A new report from the Institute for Energy Economics and Financial Analysis has revealed China to be a major driving force funding coal projects outside China. In many cases China is using inefficient technologies no longer permitted inside the country itself. Even among advocates of coal power, the data raises difficult questions about why China continues to export outdated “subcritical” technology to its partners alongside more modern methods of power generation.
While Western leaders often face blowback for proselytizing to emerging economies on the immorality of using the energy sources they themselves used to power paths to industrialized prosperity, China’s willingness to build plants using the most outdated and harmful forms of coal-fired power generation is short-sighted.
The importing countries could find themselves heavily indebted to China and saddled with increasingly obsolete energy infrastructure, while the long-term climatic consequences could be disastrous — and avoidable.
China has made great strides since it announced a renewed commitment to environmental responsibility more than five years ago. The government has invested significant sums in renewable energy. Last year, it spent more on the sector than the United States and the European Union combined and now produces 40 percent of global renewable supply, up from 34 percent just three years ago.
Those efforts to go green have been matched by a concurrent recalibration in the coal sector, with Chinese officials pledging to reduce carbon emissions from coal by 40 percent by 2020. The country has shifted to high-efficiency, low-emission forms of coal-fired energy generation and boasts many plants that are far cleaner than anything operating in the United States, operating under stricter limits on air pollution than those in America. That is not to say that a coal-powered China is a thing of the past: the country accounted for more than half of global consumption in 2017.
However, even as the Chinese government is making domestic policy changes, foreign dealings are a different story. Between 2001 and 2016, China was involved in 240 coal-fired projects in countries participating in its Belt and Road Initiative. The Institute for Energy Economics and Financial Analysis found that Chinese investment in overseas coal power plants in 2018 accounted for 26 percent of the global total, with almost a quarter of those projects employing “subcritical” technology that results in high emissions and, as a result, is no longer in use in China.
This dichotomy between cleaning up China’s domestic power sources, while exporting its most polluting ones, can most likely be explained by Chinese energy firms deciding to peddle their wares abroad to escape the constraints of government policy at home. Regardless of the reasons behind it, the practice is likely to have serious implications for the long-term viability of Chinese investments. Concerns over emissions and pollution come on top of budgetary questions; the Institute for Energy Economics and Financial Analysis report found evidence that 27 countries would be unhealthily indebted to China if the plans go ahead.
The difficulty for countries in the developing world is one of necessity. Given that significant swaths of the population in the Global South remains without electricity (an estimated 460 million in Asia alone), Western critics of fossil fuels find themselves up against a complicated picture of energy poverty on the ground.
Instead, the priority for these countries is generating supply to meet a demand that is expected to rise 30 percent globally by 2040 and by 70 percent in South East Asia. As IEA executive director Fatih Birol explained during a recent roundtable at Davos, Switzerland, major emerging economies such as China and India are not banishing coal from their energy mixes but instead focusing on increasing efficiency and developing carbon capture and storage technologies to mitigate emissions.
While advocates of renewable energy point to competitive prices, many of these emerging economies have already invested substantial sums into coal-fired plants that are relatively young in comparison to their Western counterparts. With an average age of just 11 years in Asia, compared to 42 years in the West, Asian governments and businesses want to see a return on their substantial investments.
In Pakistan, energy demand grows 8 percent every year. Coal currently provides around 3 percent of the country’s overall supply, but ministers hope to increase that share to 20 percent by 2025 — despite objections from critics that the country’s concurrent renewables targets are too low.
With both China and India — the world’s two largest emerging economies — still heavily reliant on coal, and with a whole host of other countries investing in the power source, coal clearly has a role to play in global power generation. China, for its part, has developed extensive expertise in harnessing coal energy and is clearly eager to export those technologies.
The Chinese government needs to make sure firms exporting coal technologies are adhering to the same emissions standards that apply back home, reducing avoidable emissions and waste. With technologies such as high-efficiency, low-emission and carbon capture and storage becoming increasingly practicable alternatives, there is no justification for promulgating outdated technologies abroad that would be unacceptable in China itself.
