Advertisement
Green finance
BusinessCompanies

China’s carbon reduction target looks elusive as banks keep throwing cash at coal mines and power plants, undercutting Xi Jinping’s plan to slash fossil fuels

  • China commissioned 38.4 gigawatts (GW) of coal plants in 2020, three times the 11.9GW fired up by the rest of the world
  • 60 of the world’s largest banks lent or underwrote US$752 billion of debt or equity issuances to the fossil fuel industry last year

Reading Time:7 minutes
Why you can trust SCMP
8
China’s carbon reduction target looks elusive as banks keep throwing cash at coal mines and power plants, undercutting Xi Jinping’s plan to slash fossil fuels
Eric Ng

On an unseasonably warm autumn day last October, the world’s largest coal-fired power plant fired up in the Anhui provincial city of Huaibei in eastern China.

Sitting in an economic development zone carved out of verdant paddy fields, phase two of Shenergy Group’s Pingshan power plant is installed with 1,350 megawatts of generation capacity, enough to meet the annual needs of 1.1 million households. Almost four years after receiving the construction approval, the plant was formally connected to the national grid in mid-December.

The plant, boasting state-of-the-art technology that requires only 251 grams – a global record for efficiency – of coal for each unit of electricity generated, was hailed as a “national demonstration project” by local authorities and the media. Firing it up 12 weeks after President Xi Jinping’s surprise pledge at the United Nations General Assembly for China to become carbon neutral by 2060, it also sits uncomfortably as a reminder that the world’s second-largest economy needs to walk a fine line between its environmental commitments and its development needs.

The Chinese government and the nation’s state-owned power producers have set aggressive goals on renewable energy, but plans to retire or rein back coal-powered plants – they produce a third of China’s carbon emission – failed to keep up. China commissioned 38.4 gigawatts (GW) of coal plants in 2020, three times the 11.9GW fired up by the rest of the world, according to a February report by the Global Energy Monitor in San Francisco and the Centre for Research on Energy and Clean Air (CREA) in Helsinki.

An undated photo of Phase Two of Shenergy Group’s Pingshan coal-fired power plant in the Anhui provincial city of Huaibei.
An undated photo of Phase Two of Shenergy Group’s Pingshan coal-fired power plant in the Anhui provincial city of Huaibei.

After accounting for shutdowns, China’s net addition last year was 29.8GW, compared with the world’s net reduction of 17.2GW. The pace of construction approvals have also tripled to 36.9GW last year alone, five times more than those initiated outside China, according to the report.

“That has put the central government’s emphasis on new climate commitment in a bad light,” said Greenpeace East Asia’s climate and energy project manager Zhang Kai in Beijing.

Advertisement