For years Greenpeace has been campaigning for Chinese coal powers to pay the true cost of its environmental and health effects. September 21 of this year saw a step towards that direction as the People's Republic of China's Ministry of Environmental Protection announced a new emission standard for thermal power plants, for NOx and mercury, and a tightening of SO2 and soot standards.
Such pollutants are a major source of air pollution in China. And this new standard requires coal power plants to invest in emission reduction technology. New coal power plants have a set date of the beginning of next year and for old power plants by mid-2014. They must also abide by a new limit on mercury by beginning of 2015.
We estimate such measures could bring about a 70% reduction in NOx emissions from power plants. This is a really positive move and shows that the government is committed to including environmental and health costs into the price of coal. Our initial estimates suggest that pollutant reduction equipment will create a 2-8% increase to the price of coal power.
However, if all of the health costs and environmental costs are actually calculated, coal should still be much more expensive here in China.
This new standard comes at a time when coal companies are decreasing in profits, with the price of coal rising. During summer some coal power companies didn't even want to operate, as doing so would lead to more losses than gains. We can expect these new costs to have a continued dampening effect on the Chinese expansion of coal power.
Coal is an energy source which is causing massive environmental effects and making China the biggest Greenhouse gas emitter in the world. And the new emission standard does not directly address this issue - the main motivator for the standard is poor air quality in China's densely populated urban areas. Nonetheless it's a step forward in the right direction in terms of coal beginning to pay its real environmental costs.
The implementation of the new standard is not to be taken for granted. Greenpeace needs to continue to work hard in pushing for effective implementation, including eliminating any perverse subsidies for coal companies.