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China is spending big on coal, according to a new report, while funding for new coal plants abroad has been slashed to zero.
China's "greening" of its Belt and Road Initiative, now in its 10th year and costing more than $1 trillion to date, mean its BRI investments in 2023 are the most environmentally friendly in the controversial strategy's history.
President Xi Jinping of China introduced the BRI in 2013, billing it as the new silk road for trading across Asia, Africa and, eventually, Europe. Its projects have reached South America, too.
Xi's dream of connecting new trading routes has suffered serious setbacks, with the grand policy accused of overlooking the debt sustainability of its participants, using the scheme as a soft power bargaining chip, and maintaining low environmental standards.
In the wake of the environmental attacks, Beijing began to move away from controversial fossil fuel projects across the world. But not in China—estimates for the amount of gigawatt power it consumes are in the billions of Chinese yuan.
China has pledged to peak emissions by 2030 and reach net zero by 2060. Funding for BRI coal energy projects outside China dropped to zero this year. In 2015, China invested $10 billion in coal power infrastructure abroad, with enhanced spending on alternative sources of energy, according to a report from the Green Finance and Development Center (GFDC) at Shanghai's Fudan University.
In China, however, the zero-coal trend is reversing. In the first half of 2023, construction was started on 37 gigawatts of new coal power capacity. Projects for 52 gigawatts were approved, 41 gigawatts were newly announced, and 8 gigawatts of previously shelved projects were revived, for a total of 138 gigawatts.
A single gigawatt is equivalent to either one coal power plant, 310 wind turbines, 100 million LED bulbs, or 1.3 million horses, according to the U.S. Energy Department's Office of Energy Efficiency and Renewable Energy.
In the past year, 243 gigawatts of coal-fired capacity was permitted or was under construction in China.
The Center for Research on Energy and Clean Air, a Helsinki-registered think tank, said China would struggle to hit its own emission targets if current trends hold, according to its latest report. Coal power capacity could increase by 23-33 percent from 2022 levels, CREA said.
The research organization advised the Chinese government to suspend all projects that weren't necessary for "supporting grid stability" or "supporting the integration of variable renewable energy," if it wanted to commit to reduced emissions.
Beijing should also "accelerate investment in clean power generation to fully meet growth in electricity demand and stop increasing bulk power generation from coal," the report said.
The current spree of new projects is threatening China's coal reduction plan, which was based on a pledge made by Xi, CREA said.
China's official policy on coal power commits to making clean energy a "mainstay" of the national grid, while coal moves to a "supporting" role. New coal power plants should not be permitted for the purposes of bulk power generation, but only to support grid stability and renewable energy integration, it states.
But the report found that the Chinese provinces adding most coal power plants were also generating most of their power from coal rather than clean energy sources.
"Our analysis makes it clear that new projects are not being scrutinized and the conditions for new coal projects specified in central government policies are not being enforced in practice," CREA concluded.
"It appears that the central government is encouraging coal power investment with few if any preconditions, as a part of efforts to offset the weakness in other parts of
the economy," it said.
Coal power permits were first loosened in early 2020, as the COVID-19 pandemic broke
out and the government sought to prop up economic activity. The changing climate meant more air-conditioning units and more working from home, straining power grids in China and other nations.
Beijing is also investing elsewhere. This year, solar and wind installations increased by 150 percent and 80 percent, respectively, with six months of solar installations equalling the total solar power capacity installed in Germany, the report's authors noted.
"In addition, China permitted six nuclear units at the end of July. Even with this, hundreds of brand-new coal power plants will make meeting China's climate
commitments more complicated and costly," CREA said.
"China has not really engaged in significant overseas coal since 2020, with some exceptions. Domestically, however, the calculations of a coal exit are vastly different, leading to more coal. Domestically, China's calculus for energy is driven by domestic pressures, most of which do not exist for its overseas portfolio," said Christoph Nedopil Wang, a professor and director of the Griffith Asia Institute in Brisbane, Australia.
Nedopil Wang, who is the founding director of Fudadn's GFDC, told Newsweek: "For coal, this includes considerations of energy security with higher power demand in the summer due to the heat, combined with volatile power supply from hydro and others due to climate change, and falling back on industry to ensure economic growth. There are political considerations, where coal reliance reduction might lead to political risks from coal dependent provinces, amongst others."
"Finally, the 2030-2060 targets also have no absolute peak of emissions, but only a peak of time. This means that any increase to 2030 is technically still meeting the climate goals," he said. "As China is also expanding renewable energy at the same time, it is what I call China's 'panda dragon' approach to environment, some great stuff, some less good stuff for the environment. Is China a panda or a dragon for the environment? It seems it is both."
Update 9/1/23, 3:30 a.m. ET: This article was updated with additional comments.
