Did China’s coal consumption really threaten the Paris Climate Agreement targets?

No so long ago the Western news media was full of stories of how China was “ramping up coal power” and claims that this was a threat to achieving the Paris Climate Agreement targets. The story was run by the Financial Times and the UK Government controlled BBC, among others. Of course, the media versions ignored detail in the report that the stories were based on, Out of Step – China is driving the continued growth of the global coal fleet, prepared by the EndCoal.Org, backed by a coalition of Western environmental NGOs.

Of course, a lot has happened in the past couple of years. At the general debate of the 75th session of the United Nations General Assembly in September 2020, China’s President Xi Jinping announced that China will achieve peak CO2 emissions before 2030 and carbon neutrality before 2060.

This was a major strategic decision by China to achieve sustainable development for the Chinese nation and build a community of a shared future for mankind. It demonstrates to the world China’s determination in pursuing green and low-carbon development and its responsibility as a major country to actively tackle climate change and safeguard a bright future for humanity.

Reducing carbon emissions even as the living standard of China’s people continues to rise is a challenge unlike any country has faced before.

China is already a leader in green technologies such as wind and solar power generation, and the switch from carbon-based energy offers economic opportunity as well as costs. China’s government has laid a detailed blueprint for these changes in its 14th Five-Year Plan for 2021 to 2026.

Here we re-visit one of the first articles China Environment News carried. It was a response to the biased media stories about the Out of Step report.

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Out of Step – Really?

The argument by the author’s of Out of Step was quite basic, and best summarised in the author’s own words as follows:

“China’s proposal to continue increasing its coal power capacity through 2035 is not compatible with the steep and rapid reductions needed in coal power generation to limit the rise in global average temperature to well below 2°C. It also puts at risk the prospect of an ambitious upgrade in China’s pledged emission reductions under the Paris agreement—currently pegged at peaking carbon dioxide emissions by 2030—and undermines the country’s potential role as a clean energy leader.” [p 12]

Energy Security

The analysis in the Out of Step report misunderstands the strategic focus of China’s energy transformation on guaranteeing energy security, based on diversifying the energy supply mix, and transforming the future development of the energy sector in China.

The need to prioritize energy security has become pressing due to the threats created by the anti-China policies of the US, exemplified by Trump’s trade war on China, and the destabilizing dangers of the US military posture in the Persian Gulf and elsewhere.

China is in the beginning of an energy transition with the aim of building a stable sustainable energy system for the future. At the 19th National Congress of the Communist Party of China, President Xi Jinping confirmed that China will promote a revolution in energy production and consumption. The country’s plans emphasize shifting economic development from high growth to high-quality growth, a paradigm shift that also applies to the energy sector. With the important milestones for 2020, 2035 and 2050, China plans to develop a “clean, low carbon, safe and efficient energy system”.Consistent with the “Three Revolutions” to promote economic development, China’s national energy administration applied this concept to the energy sector in 2018: Quality Revolution is about the optimization of existing and incremental energy mix by coal phase out and renewable expansion. Efficiency revolution promotes synergetic development of energy industries, as a result to improve the efficiency of the whole energy system. The dynamics revolution relies on technological and market oriented innovative strategies to drive and diversify energy sector development.

COMMENTARY

The key points picked up by the Western media from the Out of Step report were primarily the speculative, “what if” scenarios posed by the authors, should the recent “expansion” of coal power plants continue into the future.

It is important to note that the analysis in this report is of coal-fired generation capacity, not actual energy output from coal. The assumption is that if the capacity exists, it will inevitably be used.

That this assumption need not necessarily hold true, is demonstrated by the report’s discussion of the ability of the central government to enforce energy curtailment (under-utilise capacity) where needed. The report attributes the growth in capacity as being “due to the central government’s reluctance to rein in a province-level permitting boom, a large number of plants in advanced stages of construction are ready to be commissioned.” Again, the discussion is focused on coal based generation capacity.

However, the report’s conclusions do recognize:

“Yet the central government has also introduced measures that have significantly slowed the rate of new coal proposals and permits since 2016, and greatly increased coal plant cancellations. Thus China’s continued expansion of its coal fleet is not inevitable: the central government could strengthen its existing policies discouraging coal plant building, continue incentivizing low-carbon power over coal, and begin a transition toward clean energy. The path that China’s central government chooses could make or break Paris climate goals.” [p 14]

Provincial “permitting spree” and China’s central government response

In its introduction the report points out that “From September 2014 to March 2016, permitting authority was delegated [from the national level] to provincial leaders, who quickly accelerated the rate of new coal plant permits and construction to boost economic growth in their regions. In 2016, the central government responded to the provincial permitting spree by issuing a series of edicts aimed at restricting the development of new coal-fired power plants in the country, including suspending or stopping development of 169.5 GW of named coal plants in 2017.”

It goes on to say that “the central government has introduced measures that have markedly slowed the rate of new proposals initiated after the 2014–16 permitting surge: new coal plants no longer automatically receive the guaranteed operating hours they once enjoyed, and new coal permits have been broadly prohibited in many provinces.”

Since the permitting boom, newly proposed capacity have fallen by 80% and permits for new coal plants by 98%, while the level of cancellations has increased nearly 300%. However, there are still enough projects under development to continue growing China’s coal fleet for years, even with no new proposals.” [p 5]

The report notes that in 2016, the National Development and Reform Commission (NDRC) “began laying out a series of measures [see link in the report] aimed at reducing the amount of coal power capacity permitted or entering construction. In 2017, the central government named specific projects [see link in the report] in its restrictions, mainly projects in advanced stages of permitting or construction.” [p 8]

In fact 169.5 GW of coal power capacity was directed to suspend or stop development.

The report’s own analysis in July 2019 confirmed that 51 % of that restricted capacity was still not proceeding.

It again is important to note that the reports analysis refers to capacity, and that is taken to include not just new coal fired power station capacity commissioned and operating, but also that under construction and those that “have now progressed in permitting.” [p 9]

As the report observes, as part of the central government’s restrictions, the amount of coal plants allowed to come online since 2017 have been controlled. As a result, the “net additions to the coal fleet—newly commissioned capacity minus retired capacity—were 25.5 GW in 2018, the lowest annual increase … since 2004 (26.3 GW), before [the] coal-building boom.” [p 10]

Since the height of the permitting spree, the report found an 80% decline in newly proposed coal fired generating capacity between 2015–16 and 2018–19.”New construction has also fallen steeply since the permitting boom, declining 72% from 67.9 GW in 2015–16 to 18.7 GW in 2018–19. Meanwhile, cancelled capacity has increased nearly 300%, from 36.9 GW in 2015–16 to 145 GW in 2018–19.”

Source: Originally published by China Environment News, 23 November 2019. .

A link to the original Out of Step – China is driving the continued growth of the global coal fleet report can be found at: https://endcoal.org/global-coal-plant-tracker/reports/out-of-step/