China Briefing, 23 September 2021: Xi’s ‘no overseas coal’ pledge; More orders on domestic coal; ‘Ball in China’s court’

China Briefing, 23 September 2021: Xi’s ‘no overseas coal’ pledge; More orders on domestic coal; ‘Ball in China’s court’

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Snapshot

China’s president Xi Jinping announced that the country “will not build new coal-fired power projects abroad” in his speech at the United Nations General Assembly on Tuesday. The news came as John Kerry, US president Biden’s climate envoy, told MSNBC that he would visit China “somewhere in the next weeks” – his third trip there in about six months.

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Separately, Xi gave new orders to the domestic coal industry while inspecting a factory last week. According to state media, Xi stated that coal is the country’s “main [source of] energy”, but added that the industry must develop in a “green, low-carbon” way. In particular, he called for technological innovation for the coal-to-chemical industry.

Elsewhere, Alok Sharma, president-designate for COP26, has said that the “ball is in China’s court” when it comes to ensuring the success of the Glasgow summit. Sharma made the remarks in two separate interviews with Sky News and the BBC. Sharma also noted that Xi had “not yet” confirmed his attendance at COP26, which is scheduled to start on 31 October.  

Key developments

Xi says China ‘will not build new coal-fired power projects abroad’

WHAT: President Xi said that China “will not build new coal-fired power projects abroad” on Tuesday in an address at the general debate of the 76th Session of the United Nations General Assembly (UNGA76). His 15-minute pre-recorded speech covered a range of topics, including the Covid-19 pandemic and global economic recovery. On climate change, Xi also stated that China “will step up support for other developing countries in developing green and low-carbon energy”. In addition, he affirmed that China “will make every effort” to deliver on its goals of peaking emissions before 2030 and achieving carbon neutrality before 2060, which were announced by Xi at the assembly last September.

HOW: Xi did not explain the meaning of “build” or “new coal-fired power projects” in his remarks. Nor did he mention how and when China plans to fulfil the commitment. When asked by a Bloomberg reporter yesterday if Xi’s announcement included an end to financing for overseas coal projects, Zhao Lijian, a spokesman at China’s Ministry of Foreign Affairs, suggested that the journalist ask “the department in charge”. The Chinese government has yet to give an official interpretation of Xi’s message. 

WESTERN COVERAGE: BBC News said that Xi’s announcement “could limit the expansion of coal plants in many developing countries under China’s Belt and Road Initiative (BRI)”. Analysis by its Shanghai correspondent, Robin Brant, described the pledge as “low-hanging fruit in terms of China’s addiction to coal”, noting that “half the coal burned in the world is burned in China”. Politico interpreted Xi’s words as “end[ing] the flow of cash”, calling the pledge “a move that would cut off a key source of financing for the fuel most responsible for climate change”. Reuters said that “depending on how the policy is implemented, the move could significantly limit the financing of coal plants in the developing world”. The Daily Telegraph wrote that Xi “didn’t say anything about what China…would do about its continued coal investments at home”. But it noted that the announcement “indeed puts Mr Xi on better footing” ahead of COP26. Many other outlets, including CNN, the Guardian and the Financial Times, covered the story.

CHINESE COVERAGE: China’s media has lauded Xi’s speech. CCTV, the state broadcaster, ran the section of Xi’s remarks about China’s climate action with dramatic background music and shots of solar panels and wind turbines. The clip was reposted by various other state-run outlets, including China Daily and China News Service. Xinhua, the state news agency, interviewed Dr Ruan Zongze, executive vice president of the China Institute of International Studies. Ruan called Xi’s pledge “another remarkable step taken by China on its own initiative to cope with the global climate change”. Global Times, a state-run tabloid, said in an editorial that, compared to Biden’s speech, Xi’s address showcased that Chinese leaders were “broadminded”. It noted that Xi’s pledge “is widely regarded as China’s latest significant promise”. Guancha, a news and commentary website, cited “foreign media” and said that the commitment made by Xi was “recognised”, but it would leave “other emerging economic bodies between a rock and a hard place”. 

GLOBAL RESPONSES: António Guterres, secretary-general of the UN, said that he welcomed Xi’s announcement that “China will end financing of coal fired power plants abroad & redirect support to green & low carbon energy”. (Xinhua quoted Guterres’s statement, but did not say if his interpretation of Xi’s words was correct.) John Kerry told MSNBC that Xi’s pledge was “an important contribution to building momentum to make the meeting in Glasgow [COP26] a success”. Alok Sharma tweeted: “I welcome President Xi’s commitment to stop building new coal projects abroad – a key topic of my discussions during my visit to China.” Simon Stiell, the environment minister of Grenada – a member of the Small Island Developing States – said President Xi’s pledge “is an important step by the world’s biggest provider of overseas coal finance,” according to the New York Times

WHY IT MATTERS: Wu Changhua, chief executive of the Beijing Future Innovation Center, told Carbon Brief: “While China has been leading in clean-coal technologies and super-low emissions from coal-fired power plants, intensifying climate change demands an immediate end to fossil fuel capacity.” She said that Xi’s pledge “definitely adds more clarity to the country’s 30-60 carbon neutrality agenda”. A recent report by the Beijing-based Green Belt and Road Initiative Center found that China did not finance any coal projects via the BRI in the first half of 2021. On the topic of China banning overseas coal projects, Edmund Downie, a non-resident fellow at the SIPA Center on Global Energy Policy of Columbia University in the US, told Carbon Brief last month: “China has been hesitant about making a public commitment that squeezes its developing country allies. But the actual impact on Chinese firms and Chinese outbound investment would be limited.”

Xi calls for ‘low-carbon’ development for domestic coal

WHAT: Days before Xi’s speech at UNGA76, he had already issued new directives on the development of coal domestically. During a visit to a chemical factory on 13 September, Xi underscored coal as China’s “main [source of] energy”. He ordered the coal industry to develop in a “green and low-carbon” direction that would match the country’s climate goals. In particular, Xi described the coal-to-chemical industry as having “great potential and promise”. He urged workers to increase the “utilisation efficiency” of coal as a chemical raw material. Xinhua reported on his speech. 

WHERE: Xi addressed workers at a state-owned chemical factory in Yulin in northern China’s Shaanxi province. Shaanxi was the third-largest coal-producing province in the country in 2020, producing 679m tonnes of coal, according to official figures. Yulin is home to Shenfu Coalfield, which is described as “one of the seven largest coalfields in the world”. It also has China’s first “national-level energy chemical base”, built in 1998.

EXPLANATION: Xi said the development of coal must “be based on the country’s situation, control the total volume, stick to the bottom line, reduce quantity and replace orderly and push forward the transition and upgrade of coal consumption”. Prof Yuan Jiahai from North China Electric Power University shared with Carbon Brief his understanding of Xi’s order: “A straightforward understanding is since [China] still needs to rely on coal for a long time, [we] must control the total [consumption] of coal, plan pathways to reduce and replace [the consumption] clearly and push for the transition and upgrade for the [amount of] coal [we] have to use.” 

MORE EXPLANATION: Regarding Xi’s instruction on the coal chemical industry, Prof Yuan said that, in his opinion, Xi was not referring to the high-emission, high-water-consuming and high-polluting businesses in the traditional coal-to-chemical industry. He believed that Xi was calling for the development of “new types of coal-based speciality materials”. Xi directed the country to “actively develop coal-based speciality fuels, coal-based biodegradable materials and so on”. Prof Yuan said that under the carbon-neutrality goal, the use of coal as a fuel would be “greatly restricted and gradually eliminated”. He added: “In the long term, coal has the prospect of switching from being a fuel to being a raw material.”

WHY IT MATTERS: Xi’s instructions came after China’s top decision-making body urged officials and companies of all levels to “rectify campaign-style ‘carbon reduction’”. Also, last week, China’s state macroeconomic planner released a scheme to “improve” the country’s “dual-control” policy – which sets targets on total energy consumption and energy intensity (the energy use per unit of GDP). Prof Yuan said: “The message sent out by China to the [domestic] coal industry is very clear: Under the precondition of a gradual phaseout, [we must] control the total consumption, ensure the peaking of emissions on schedule and avoid ‘charging towards’ the carbon peak; however, as coal is still the basic source of energy, its supply must also match the needs of economic development to guarantee energy safety.” 

Other news

COP26: Alok Sharma told Sky News’s Trevor Phillips On Sunday show that he had had “constructive and very frank discussions” with Chinese officials in Tianjin. He added: “In every conversation I had with the Chinese, they were very clear that they want to see COP26 as a success, so the ball is very much in their court.” He gave a similar comment on the BBC’s Andrew Marr Show. On the other hand, China’s state media has already said that the outcome of COP26 depends on whether “the UK and the global community” would “allow Washington to hijack the summit for its ill geopolitical intentions”.

ON XI: Asked by Trevor Phillips of Sky News if Xi had confirmed to come to COP26, Sharma said “no, not yet”. Speaking to Andrew Marr, Sharma said Xi’s attendance had “not yet been confirmed”. He also noted: “I am very very hopeful that we will also have a delegation from China that’s coming…We want China there as part of the negotiations and I do feel that they will come for that.” The Sunday Times reported in July that UK prime minister Boris Johnson had personally invited Xi to COP26.

KERRY: John Kerry, the US special presidential envoy for climate, has said that he will visit China again soon for more climate diplomacy. Kerry said on MSNBC’s Morning Joe show yesterday: “I am gonna be going back to China somewhere in the next weeks to follow up on the conversation that president Xi and president Biden had.” The two leaders discussed climate change – among many issues – on the phone earlier this month. Kerry has been to China twice this year: in April and early September.

JOHNSON: Boris Johnson has called on China to phase out the domestic use of coal following Xi’s pledge to stop building new overseas coal-fired projects. Johnson said in a speech at UNGA76 yesterday: “I thank President Xi for what he has done to end China’s international financing of coal and I hope China will now go further and phase out the domestic use of coal as well, because the experience of the UK shows it can be done.”

CENTRAL INSPECTION: China’s environmental inspection team has criticised Liaoyuan city in Jilin province for failing to hit its “dual-control” targets. During an investigation this month, the Central Ecological and Environmental Inspection Team (CEEIT) also found that the city had “obvious problems” in allowing “illegal” projects with “high” energy consumption and “high” emissions to run. The Ministry of Ecology and Environment announced the news in a release. Read Carbon Brief’s Q&A to understand the significance of such inspections.

RAIN: The city of Beijing has seen more rainfall this summer than the same season of the past 20 years. The areas around the Chinese capital have also experienced more precipitation events this year. Experts said that a combination of climate factors – including global warming, El Niño, La Niña, sea temperatures and subtropical high – have led to increased rain in northern China. Another possible cause is that China’s precipitation line has moved northwards because of global warming. Beijing News reported the story. 

Extra reading

New science

Residual flood damage under intensive adaptation
Nature Climate Change

A new study has evaluated “residual flood damage” (RFD) – the unavoidable increases in river flooding even after affordable adaptation measures have been put in place. Using a flooding model and cost–benefit analysis, the researchers found that China, India and Latin American countries “can achieve higher levels of flood protection that will reduce RFD even under extreme scenarios”. However, they noted that a high RFD (exceeding 0.1% of a region’s GDP) would remain, “especially in eastern China”. This residual risk is, in part, because damage would occur while flood defences are being constructed, Dr Masahiro Tanoue from the National Institute for Environmental Studies of Japan, lead author of the paper, told Carbon Brief. This can be reduced by “shorter construction periods or lower adaptation costs”, the paper added.

Policies and Institutions to Support Carbon Neutrality in China by 2060
Economics of Energy and Environmental Policy

A new paper has reviewed China’s environmental and climate policies over the last two decades. It found that central planning and targets adapted to the country’s administrative hierarchy have been most prevalent, supported mostly by command-and-control policies at the sectoral level. The study also found that in order to achieve much deeper reductions required by the carbon neutrality goal, market-based mechanisms will likely grow from a minor supplement to an important pillar of cost control – once there is broad participation and buy-in to long-term plans.

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