China to Bring a Halt to Overseas Coal Project Funding?

ON 09/23/2021 AT 07:56 AM

China’s President Xi Jinping announced on September 21 that his country will stop funding coal projects of all kinds, including coal-fired power plants, anywhere outside of the country. If only they would stop funding their own coal projects.

President Xi Jinping of China at the United Nations

President Xi Jinping of China as he addressed the United Nations on September 21, 2021, via pre-recorded video feed. Photo: Li Shuo, Greenpeace Asia, via Twitter

The surprise announcement came on the first day of this week’s UN General Assembly meeting. It was part  of a pre-recorded statement that was still surprisingly timely.

Just a few hours before Xi’s video ran before the audience, Joe Biden had announced the U.S. would be providing $11.4 billion in aid – over the next three years – to help developing countries in need transition to renewable and other cleaner energy sources.

With that as background, Xi’s statement came across as if he was jumping on the same bandwagon as Biden, to help save the developing world from the climate crisis that both his country and the United States are currently most responsible for.

“China will step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad,” Xi said in the video.

China is “far and away the largest public financier” for foreign coal-fired power plant projects, according to Kevin Gallagher, who directs Boston University’s Global Development Policy Center. From 2013 to 2019 alone, the People’s Republic of China provided funding to build a full 13 percent of all such projects being built outside its borders.

A separate analysis indicated a single Chinese banking institution, the state-run Bank of China, had provided a total of $35 billion in financing since the original Paris climate accords were signed off.

“China was the last man standing,” said Justin Guay, director of global climate strategy at the Sunrise group, an advocacy organization working to move the world away from the use of all fossil fuels. “If there’s no public finance of coal from China, there’s little to no global coal expansion.”

Initial statements from multiple quarters applauded China for its decision.

“We’ve been talking to China for quite some period of time about this,” said John Kerry, the U.S. Climate Envoy. “I’m absolutely delighted to hear that President Xi has made this decision.

“It is quite clear the writing is on the wall for coal power,” tweeted British minister Alok Sharma, the individual who will chair the COP26 summit to be held in Glasgow in a little over a month. “I welcome President Xi’s commitment to stop building new coal projects abroad – a key topic of my discussions during my visit to China.”

“This is an absolutely seminal moment,” said Xinyue Ma, an energy development finance expert at the Boston University Center.

World Resources Institute Vice-President for Climate and Economics Helen Mountford said what Xi had promised was “a historic turning point away from the world’s dirtiest fossil fuel.”

While cutting off the external financing for coal projects is important, many paid careful attention to the other half of what they were hoping President Xi would also comment on: what the country would do about its own coal-fired power plant projects.

During Tuesday’s statements, President Xi reiterated his pledges from 2020 that his country would reach a peak in total carbon dioxide emissions produced within his country by 2030. He also said the PRC would be carbon neutral sometime before 2060.

Those words, especially from the single biggest producer of carbon dioxide emissions in the world, suggested China had little interest in curbing its total contribution to the climate crisis and global heating.

According to Carbon Brief, climate villain China’s total carbon atmospheric emissions for the fiscal year ending March 2021 reached a record high of 12 billion tons (Gigatons of CO2). For the year, despite it being the same twelve months for most of the lock downs in all countries, that represented a 600 million ton increase over 2019’s carbon emissions totals.

China's 12 billion tons of carbon emissions works out to about 28% of the entire world's annual greenhouse gas emissions.

For the first three months of 2021, China’s total emissions from fossil fuel use and cement production also grew by 14.5% relative to the same three months in 2020.

China also put online a total of 38.4 gigawatts of new coal-fired power plants in 2020. That is three times the total for all new coal-fired power plants made operational throughout the entire rest of the wordld for that year.

According to data provided by the U.S. think tank Global Energy Monitor (GEM) and the Centre for Research on Energy and Clean Air (CREA) in Helsinki, after considering decommissioning of older and likely heavier-polluting coal-fired power plants, those new Chinese plants contributing to a net gain of 29.8 GW of total coal-fired power capacity for the year. That compares to the rest of the world having cut a total of 17.2 GW of coal-fired power during the same period.

Further, in 2020 China approved a record additional 36.9 GW of coal-fired power capacity in 2020. That leaves China with a total of 247 GW of coal power plants currently in development.

All this means is that when China makes big pronouncements about slashing all external coal-fired power plant production in the name of helping ease the accelerating pace of global heating, it means nothing. The real indicator to watch is how the country is dealing with its own coal-fired power production. And on that parameter, China clearly has no intention of slowing down in its construction of new plants and use of the current ones.

Some claim that the only reason for China no longer supporting coal-fired power plants in other countries is to ensure that it has a plentiful supply of coal for its own filthy power plants. Coal prices have skyrocketed lately and are increasing power costs in China. Fewer foreign coal power plants means more coal for China at lower cost, which is essential for it to maintain its predatory manufacturing practices. 

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