Grid: China’s promise to stop building coal plants overseas is full of caveats and loopholes

China’s promise to stop building coal plants overseas is full of caveats and loopholes
China’s promise to stop building coal plants overseas is full of caveats and loopholes

Lili Pike, Grid, 28 April 2022:

China announced the ban last year, but Chinese companies are still pursuing carbon-intensive coal projects abroad.

China, the world’s largest coal producer and consumer, has doubled down in recent years on plans to burn the polluting fuel — despite government pledges to fight climate change. New research shows more than half the coal plants under development today are in China. That trajectory clashes directly with warnings from the world’s top climate scientists, who say that coal consumption needs to be cut by more than three-quarters by 2030.

A silver lining emerged last year when Chinese President Xi Jinping told the United Nations General Assembly that China would no longer back foreign coal projects. “China will step up support for other developing countries in developing green and low-carbon energy and will not build new coal-fired power projects abroad,” Xi said.

The new policy was welcomed by environmental groups and made headlines around the world — and for good reason. China has provided more financing for global coal power plants than any other country. Chinese state-owned development banks alone have lent $31 billion to coal plants in 18 countries over the last two decades. Currently, Chinese banks and companies are involved in 86 coal power projects abroad, according to a recent analysis. Once completed, those power stations would emit the equivalent of Australia’s annual carbon pollution. If China wasn’t ready to cut its domestic coal burning, preventing those emissions would still represent a meaningful step.

But in practice, China’s much-publicized policy shift has fallen short of what climate advocates had hoped for. The power of the pledge hinges on what Xi meant when he said China wouldn’t build “new” power plants abroad. It turns out, based on a subsequent Chinese policy document, that Chinese companies can continue pushing ahead with any projects currently under construction.

“I think the pledge is quite limited because it addresses the ‘new’ aspect only,” said Wawa Wang, program director of Just Finance International, adding that the government’s definition of “new” allows China to continue building dozens of plants.

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