China will no longer finance overseas coal power projects

China will no longer finance overseas coal power projects

Xi Jinping announced on Tuesday that China will not finance overseas coal projects — move which could have far-reaching consequences for the US s ability to meet climate targets.

China will step up support for others in developing green and low carbon energy and will not build new co-fired power projects abroad, Xi said during prerecorded remarks to the United Nations General Assembly.

Experts say the move could mark the beginning of the end of coal as a primary energy source for the world it is currently no. The caveat is that China and many other nations remain reliant on coal.

This announcement is a strong sign of coal's global collapse, says Durand D Souza, a data scientist with the Climate think-tank Carbon Tracker. China is the top financier of new coal power worldwide and the recognition that it is no longer desirable is welcomed. Coal-fired power plants have been a major part of the Belt and Road Silk Road infrastructure beltway, an initiative by Xi that has been touted as a modern version of the Belt and Road. China has financed hundreds of coal-producing countries from Egypt to the Philippines. The Chinese state media has defended China s past financing of coal plants overseas — especially in countries where reliable electricity is a problem.

The shift is also underway: China did not fund any coal projects around the world in the first half of 2021, so Xi s announcement will turn something that is already happening into a formal policy.

Much of the developing world still faces genuine issues with energy security, says Li Shuo, the Senior Global Policy Advisor for Greenpeace in Beijing. Today s announcement should propel China to become part of the solution. China continues dependent on coal power domestically, and is the world s largest emitter of greenhouse gases. In 2020, the country combined more than 53% of the world total coal-fired power, according to climate change research group Ember.

And China will build 43 new coal-fired power plants and 18 new blast furnaces — equivalent to adding about 1.5% to its current annual emissions — according to a report released by the U.S. research organization the Centre for Research on Energy and Clean Air CREA in Helsinki last month.

Xi said that the country would reduce coal use beginning in 2026 and Beijing has set climate targets — committed to bring its emissions to a peak before 2030 and to make the country carbon neutral by 2060.

D Souza of Carbon Tracker says that China could go further and focus its efforts internally by cancelling its plans to build 163 GW of new coal power in favor of renewable energy. The country is a renewable energy leader, accounting for about 50% of the world's growth in renewable energy capacity in 2020. The most powerful and populous nation is also in front of solar energy technologies which include electric vehicles, batteries and battery packs.

When is it time for China to move away from being the largest coal power producer and continue its shift towards lower-cost renewables?

The announcement could have major ripple effects:

Important questions remain including how and when the announcement will be implemented, and whether it will only apply to state-run banks, but experts say Xi s pledge is a positive signal.

Li says that the announcement will contribute to higher quality growth in countries participating in China s Belt and Road Initiative. The announcement will also help the global transition from coal, a critical signal needed before COP 26, he says.

John Kerry called the Glasgow climate summit, in November. This summit will give Britain a go ahead to plan the world and bring back coalescing energy into the right direction. John Kerry s trip to China by S. Climate Envoy Stevenson is negative for climate change, says the U.S. Consulate General.

In response to Xi s announcement, Antonio Guterres the secretary general of United Nations said that the immediate phaseout of coal is the single most important step to keep the 1.5 degree goal of the Paris Agreement in reach. The Paris climate accords, approved in 2015, calls on countries to do their best to reduce emissions to keep global temperatures below 2 C above pre-industrial levels — and preferably no more than 1.5C — so as to evade the worst consequences of climate change.