One of the big climate wins of 2021 was the announcement from China, Japan and South Korea that they would no longer fund new coal plants overseas. For China, this was massive: the country had long been the biggest funder of coal plants worldwide, with these projects forming a significant strand of its Belt and Road Initiative.
China’s vast industrial base has been developed off the back of coal-fired power generation, and the significant coal expertise that exists in the country is a big export opportunity. “There are too many state-owned enterprises specialising in coal construction that compete against each other domestically,” says Wawa Wang from the NGO Just Finance International. “It is only natural they would spread abroad.”
China has continued to back new coal plants since its pledge to stop doing so in September 2021, finds research from Just Finance International. Some 3.6GW of projects across Indonesia, Bosnia-Herzegovina and other countries, which were announced before the 2021 pledge but had not yet begun construction, are all still in development. Separate analysis by Just Finance International finds that Chinese state-owned enterprises (SOEs) scored over $18bn of contracts for 67 unidentified overseas coal-fired power projects in 2021 alone, many of which remain at an early stage of development.
Wang adds that Chinese financial institutions are not required to disclose details of loans issued around the world, and as a non-OECD country, China is not obliged to disclose public investment data. “There is also no way of screening utility companies that receive Chinese investment to make sure that financing is not being directed towards coal projects,” she says.