The Emperors King Coal, part 6 – China’s New Export Coal
Part 6 out of 6, in this “King Coal” series by Juha Tuominen. Juha is a foreigner living in Beijing since 2008. Having worked several years in central government-controlled industries such as energy, this series of articles also reflects the writer’s own experiences and observations on how things work or do not work in China.
China’s New Export Coal
During this decade, China has grown to the second-largest nation in the world in terms of economy. It has also started to take a more active role in international politics and development. With initiatives such as ‘Belt and Road’ the country is also investing outside of its borders. Especially the continent of Africa has come to enjoy different types of support from China. A particular spotlight has been put on infrastructure projects that China both funds and develops in Africa, along with the Belt and Road plan. Rather many of these projects are related to coal.
According to recent reports by environmental organizations such as Greenpeace, China currently has some 200 coal energy projects, either ongoing or planned in 34 different countries. These include South Asian countries such as Indonesia and Bangladesh and 11 countries in Africa. The single most significant project is in Egypt, where Chinese developers are building a coal plant with 6600 MW capacity. The plans have been criticized for utilizing older and more pollutant technology than the recent coal project inside Chinese borders. This has been made possible by much looser standards and restrictions in the target countries; standards and restrictions that Chinese companies have gotten used to in their domestic market.
In addition to China, only Japan and South Korea are said to promote coal as an energy source in the global market. Especially China has rejected the international community’s criticism for its coal projects outside of China. The reasoning behind China’s stance is that each country makes their own energy policy and decisions. But coal energy happens to be a desirable option for a developing country which at the same time is experiencing growth both in energy demand and economy. The reasons are mostly the same as why coal is so popular and is not disappearing from the China energy mix anytime in the foreseeable future.
While coal had a significant role in the industrial revolution, it has since lost its popularity in the West due to its environmental effects. But still, the consumption of coal keeps growing globally. China’s energy policies as a consumer (roughly half of the global coal market) have naturally a significant impact on the development. However, for developing countries like Africa, coal is also an attractive option for securing supply for growing energy demand.
These countries could be on the verge of their own industrial revolution, and energy policies are based on economic factors where green values have little room. When it comes down to choosing between employment and financial stability versus long term environmental development, for these countries’ leaders, it is not even a choice. Thus, it is easy to predict that coal consumption in developing countries will continue for years and years to come.
In China, coal ushered the rapid economic growth from a developing country to the World’s second-largest economy in about two decades. The country has since taken steps towards kicking its ugly coal habit, but that does not mean it would be significantly reducing coal consumption any time soon.
The focus has more been on reducing the environmental effects rather than coal itself. And indeed, the technology used for turning coal to electricity or heat is far more modern and “green” than some 20 years ago. At the same time, the country has made considerable investments in renewable and clean energy, including wind, solar, and nuclear. But with the growing energy need, this has not enabled China even to consider reducing coal.
One of the main problems is the inequality when it comes to economic development inside the country. While the rise to the second-biggest economy globally can be seen in the Eastern parts of the country with modern cities such as Beijing and Shanghai, or Guangzhou and Shenzhen in the South, central and western regions are waiting for the wealth to spread to the rest of the country. These areas have been the “power plants” of the country’s development, and their economies are still heavily dependent on coal and steel. Thus, they are not likely to yield to Beijing’s green initiatives as the central government has already learned with several reform attempts.
The public discussion on environment and energy, especially in Europe, too often ignores the local realities in developing countries as well as China. In many cases, coal is not an energy choice but an economic one. It is about local employment, taxes, and financial stability. But it is not only the developing countries that tend to put the economy in front of the environment.
It is estimated that between 2008 and 2012 during the Obama Administration´s energy policy reforms, some 50 000 jobs disappeared in the US. The reform hit particularly states like Ohio and Pennsylvania where coal had a prominent place in the local economy. In the last presidential election, Trump was able to secure the above mentioned two “swing states” partly by his strong appeal to oppose the elimination of coal.
Currently, three countries consume about 70 percent of global coal. Of these, only the US is a so-called mature economy whereas China and India still are somewhat developing economies. At the same time, several developing countries like Africa are entering the industrialization stages of their development. As it was in Europe, in the US, and China, these countries will most likely turn to coal at least in the beginning.
Socioeconomic effects together with abundant reserves and the costs of coal will keep it as a preferred energy option in many of these countries. Thus, coal consumption is unlikely to reduce significantly anytime soon. A much more probable scenario is that of China, where huge investments have been made not only to clean energy, but also to reduce the polluting effect of coal by implementing modern technology. China seems to be determined to maintain King Coal as the backbone of the new greener China.