In 2021, Chinese President Xi Jinping made a commitment to stop funding overseas coal power plants in an effort to curb climate change. Five years later, a new report has found that China has cancelled 67% of the coal power capacity it had planned to build overseas. This translates to 61.5 gigawatts of cancelled projects, which is estimated to have avoided 6.4-billion tonnes of lifetime carbon dioxide emissions.
Despite this progress, experts have warned that Chinese companies are taking advantage of regulatory loopholes to skirt Xi's promise and continue investing in overseas coal. The report by the Centre for Research on Energy and Clean Air and the People of Asia for Climate Solutions found that Indonesia has seen a boom in coal plants funded by Chinese companies to power heavy industries.
Indonesia takes the top spot for continued Chinese investments, with 17.1 gigawatts of China-backed coal capacity planned. Vietnam and Pakistan are a far second and third with less than 4 gigawatts in the works. The report's findings have raised concerns that China's commitment to phasing down coal is being undermined by commercial interests.
China's role in the global energy landscape is significant, as it is the world's largest annual emitter of carbon dioxide and the largest overseas coal financier until Xi's 2021 promise. However, China is also the global leader in electric vehicle, solar panel, and wind turbine manufacturing, and is setting the tone for the transition to renewable energy across Asia and Africa.
The energy transition is complicated by the need for energy security, particularly in regions such as Southeast Asia, which has been heavily impacted by the Russia-Ukraine War and the Iran war. The region accounts for nearly 20% of global energy demand growth through 2035, according to the International Energy Agency.
Experts stress that both China and its partners must be equally committed to phasing down coal. Li Shuo, director of the Asia Society Policy Institute's China Climate Hub, said that the growing desire among countries in Southeast Asia to secure reliable energy supplies could bring about another round of coal fever.
The report's findings have implications for the global effort to counter climate change, which has driven deadly disasters in Asia in recent months. As the world grapples with the challenges of energy security and climate change, China's commitment to renewable energy and its role in shaping the global energy landscape will be closely watched.
Key points
- China has cancelled 67% of its overseas coal power plant plans, but loopholes are allowing Chinese companies to continue investing in coal.
- Indonesia has seen a boom in coal plants funded by Chinese companies to power heavy industries.
- Experts stress that both China and its partners must be equally committed to phasing down coal to achieve global climate goals.
