Beijing, September 12, 2013 – The Chinese government's plan to improve air quality in the Beijing, Shanghai and Guangdong regions will significantly slow down China’s coal consumption growth and curb future import demand, further eroding the viability of US coal export proposals and setting an important precedent that should be broadened in China, Greenpeace said.
The plan includes a ban on approving new coal-fired power plants in key economic regions that currently have 30% of the country’s coal-fired power generation capacity and is accompanied by ambitious targets to cut coal consumption in three key provinces.
The ban on new coal-fired power plants covers China’s most important coal importing regions, the Pearl River Delta and Yangtze River Delta, responsible for more than 50% of thermal coal imports. With the power sector the main importer of coal, this will very significantly curb future import demand.
“The weak market and plummeting price of coal in China already calls into question the profitability of shipping US thermal coal to China. These new policies to address Chinese air pollution are concentrated in the regions that account for that majority of China’s coal imports, and will further erode the viability of US coal export proposals,” said Greenpeace East Asia coal analyst Lifeng Fang, who is currently in Montana to discuss Chinese coal issues with residents concerned about US coal mining and export proposals.
Last week, Citi Research published a report, “The Unimaginable: Peak Coal in China” which noted that “significant shifts in China’s economy and power sector are now under way that demand a reassessment of Chinese coal’s perpetual climb.” The Citi report echoes research from Goldman Sachs and Deutsche Bank emphasizing the implications of weakening Chinese demand to the global coal trade, noting that “2013 will represent a watershed event for the seaborne market.”
The action plan requires the country's most polluted provinces to “strive to achieve a negative coal increase” in five years. Three provinces, Beijing, Hebei and Shandong, have already pledged to reduce coal consumption by 73 million tonnes, or 10% from 2012 levels, by 2017.
The three provinces consumed more coal in 2011 than all of the European Union. Shandong is the largest coal consumer among Chinese provinces and Hebei is the fourth largest. The provinces have seen coal consumption grow at 6% a year, so the absolute reduction targets require a rapid and dramatic reversal of the coal consumption trend. More coastal provinces are also expected to make their respective announcement following the national plan.
"China’s political leadership has set an ambitious timeline to solve China’s air pollution crisis, responding to the mandate set by the Chinese public, especially in the heavily polluted cities around Beijing. The targets can only be met by tackling China’s coal consumption growth and the plan takes very important steps in that direction," said Li Yan, climate and energy campaign manager at Greenpeace East Asia.
Fact sheet: China clean air plan to slow coal consumption
Joe Smyth, Greenpeace Communications, 831-566-5647,
Lifeng Fang, Greenpeace East Asia coal analyst