Chinas exit from offshore coal is at once momentous and insufficient
Xi Jinping’s announcement to the UN that China will no longer fund new offshore coal plants only adds momentum to a global movement of powerful institutions and governments seeking to rapidly end the use of the world’s dirtiest power source.
A coal-fired power plant on the Yangtze River in Nantong in eastern China’s Jiangsu province.Credit:AP
Since 2000, China has invested $55 billion in coal projects across Asia and southern Africa in what is the world’s largest infrastructure project, the Belt and Road Initiative.
Since Joe Biden was elected US President, global momentum on climate change has quickened, but observers feared it may dissipate due to the worsening relationship between China and the US.
Xi’s announcement in the lead up to United Nations COP26 climate talks in Glasgow is seen by many as evidence that China is still determined to act on climate change
“This will have very big implications globally,†said Bill Hare, director of Climate Analytics, a global climate change think tank and data centre.
“This is just going to deepen the trend away from thermal coal globally and therefore impact negatively on [Australian] thermal coal markets.â€
However, Xi’s announcement does not include China’s onshore coal power industry.
Signals from Beijing on coal have been mixed, with Xi saying he supports a move away from coal even as the nation builds more domestic coal plants as some provincial governments seek to benefit from cheap energy and the economic stimulus of construction.
Hare says it is possible that with the end of funding to Chinese offshore, there will be increased pressure from the industry and its lobby to turn to domestic projects.
If the Chinese government were fully committed to climate action, it would need to commit to having its carbon emissions peak by the mid-2020s, said Mr Hare.
Thom Woodroofe, a former climate diplomat and a fellow at the Asia Society Policy Institute, said Xi’s announcement was further evidence that China now accepts that the future of energy is renewable, but that it will have to do more to win global support for its climate efforts.
“Until China is prepared to draw a similar line in the sand on its construction of coal-fired power plants at home, it is unlikely to be met with the fanfare Beijing might hope,†he said.
In an analysis published in May, the International Energy Agency said that if the world were to have an “even chance†of holding global warming to 1.5 degrees, all funding of new fossil fuel infrastructure would need to stop this year.
On September 14, the US Treasury announced its support of an OECD proposal to end financing for coal power, joining Canada, the European Union, South Korea, Norway, Switzerland, and the United Kingdom as co-sponsors.
Nick O'Malley is National Environment and Climate Editor for The Sydney Morning Herald and The Age. He is also a senior writer and a former US correspondent.Connect via email.