China’s funding for overseas coal projects under construction to release 300 million tonnes of emissions a year, climate experts say
- Guidelines on the greening of the Belt and Road Initiative provides clarity on Xi Jinping’s pledge to stop building new coal power projects abroad
- China’s cooperation on green infrastructure and renewable energy will help its partner nations improve their capacity to respond to climate change
China’s decision to stop funding new coal power projects overseas has been welcomed by climate experts, but they were equally disappointed by Beijing’s commitment for projects already under construction, pointing out that this could lead to 300 million tonnes of carbon emissions a year.
It is the first official document to provide clarity on Chinese President Xi Jinping’s pledge last September to stop building new coal power projects abroad.
China will also strengthen cooperation with BRI countries in the areas of green infrastructure, renewable energy, green transport and green finance to help its partner nations improve their capacity to respond to climate change, according to the NDRC document jointly published with the ministries of foreign affairs, environment, and commerce.
“This guidance is an ambitious vision of coordinated, green and low-carbon overseas engagement – in that sense [it is] possibly the most ambitious climate-oriented framework to date by any country guiding their overseas activity,” said Cecilia Han Springer, assistant director of Global China Initiative at the Boston University Global Development Policy Center.
However, the decision to fund those already under construction could still cause heavy emissions, said Springer, adding that if all coal plants under construction come online, they could emit up to 300 million tonnes of carbon dioxide emissions a year, roughly equal to Spain’s annual emissions.
China, the largest international financier of coal projects during the last decade, is currently supporting around 50 gigawatts (GW) of overseas coal plants under construction and another 50GW under planning but yet to break ground, according to data from the Global China Initiative.
Lauri Myllyvirta, lead analyst at Helsinki-based Centre for Research on Energy and Clean Air, feared that some of the coal investments might shift to oil and gas-fired power projects, or other heavy industries, which are only marginally less emitting.
“It is another nail in the coffin for coal, which must be phased down as fast as possible to keep a chance at avoiding the most dangerous impacts of global warming,” said Liu Shuang, senior associate at World Resources Institute (WRI).
If the funds are shifted to renewable energy, it cannot not only avoid potential emissions, but also meet the increasing energy needs in Belt and Road countries, said Liu.
While the NDRC announcement did not provide clarity on green projects that would be covered, Byford Tsang, senior policy advisor at the European climate change think tank E3G said it would open up opportunities for global coordination in green development, and help spark constructive competition among international donors in providing more financial support for energy transition in developing countries through initiatives like European Union’s Global Gateway.
China currently provides about US$10 billion annually to support renewable energy abroad through the Belt and Road Initiative, according to E3G.
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What is China doing about climate change?
As the world’s largest manufacturer and developer of clean energy, China can play a key role in enabling many belt and road countries’ clean energy ambitions, said David Fishman, a manager at energy consultancy The Lantau Group.
Analysts said this would require more policies from host countries that can result in more sustainable energy project opportunities aligned with development and environmental targets.
“China has set the tone, so now is the moment for parallel leadership from the US and Europe on their respective overseas development frameworks – B3W and Global Gateway,” said Boston University’s Springer.
