byford Tsang – London-based senior policy advisor at E3G, a climate change thinktank – tells Carbon Brief that there has been a “shift in the rhetoric” towards coal since the “power crunch”, with the government underlining China’s “endowment” of coal and describing the fuel as the “most prominent” energy source that the country needs to secure and supply.
But, in Tsang’s opinion, this did not represent a “policy shift” because the Chinese government had already underlined the importance of energy security in its 14FYP, which was approved in March 2021. (Read Carbon Brief’s assessment of the 14FYP.) Tsang explains:
“The one thing we picked up back then [in March 2021] was the stress on energy security. Energy security was listed as one of the three security risks of China’s development for the 14FYP period, alongside financial and food security.”
“Within the plan, there was also language regarding the clean and efficient use of coal and raising coal production and production of oil and gas. All of that is not new, but the power crunch has definitely made policymakers more focused on energy security.”
Matt Gray – co-chief executive of TransitionZero, a London-based “climate analytics firm” – tells Carbon Brief that the “ongoing energy crisis and shortages internationally” is “probably a factor” behind Beijing’s “refocus” on energy security.
He adds that the situation is “obviously going to be exacerbated by the recent news of what is happening in Ukraine”. (Carbon Brief has analysed the implications of Russia’s invasion of Ukraine on energy and climate change in this Q&A).
A recent Bloomberg article reflects Gray’s concern. The outlet reported on 14 March that China is planning “a massive increase” in coal mining in a move that “will dramatically reduce” its dependence on coal imports and “deal a blow to its near-term climate actions”. It said that such an increase in mining would cut China’s “already scant” reliance on foreign coal “after global prices hit record levels in the wake of Russia’s invasion of Ukraine”.
A separate Bloomberg report said that the effects of the coal push “could already be evident from space” due to a “powerful cloud” of methane captured by a satellite above China. In a report published on 21 March, the outlet said that a boost in coal mining may have led to the plume of methane – a potent greenhouse gas (GHG) with an estimated warming potential of around 30 times that of CO2 – that has been detected in a location near a coal mine in Inner Mongolia.
Why is China still building new coal power plants?
Apart from the recent coal-production boost, China’s continuous construction and approval of new coal-fired power plants also form part of the picture as to how Beijing views the role of coal.
While more than 40 countries pledged to phase out their use of coal-fired power at last November’s COP26, the construction of new plants is expected to carry on in China.
Currently, China is home to more than half of the new power plants that are expected to be built in the world, according to the Global Coal Plant Tracker. The database shows that, as of January 2022, 158GW of new coal-fired power capacity had been announced, pre-permitted or permitted in China, making up 57 per cent of the global pipeline.
The briefing by CREA and GEM finds that China started construction on 33GW of new coal power plants in 2021, “the most since 2016 and almost three times as much as the rest of the world put together”.
An address by Xi last April set the tone for the country’s stance on coal for this decade. Speaking at the Leaders Summit on Climate via video link, Xi announced:
“China will strictly control coal-fired power generation projects and strictly limit the increase in coal consumption over the 14FYP period (2021-2025) and phase it down in the 15FYP period (2026-2030).”
(Although the Chinese government has not provided an explanation of Xi’s words, many observers and media outlets believe that they mean China plans to peak its coal consumption in 2025. Prof Du Xiangwan interpreted China’s coal policy last month on CCTV, which China Briefing reported on.)
It is worth noting that, although China is still planning, approving and building new coal-fired power plants, the new projects usually use “high-efficiency” units that are aimed at reducing coal consumption and pollution.
A scheme issued last November by the National Development and Reform Commission – the state economic planner – on the “retrofit and upgrade” of coal power has given detailed instructions on the “efficiency” levels that new and existing coal power units need to reach in various aspects. In addition, the document stipulates that new coal power capacity “may” replace the capacity left by the “backward” capacity that has been shut down. (China has been closing down small, older and more polluting units over the past few years.)
Matt Gray of TransitionZero says that even though the new coal power plants that are being built in China do not involve “enormous” investments in themselves, what they mean is that “China does see coal as a primary source of securing energy, still”.
Gray says that such a perspective is “a false narrative” because “what the world learned last year was that coal is not as abundant or as secure as it has previously been considered”. He tells Carbon Brief:
“What we are trying to communicate is that renewable energy is low in cost and a secure electricity source in a way that coal can’t be. The signal we are getting out of China is that policymakers are not entirely convinced of that yet.”
Yu Aiqun tells Carbon Brief what the surge of coal-plant approvals signifies is that “the direction of wind has changed”.
Yu says that the Chinese government has always been “walking a tightrope” in “balancing” two areas of work: pollution and emission control versus economic and energy security.
Because it is “very hard” to find a “balance point” for these needs, even though the Chinese government would try to aim for a “balance” in the long term, it often swings from one side to another in the short term, Yu explains, adding:
“For example, when fast economic growth [causes high pollution and emissions] or when there are major international events, such as President Xi’s climate pledges and COP26, international pressure will force China to lean towards protecting the environment and tackling climate change. However, when there are issues with energy supply or when energy security is endangered, it will shift to favouring the other side.”
Yu points out that those approvals also highlight a “strong impulse” of building coal power plants in China. She notes:
“Usually, it would take a company two to three years to prepare the documents to apply for the construction approval [for a coal-fired power plant]. The string of approvals means that the operators had been well prepared and waiting for the floodgates to open.”
Yu adds that the central government had been relying on strict policies to “suppress” new coal plants, but once the direction of policy changed, the “restless production capacity suddenly rushed out”.
Dr Mo of Beijing-based iGDP also mentions such an “impulse”, even though – as he says – “many organisations in the country have urged against approving new projects”.
Dr Mo explains that the “impulse” comes from local governments because building coal power plants can help boost their regions’ economic performance. Besides, some provinces want to build coal-fired power plants so that they can stop relying on other provinces for electricity due to the province-based setup of China’s power grids, Dr Mo adds.
(Currently, applications for new coal-fired power plants are verified and approved by provincial governments in China, after the central government delegated its power to them in 2014. However, the provincial governments do not have 100 per cent authority on the matter, either. Carbon Brief understands that, although they are the one to issue the permits, they must follow – and sometimes guess – the central government’s policy direction while considering the applications. This Carbon Brief guest post touched upon the topic.)
Some experts perceive new coal-fired power capacity as “necessary” to ensure a stable grid for meeting growing demand in the near term, according to Dr Ryna Cui at the University of Maryland School of Public Policy.
“One argument for that is to use coal plants for providing flexible peaking services to help support an increasing share of renewables in the grid,” Dr Cui tells Carbon Brief. She also says:
“Given the construction period of coal plants [is] between 18 to 36 months or even longer, [China] is likely to see continued coal power capacity growth over the next few years even if most early stages projects are cancelled. Total installed capacity will also depend on how much older plants can be retired.”
The “argument” mentioned by Dr Cui echoes recent instructions coming out of Beijing, which now regards coal power as part of the nation’s renewable-led power system in the future.
A high-level meeting chaired by Xi in January instructed that the country should “vigorously plan and construct” a “new energy supply and accommodation system” (新能源供给消纳体系), which would see “large-scale” solar and wind energy bases as the “foundation”, “clean and efficient” coal power capacity as the “support”, and “stable, safe and reliable” ultra-high-voltage transmission lines as the “carrier”.
Interpreting the directives, Prof Zeng Ming from the Energy Internet Research Centre at the North China Electric Power University in Beijing told Yicai – a Shanghai-based financial publication – that a main method used by China to build such a future system is to pair large wind and solar farms with “clean and efficient” coal power capacity in their surrounding areas. The latter could “balance out” the “instability” of renewable resources, Prof Zeng noted. He added that power would be sent for long distances to load centres by ultra-high-voltage transmission lines in the future system.
The newly published 14FYP for energy centres around the development of a “modern energy system” which chimes with Xi’s command for a “clean, low-carbon, secure and highly efficient” energy system. (China Briefing analysed the 14FYP for energy this month.)
Zhang Jianhua, the head of China’s state energy regulator, told China Power News Network that while China must “accelerate” the development of non-fossil fuels, coal power would be tasked to provide “flexible” services to help the power system take in more new energy.
Chai Qimin – director of the strategy and planning department of the National Centre for Climate Change Strategy and International Cooperation, a government-affiliated thinktank – expects fossil fuels to “work” with non-fossil fuels. He told the 21st Century Business Herald, a Chinese financial publication:
“The development of the entire new type power system in the future needs optimised combinations of fossil fuels and non-fossil fuels, traditional energy and new energy. [They] need to play different roles and work together.”
All these instructions and comments help to provide an official explanation as to why China is still approving and building new coal-fired power plants, as well as retrofitting existing units.
China has sent out “very clear” messages that the “role of coal power has changed”, according to Dr Xie Chunping from the Grantham Research Institute on Climate Change and the Environment. In her view, building new coal-fired power capacity is “important” for ensuring power supply during energy transition when growth in non-fossil energy power generation is not large enough to cover incremental increases in electricity demand.
Dr Xie tells Carbon Brief that the Chinese government has indicated “clearly” that new coal-fired power plants will be treated as “flexible resources or capacity” in the future to help ensure the security and stability of power supply – instead of operating at their full capacity.
Such a message means that building new coal-fired power plants does not necessarily equal an increase of CO2 emissions in the future, as those new plants’ actual operating hours could be controlled at “a very low number” once renewable capacity builds up, Dr Xie explains. She adds:
“Although those newly built coal-fired power plants will not retire in a short period of time, their operating hours can be very low. The reason why they need to exist and their existence is very important is that in the short term they can meet the fast growing electricity demand, while in the long term they can work as peak regulation capacity and support high penetration of renewable integration through providing the necessary flexibility.”
“When renewable energy and energy storage technologies are fully developed, [China] can rely more on wind and solar generation and reduce the utilisation of coal power capacity whenever possible. This energy transition is not only good for the environment and climate, but also crucial for ensuring national energy supply security in the long term, as renewables are much safer than fossil fuels which are often associated with uncertainties and geopolitical conflicts.”
Moreover, Dr Xie points out that moving away from coal is a challenge faced by many countries, not just China. She says that coal consumption continues to drop “steeply” in developed countries, however, the phase-out of coal in many developing countries is a “daunting challenge”.
Dr Xie says that the proportion of coal in China’s energy mix is “too high”, therefore, a transition cannot happen “overnight” and needs to happen “step by step”.
On the administrative level, China’s state energy regulator has said that, “in principle”, China will not build coal power projects whose sole purpose is to generate electricity in the 14FYP period.
But the authority hinted that some coal power projects would still be approved and built as it said that the country would “arrange a certain scale of supportive power sources to ensure the security of electricity supply, as well as adjustable power sources to facilitate the accommodation of new energy”.
The above messages were not issued as a direct order by the state energy regulator. Instead, they came in a reply from the authority to a political proposal submitted during last year’s “two sessions”. Notably, the response was made in August but, according to various Chinese reports, it was only published in late February. This indicates that it was a message the Chinese government wanted to convey at that particular time.
Dr Xie says the state energy regulator intended to answer a key question through the messages: is China going back on its climate commitments by building new coal power capacity? According to its response, the answer is “no”, because China has assigned a new role for coal power, Dr Xie explains.
E3G’s Byford Tsang says that the response served two purposes. One is to explain some of the elements in the energy 14FYP plan. The other is to clarify how China plans to “strictly control” the buildout of coal power plants.
The explanation by Chinese policy advisers also pointed to the “changing role” of coal power, as Dr Xie has mentioned. Prof Wang Zhongying – another senior adviser to the Chinese government at COP26 – told Carbon Brief in an interview that there is a “widespread misunderstanding” that China’s climate pledges means that it would stop building coal power plants.
Prof Wang emphasised that what China talks about is exiting the consumption of coal, not the installed capacity of coal power generation. Prof Wang elaborated in his interview:
“In some places, it is possible that green electricity from wind and solar, for the moment, due to the grid [availability] or other reasons, such as network load, cannot be delivered. But if it [such places] happens to have coal [supply] and installed [coal-fired power generation] capacity, then it can build [some coal power plants]. It is possible that [such places] will develop a few new coal power plants sporadically. But, at the same time, the old and ancient installed capacity will also be retired.”
Prof Wang added:
“From our point of view, what we need to do now is to further constantly lower the operating hours of installed coal power, while keeping the power system operating smoothly, safely and efficiently. And, here, ‘efficiency’ means to accommodate more [renewable energy].”
Will the coal push affect China’s climate goals?
There is a range of views about what China’s recent push for coal production would mean for its climate goals, especially its efforts towards carbon neutrality.
From a policy perspective, although all the experts interviewed by Carbon Brief believe that China should be able to follow its timeline of peaking CO2 emissions despite the coal boost, some worry that the move could make China’s decarbonisation “slower” and “more costly”.
Byford Tsang says that the increasing “focus on coal” lately “is not great news” to China’s “dual-carbon” goals. He underlines that the Chinese government, however, “has given itself a lot of wiggle room” in interpreting its carbon-peaking target because the official wording only refers to the timeline as “before 2030”.
In Tsang’s opinion, “strictly speaking”, China is “not walking back on its target”, but he warns that “that any additional fossil fuel is going to be stranded asset because it is not going to run the full course of the lifetime if we are to meet the peaking and neutrality goals, or getting China’s emission trajectory in line with the 1.5C target under the Paris Agreement”. He notes:
“[The recent coal push] might not have a big impact on China meeting the 2030 target alone, but it will make China’s transition [towards carbon neutrality] more costly because more new coal power plants will mean more stranded assets and the local economy will rely more on fossil fuels and it is going to make it harder to move away.”
Tsang expects the combination of the “power crunch” and the “increasing geopolitical tensions” between China and “the West” to give Chinese policymakers “a more difficult choice” in balancing the need to transition its energy structure and to “save” energy security “because coal is the fall-back option”.
Dr Ryna Cui believes that any actions that promote coal – rather than phasing it down – “will add challenges” for China’s “post-2030 transition”.
As Dr Cui puts it, China’s near-term commitments on carbon peaking and coal phasedown do not include specific targets on the total CO2 emissions or coal consumption and, thus, “leave room for uncertainties”.
Even though net-zero is “far down the road”, this decade is “certainly critical”, she notes, adding that actions such as peaking earlier at a lower level and accelerating the process to start phasing down coal “can set forth a good path toward carbon neutrality”. She continues:
“The opposite actions will add challenges for the post-2030 transition. Building new coal plants will have economic implications with increased stranded assets, although the emissions impact is less clear with reduced utilisation levels and more efficient use of coal.”
(A new report co-authored by Dr Cui develops an “orderly” plan for China to phase down coal in the 14FYP and 15FYP periods. The report was jointly published by the Centre for Global Sustainability at the University of Maryland School of Public Policy and the California-China Climate Institute.)
Coal is “China’s 800-pound gorilla” and “phaseout is absolutely critical” in order for China to meet its climate targets, according to Matt Gray. In particular, he highlights the financial risks of falling back on the fuel, as he tells Carbon Brief:
“Failure to caveat spending to avoid coal plant investments will have implications on China’s net-zero pledge and economy. Previous analysis from TransitionZero shows that China would need to close, convert or put into reserve capacity 364GW of coal by 2030 in order to meet its net-zero pledge and that continued exposure to coal poses increased economic risk, given the price volatility associated with coal compared to zero-carbon alternatives.
As for Prof Alex Wang – the faculty co-director of the Emmett Institute on Climate Change and the Environment of UCLA School of Law in the US – the instructions coming out of the recent “two sessions” are “worrisome from an environmental perspective”, though “not surprising in a period of economic uncertainty”. He says:
“This year’s NPC meeting has emphasised economic growth. Official comments on climate policy have continually emphasised the need to move cautiously on coal reduction. Perhaps this is just a call for ‘smart’ decarbonisation, but it is hard to see how this does not also mean ‘slower’ decarbonisation.”
However, Chai Qimin – who works for a government-affiliated thinktank in Beijing – sees the issue from a different angle. He told the 21st Century Business Herald that pursuing the “dual-carbon” goals does not mean that China will not develop its coal industry.
Chai stressed that the operating efficiency of China’s coal-fired power units were “generally high” (something Yu Aiqun and Dr Xie Chunping tell Carbon Brief, too) and that coal-fired power capacity “will grow appropriately before 2030”. He said that those newly built units would “continue to play a role in the future” and even become “an entry ticket” for investment in renewable energy, due to China’s current policy.
Regarding the financial prospect for those newly built coal power plants, Chai told the outlet that China’s power pricing system could be reformed to ensure that electricity generated by those plants would be paid “relatively higher” prices as a supportive measure. He added:
“Therefore, in the future, coal power [plants] would not need to operate for more than 4,000 hours to make a profit. It is possible that [they] could make profit by generating power for more than 1,000 or even just several hundred hours.”
Dr Liao Xuanli – senior lecturer on international relations and energy security studies at the University of Dundee in Scotland – says that although there are “quite some uncertainties”, she does not think that China would boost coal use “for too long” with “the advancement of technology”, such as “clean coal”, carbon capture and storage (CCS), carbon capture and utilisation (CCUS) and hydrogen. (According to an explainer published by the Paper – a Shanghai-based news website – “clean coal” refers to the coal that is “processed” and, therefore, “emits significantly less sulphur dioxide (SO2), nitrogen oxides (NOx) and dust” while burning.)
Dr Liao notes that “the temporary policy would not affect China’s climate agenda in the long run”. She explains: “If you could compare China’s case with the EU’s view on natural gas, it might be easier to understand the current situation in China.” (Many policymakers in the EU have viewed gas as a “bridge” from coal to renewables, though Russia’s invasion of Ukraine and high gas prices have posed severe challenges to this position.)
From an emissions point of view, the opinions are more varied on whether the recent coal drive would push up China’s carbon peak level, which will have a knock-on effect on the effort needed to neutralise those emissions.
Dr Xie Chunping thinks that the push “will certainly affect” the level of China’s CO2 emissions in “the following few years” because more coal is being used to meet the growing demand.
But she says that the move “may not necessarily” affect the timing and level of China’s emissions peak, “as long as China starts to significantly reduce the utilisation rates of coal-fired plants and use them as backup capacity, once renewables build up”.
Dr Yang Muyi of Ember says that when and at what level China will peak its CO2 emissions “largely” depends on the trajectory of its emission intensity, the CO2 emissions per unit of GDP.
Dr Yang points out that China’s emission intensity has seen a declining trend in recent years, highlighting that between 2005 and 2019, the benchmark had dropped by 48.1 per cent – higher than the country’s initial targets of 40 per cent-45 per cent intensity reduction by 2020.
He refers to previous analysis conducted by Carbon Brief, which suggested that China’s CO2 emissions would peak in 2027 at 12.7bn tonnes if the country could reduce its emissions intensity by 65 per cent of 2005 levels by 2030 – a target set by China’s original nationally determined contribution (NDC). This would require an estimated annual reduction of 3.1-5.2 per cent after 2020, according to the analysis. (China has enhanced its emissions intensity target to a “more than 65 per cent” drop from 2005 levels in its updated NDC published last October.)
Dr Yang says the recent ramp-up of coal production “may contribute to” – but not necessarily lead to – higher CO2 emissions intensity. He notes that as long as the country’s overall CO2 emissions intensity could continue to fall at the rates “considered sufficient” for hitting the 60 per cent-65 per cent targets – in this case, an estimated 3.1-5.2 per cent annual reduction rate – it is “very likely” that it would be able to peak its CO2 emissions “before 2030” at the projected 12.7bn tonnes, assuming that China’s economy grows at expected rates.
Dr He Gang – assistant professor in the Department of Technology and Society at the Stony Brook University in the US – tells Carbon Brief that China has made clear its long-term climate pledges, but “when and at what scale” China peaks its emissions will have a “large” impact on how it and the world would achieve carbon neutrality.
Citing new figures from the International Energy Agency (IEA), Dr He says that China’s energy-related CO2 emissions reached 11.9bn tonnes last year, which “already exceeded” the previously discussed goal of 11bn tonnes in 2030 or a more aggressive goal of 10.5bn tonnes in 2025. (China Briefing has explained the new IEA figures.) Dr He adds:
“If emissions from coal generation could not be reversed, the peak level will be even higher than what had been estimated. The cumulative additional emission will also require a much steep mitigation pathway to achieve carbon neutrality.”
Speaking of China’s construction of new coal power plants, Dr He says that, although the new builds are usually “high-efficiency” plants, if they are not accompanied by the retirement of small inefficient plants and flexibility retrofit of existing plants, they “will make it harder for China to deliver its climate pledges”.
On the same topic, Matt Gray expresses “particular concern” of China’s promotion of “clean and highly efficient utilisation of coal”, especially because the country has not laid out “any specific new targets for coal phaseout”.
On whether “high-efficiency” coal-fired power units could help reduce CO2 emissions, Matt says that the “high-level” answer is “no”. A country “cannot just sub out the existing fleet with high-efficiency plants with the hope of being net-zero in the long term”, Gray notes.
Furthermore, he says that building such plants “on the expectation that they will be supporting a net-zero policy goal over the long term is patently untrue”. He explains:
“As a rule of thumb, an average coal-fired power plant has an emission intensity of about 900 grams of CO2 per kilowatt-hour (gCO2/kWh). To be net-zero aligned, based on the IEA’s net-zero emissions scenario, the carbon intensity will need to be around 140gCO2/kWh by 2030. The most efficient coal plants have a carbon intensity of 650gCO2/kWh.”
However, Gray notes that there is “probably a role” for using “high-efficiency” coal plants for peaking services over the short term as China is building wind and solar farms at a “frantic pace” and this “variable” energy will “need to be supported by dispatchable technologies to balance the system”.
“But in terms of running high-efficiency coal plants without CCS over the long term based on the presumption they are net-zero aligned, that is incorrect,” he concludes.
Dr Xie explains what “clean and efficient utilisation of coal” means from her point of view. She says that the “clean” use of coal is not aimed at cutting CO2 emissions; instead, it refers to coal preparation and the reduction of the emissions of air pollutants – such as SO2, NOx and dust, according to China’s Law on the Prevention and Control of Air Pollution. (Coal preparation, also known as coal washing, is a process aimed at reducing sulphur and ash in coal and restricting the mining of high-sulphur or high-ash coal.)
In terms of the “efficient” use of coal, Dr Xie notes that the move intends to reduce CO2 emissions by “further lowering” the coal consumption of a coal power unit when it generates electricity.
According to China’s scheme
on the “retrofit and upgrade” of coal power published last November, the coal consumption in 2020 of those coal-fired power plants whose capacity is six megawatts (MW) or higher stood at 305.5 grams of standard coal equivalent per kilowatt hour (gce/kWh). (The figure has declined by 3 per cent compared to 2015, 8 per cent compared to 2010 and 17 per cent compared to 2005.)
The scheme stipulates that newly built coal-fired power units should “in principle” be “ultra-supercritical units” whose coal consumption is lower than 270gce/kWh. It requires the average coal consumption of all coal-fired power plants nationwide to be lower than 300gce/kWh hour by 2025.
Dr Xie points out that the scheme also emphasises retrofitting existing units to lower thermal coal use for power generation and to increase their capabilities of providing flexible peaking services to facilitate the accommodation of clean energy. For those units whose coal consumption is higher than 300gce/kWh and cannot be retrofitted or are deemed “backward”, they should be “shut down but not demolished” to be used as backup power sources, Dr Xie cites the scheme as saying.
Despite their different views on the role of coal power and the impact of China’s coal drive on its climate goals, all experts interviewed by Carbon Brief agree on one thing: the recent coal push does not mean that China is rethinking or walking back on its climate commitments (although some experts caution that China’s pledges are not ambitious enough for meeting the 1.5C target under the Paris Agreement).
Another consensus is that even if there are short-term adjustments, the Chinese government will pull all the stops out to hit its announced targets.
As Yu Aiqun puts it, the Chinese government is “a master at planning”, adding that “one has to respect them for that”. She says: “Once a goal is set, no matter what the goal is, [the central government] will dissect it and assign relevant instructions down [to local governments]. These orders will then become political orders for local officials and failing to meet them will lead the officials to get dismissed.” (Carbon Brief’s article on the “nine key climate moments” for China has explained this governing style.)
Dr Ryna Cui says that it is “quite usual that China commits to what is the bottom line and over-accomplish its targets”. She adds that such an approach “just requires more structured and integrated strategies to link near-term actions to long-term goals”.
Dr Cui goes one step further and notes that, “more importantly, low-carbon transition is in line with China’s own vision to achieve a ‘Beautiful China’”. She says that the transition could provide “strong synergies with China’s broad development priorities and [lead] to sustained, high-quality growth that is in harmony with the environment and people’s well-being.”
She concludes that “it is, therefore, in China’s own interests to race to net-zero emissions and bring a better quality of life to its people”.
This story was published with permission from Carbon Brief.