China vows to end funding for overseas coal-fired power plants
Although the leader did not set a timetable to end this funding, he noted that Beijing had not directed any funding from its Belt and Road Initiative towards coal-fired power plants so far this year.
Xi also did not address the domestic situation, where coal makes up the majority of the country’s electricity mix. Dozens of new coal-fired and steel-fired power plants across the country were announced in the first half of 2021. If built, they alone would add 150 million tonnes of annual carbon dioxide emissions, according to the group. Global Energy Monitor research team.
The pledge from China, the world’s largest emitter of greenhouse gases and the world’s largest funder of coal-fired power plants, has been greeted with caution by experts.
“This is the announcement China could make now and the one the United States wanted. Investments are already moving in this direction, ”said Joanna Lewis, associate professor at Georgetown University and an expert in Chinese climate policy, in a statement. Tweeter.
Climate advocacy movement 350.org called Xi’s statement “huge,” saying it could “be a game-changer” depending on when it goes into effect.
“China was the last man standing. If there is no public funding for coal from China, there is little to no global expansion of coal, ”said Justin Guay, director of global climate strategy at the Sunrise Project, an advocacy group. for a global transition from coal and fossil fuels.
Beijing has supported coal projects in developing countries, including Indonesia and Bangladesh, and has come under heavy diplomatic pressure to end funding intended to help the world meet the goals of the Paris agreement on the climate to reduce carbon emissions.
“We’ve been in discussions with China for some time about this. And I am absolutely delighted to hear that President Xi has taken this important decision, ”US Climate Envoy John Kerry said in a statement.
Downstairs but not outside
As countries around the world experience power shortages, BMO Capital commodities analyst Colin Hamilton said it’s clear thermal coal is likely to remain a key energy source for the foreseeable future. .
“China will continue to fund energy projects abroad, with a push to develop green and low-carbon energy projects, which could result in new nuclear facilities in addition to ‘renewable energy. “”, he wrote.
China’s engagement could affect both demand and supply in the maritime market and put pressure on prices in the long run, warned Wood Mackenzie, an energy and mining consultant.
According to WoodMac analyst Shirley Zhang, projects that are not financially committed and rely heavily on foreign investment, such as projects in Indonesia and Vietnam, would be hit the hardest.
“In particular, our hypothesis of 29 GW generic coal projects in Indonesia after 2025 could be threatened due to China’s commitment, forcing more supply of Indonesian coal to export markets,” he said. she stated in a statement sent by email.
China’s policy shift, which is part of a goal of peaking coal consumption by 2030 and carbon neutrality by 2060, follows similar pledges made by Japan and Korea from the South earlier this year.
The pledge, which could wipe out nearly $ 50 billion in investment, is expected to give momentum to global climate talks in November in Glasgow, Scotland.