China’s changing coal habits amid air pollution control and climate goals

China’s dynamic economic growth is fuelled mostly by coal. In the last years China consolidated its role of both top global coal producer and importer.

According to the World Coal Association, in 2013 China’s coal production made more than half of the global coal output: 3561Mt over a global 7823Mt, dwarfing US production, the second in the list, that amounted to 904Mt. In the same year, China imported 327Mt of coal, more than what India and South Korea (other two well-established emerging economies) imported together. According to WCA latest data, coal provides for 81 percent of electricity generation in China, a pretty steady figures in years.

Some months ago hints of change started to show up, suggesting the current situation may not last much longer.
In September 2014 the Chinese State Council, the country’s chief administrative authority, published a draft document with revisions to the Air Pollution Law considering mid- and longterm targets to cap coal consumption and to reduce the share of coal in the country’s energy mix. In November, the central government released an energy development plan to limit coal consumption to 4.2 billion tons of coal by 2020 (an actual 16.3 percent increase respect to 2013), Shangai Daily reported. In January this year Chinese government officials announced that an energy strategy set to lower the share of coal in total energy consumption would be included in the upcoming 13th Five-Year Plan (2016- 2020), that no new coal projects would be approved in the eastern regions Chinese provinces and that a five-year moratorium has been placed on new coal projects in the western Shanxi province. According to recent figures by the China Coal Industry Association reported by Reuters, China coal production is estimated to have fallen 2.5 percent in 2014, the first annual drop in more than a decade.

Although it may be premature to consider a single annual figure as signal of a durable pace, some analysts suggested the trend could become steady in the future as the central government has already set the tone to curb air pollution. Reasons behind the prospective turning point in Chinese long-lasting reliance on coal cannot only be attributed to the new tone on climate policy disclosed with US-China joint climate agreement of November 2014 (in which China’s President Xi Jinping pledged to peak CO2 emissions and to increase the share of non-fossil fuels in primary energy consumption to around 20 percent by 2030) but also to the decisive action Beijing is taking to curb pollution affecting many Chinese cities and industrial provinces.

Earlier in 2014 the National People’s Congress adopted the first changes to the environmental legislation in 25 years, imposing tougher penalties on polluters. The revised law came into effect from January 1, 2015 and sets environmental protection as the country’s basic policy, establishing that economic and social development in China should be coordinated with environmental protection.

However, tackling air pollution will have concomitant benefits in curtailing CO2 emissions only to a certain extent, according to analyses by MIT-Tsinghua China Energy and Climate Project. The study found that air pollution control efforts “can help China reach its near-term CO2 reduction goals, and vice versa, but co-benefits diminish over time as ever greater reductions are required”. According to the study, “a carbon price will be needed to achieve continued reductions in carbon intensity and reach the 2030 peak carbon goal”.

 

A previous version of this article was published under ICCG International Climate Policy and Carbon Markets series, issue n.34, accessible in pdf format.

(Image: Air pollution in Anyang City, Henan Province, China, Jan. 2015. Photo credit: V.T. Polywoda on Flickr)