Copenhagen, 27 October 2021:- China must provide clarity on whether its “international new coal projects exit” covers existing projects during this weekend’s G20 gathering in Rome, or run the risk of building outdated, unwanted climate-warming coal-fired electricity capacity, according to Just Finance International. The commitment to exit coal projects was made by Chinese leader Xi Jinping at the United Nations General Assembly (UNGA) in September .
OECD countries including the EU, Japan, Korea and others agreed last week to an immediate ban of the various forms of government financial support for international coal-fired power plants, making it the first internationally binding agreement that ends export support of international coal projects by the end of 2021 .
“In response to the OECD ban, China must introduce a timebound action plan on how to exit the over 30 GW of coal power plant projects and associated facilities its state-owned enterprises and banks finance and which may get built around the world”, said Wawa Wang, program director of Just Finance International.
A briefing released today by Just Finance International finds that while the completion rate of Chinese international coal projects is on the decline, and the cancellation rate of projects in a number of countries on the rise during the past year, there is still a risk that over 3,645 MW of newly announced deals from 2021 in Bosnia and Herzegovina, Indonesia, the Philippines, and Serbia, as well as over 10 GW of planned projects in six countries across Europe, Asia and Africa may receive financing or are at risk of being built and becoming operative.
According to monitoring by Just Finance International, financing and construction of Chinese companies’ overseas coal power stations and associated facilities, such as expansions of mines, often commences despite failing to meet the necessary legal environmental assessment and permitting requirements. Many of these coal power plant projects have been delayed due to being mired in scandals relating to problematic environmental, pollution and social impacts, or because of legal challenges – even if the projects reached a financial close with China’s state banks or investors years earlier.
“Deals concerning coal power stations that are not considered new – for example, planned, under construction, or stalled – must be included in the action plan as follow-up to China’s pledge, if it is to be taken seriously and on par with other international commitments that tackle the financing of international coal projects”, said Wang.
“While G20 countries gather to negotiate solutions for the global climate crisis at this week’s meeting ahead of COP26, China must commit to a time-bound action plan that addresses the fleet of overseas coal projects the country’s power generation companies have facilitated – otherwise, it runs the risk of rendering President Xi Jinping’s UNGA pledge on stopping the construction of overseas coal plant projects meaningless”, concluded Wang.
Wawa Wang, Just Finance International
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About Just Finance International
Just Finance works to ensure that the public budget spent globally on development and infrastructure finance is contributing to the advancement of sustainability for populations and the environment.
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