- China to stop building overseas coal plants
- Xi’s announcement could impact 44 projects in Asia and Africa
- China’s national coal-fired power program continues to expand
SHANGHAI / SINGAPORE, Sep 22 (Reuters) – China’s pledge to stop building overseas coal-fired power plants could result in an investment of $ 50 billion as it cuts future carbon emissions, said analysts, although Beijing’s national coal program still supports dirty fossil fuel.
Chinese President Xi Jinping said in a pre-recorded speech to the United Nations General Assembly on Tuesday that China will help developing countries generate green energy and stop building coal-fired power plants abroad. Read more
China has come under international pressure to announce an end to overseas coal funding as part of its updated set of national climate pledges to be submitted to the United Nations. Read more
Beijing is the largest source of funding for coal-fired power plants in the world, and Xi’s announcement will have a huge impact on coal-fired power expansion plans in countries like Bangladesh, Indonesia, Vietnam and South Africa.
The announcement could affect 44 coal-fired power stations intended to finance the Chinese state, for a total amount of $ 50 billion, according to Global Energy Monitor (GEM), a US think tank. This has the potential to reduce future carbon dioxide emissions by 200 million tonnes per year, GEM told Reuters.
“China’s announcement is one of the most important developments on the climate front this year, as it may well mark the end of international public funding for coal-fired power plants,” said Christine Shearer, director of the coal program of GEM. “We will see many countries turn to alternative sources of electricity generation instead, and I hope they are supported to ensure that it is clean energy.”
Environmental groups have also said they will force big coal financiers like the Bank of China (601988.SS), tied to 10 gigawatts of overseas coal-fired power capacity, to set a timetable to pull out of the gas. sector.
China’s pledge follows similar moves by South Korea and Japan this year, shutting down the last three major public financiers of overseas coal-fired power plants.
It came hours after US President Joe Biden pledged to double spending on helping developing countries deal with climate change to $ 11.4 billion by 2024, as world leaders set targets milestones ahead of the UN climate change summit COP26 starting in November.
“DOMESTIC COAL ADDICTION”
Despite widespread optimism over Xi’s announcement, his carefully worded statement revealed few details and left room for the continuation of existing plans.
According to data from the Boston University Global Development Policy Center, more than 20 Chinese-funded coal plants are under construction in South Africa, Pakistan, Indonesia, Vietnam, Bangladesh, Zimbabwe, Serbia and the Arab Emirates United. 17 others are in the planning stage.
“Details of the overseas coal exit have yet to be defined, including timing, eligibility and the separation between public and private funding,” said Yan Qin, senior carbon analyst at Refinitiv, a financial data provider. “But I’m less concerned with the details. When the Chinese leader announced this goal, the statement may be so simple and short, but it will be implemented in depth.”
The new pledge also does not address China’s plans to expand its own coal-fired power plants.
China’s national program accounts for more than half of all coal-fired power plants under construction worldwide, according to a report released this month by E3G, a European climate think tank.
While Xi has pledged to “strictly control” new domestic coal-fired power generation capacity over the 2021-2025 period, the country will not start reducing coal consumption until 2026.
“With the new direction set for overseas coal, China must now work harder on its dependence on domestic coal,” said Li Shuo, senior climate advisor at Greenpeace.
Report by David Stanway in Shanghai and Joe Brock in Singapore. Editing by Gerry Doyle
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