China is planning on financing more coal-fired power capacity beyond its borders than Germany currently operates, according to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA).
In an interview at last year’s UN climate conference, Li Junfeng, director of China’s National Centre for Climate Change Strategy, said, “We can’t require a developing country that is less developed than China to start decreasing coal consumption now, that is not possible.” China is helping other countries meet their coal power needs with the cleanest ultra-low emissions technology, he said.
The IEEFA report shows that the Chinese-financed coal plants have become more efficient, with fewer of the most carbon-intensive plants under development. These concurrent trends of continued coal power development, but with more efficient technology, mirror China’s own energy trajectory. Although the move toward greater efficiency carries some environmental and health benefits, it still defies the call for global decarbonisation.
China’s overseas coal plant development looms large
China is not a new entrant to global coal power development. A study conducted by the Global Environmental Institute in 2017 found that between 2001 and 2016, Chinese companies and banks were involved in 240 coal projects overseas with a total capacity of 251 gigawatts. Analysing public finance alone, the Natural Resources Defense Council showed that China has been the largest backer of overseas coal power in recent years.
IEEFA’s new report pulls back the curtain on China’s future plans. Its involvement in coal projects does not appear to be flagging: Chinese financial institutions and companies have committed or proposed to finance one quarter of the coal plants under development outside of China – 102 gigawatts of capacity spread across 23 countries.
In some cases, China’s financial pledges come from the very top. Bangladesh and China signed off on four Chinese-financed coal power plants during Xi Jinping’s 2016 state visit. State-owned energy companies have also enjoyed high-level support from industrial policies encouraging their overseas expansion, backed by financial support from China’s policy banks, which can offer low-interest loans. Thanks CCTI.
