eBusiness Weekly
David Dodwell
It seemed we all agreed: the highest priority in battling global warming is to cut the use of fossil fuels, coal in particular. So, it is perplexing to see that coal consumption rose last year, and continues to rise today.
Even more perplexing is that the main culprit is China, giving its critics yet more ammunition. It’s no surprise, then, that Group of 20 climate negotiators in Chennai last week were, according to the Financial Times, fuming at China for refusing to debate crucial issues such as methane emissions and reduced use of oil, gas and coal.
Concern over China’s progress in reducing carbon dioxide emissions is perfectly legitimate. As the International Energy Agency’s (IEA) latest China energy-sector road map made clear, “There is no plausible path to limiting global temperature rise to 1.5 degrees without China.”
As the world’s largest energy consumer and carbon emitter, accounting for around a third of global carbon emissions, the IEA said, “No pledge [to reduce emissions] is as significant as China’s.”
The problem is that China presents an uncomfortable paradox. It has made great progress in developing renewable energy. By 2024, it is expected to account for 50 percent of the world’s new solar power projects, 60 percent of new onshore wind and almost 70 percent of new offshore wind.
In 2022, it accounted for 49 percent of renewable energy capacity added worldwide. It is also by far the leader in putting electric vehicles on the road. China was home to 14,1 million electric vehicles in 2022, compared to just 2,96 million in the US and 1,89 million in Germany.
It has invested more in clean energy than any other country, spending US$546 billion in 2022 on investments that included solar and wind energy, electric vehicles and batteries. That is nearly four times the US$141 billion spent in the US and three times Europe’s US$180 billion.
But, at the same time, China remains the dominant source of carbon dioxide emissions, generating 12,1 gigatonnes last year — more than twice the 4,7 gigatonnes generated by the US and accounting for almost a third of the global total. This is in large part because it continues to be by far the world’s largest producer and user of coal.
The IEA estimates that China’s coal demand will grow 3,5 percent this year to 4 679 megatonnes, about 56 percent of global coal demand and far ahead of the second-largest consumer India’s 1 212 megatonnes.
A large proportion of this coal is used in electricity generation, even though the progress being made in developing renewable energy raises questions about the need to add any new coal-fired plants.
This raises a troubling conundrum. Why is China willing to attract so much global criticism on coal, inflicting damage on its green credentials, given its progress on development of clean energy?
One factor could be simple cantankerousness. President Xi Jinping said at a national conference on ecological and environmental protection earlier this month that China’s commitments to reducing emissions and reaching carbon neutrality “are unswerving” but that “the path towards the goals as well as the manner, pace and intensity of efforts to achieve them should and must be determined by the country itself, rather than swayed by others”.
Part of the surge in coal consumption is also undoubtedly down to China’s economic recovery as it emerges from the Covid-19 pandemic. But a third — and potentially more important — factor is Beijing’s anxiety over energy security.
This is part of broader anxiety over national security that has intensified over the past four years of US-China tensions. Beijing’s position seems to be “security today, low carbon tomorrow”, combined with a curmudgeonly unwillingness to be told what to do by anyone else.
Another factor driving China’s investment in coal — it added more than 100 gigawatts of coal-fired generation capacity last year, the equivalent of two large power plants a week — is anxiety over the reliability of solar and wind power generation as the country continues to bolster its power transmission infrastructure, battery storage and flexible grids.
There is an acute awareness of the need for coal-fired plants to be on standby in case poor wind or periods of cloudy weather jeopardise the reliability of wind or solar power. Recent shortfalls in hydropower have aggravated such reliability concerns.
If the build-up of new coal-fired plants is mainly to provide standby capacity, then concern over further increases in China’s carbon dioxide emissions might not be justified. Additional coal-fired power plants would be part of an insurance policy in case there is a hiccup in the development of renewables.
Clean energy has overtaken fossil fuels in the past year to account for more than half of the country’s installed power capacity. There are reports China will add 870 gigawatts of power through to 2025, compared with original targets of 570 gigawatts.
For all its brittle and curmudgeonly talk, the reality is that China is still the global pacesetter in reducing carbon emissions, and one must hope its fondness for coal will soon expire.
If other major emitters such as the US and Europe were to match its pace, the chances of bringing global warming under control would be greatly enhanced.
David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades.
