China Announces It Will Stop Financing Coal-Fired Projects Abroad

President Xi addressing the UN General Assembly. Image Credit: Credit UN Photo/Cia Pak

China has announced that it will no longer finance coal-fired projects and build coal plants abroad. The remarks were made by President Xi Jinping during his address at the United Nations General Assembly and is seen by many as a true beginning of the end for coal power.

This move would mean an end to the largest remaining source of money and support for new coal-powered projects internationally. China has been funding major projects through its Belt and Road initiatives in places like Vietnam and Indonesia. This fund covers trains, coal plants, roads, and ports in many countries, several of which are developing nations. However, during the first half of this year, it has not funded any coal projects.

"China will step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad," President Xi said in a pre-recorded statement broadcast at the Assembly currently being held in New York.

Such a commitment has received praise as a demonstration of the political will needed to phase out coal for good. When the 2021 United Nations Climate Change Conference (COP26) starts next month, this could become a reality.

"It is clear the writing is on the wall for coal power. I welcome President Xi's commitment to stop building new coal projects abroad – a key topic of my discussions during my visit to China. At #COP26, we must consign coal to history," COP26 President Alok Sharma said on Twitter.

UN Secretary-General António Guterres also praised China’s promise, declaring that “accelerating the global phase-out of coal is the single most important step to keep the 1.5°C goal of the Paris agreement within reach.” A goal that not one of the world's major economies is even close to meeting yet.

“This is a planetary emergency,” Guterres said in his address “We are on the edge of an abyss – and moving in the wrong direction. Our world has never been more threatened, or more divided.”

President Xi did not give a timeline for the phase-out of coal-powered projects. As of 2019, China has more than 300 coal plants in the works around the world. It has canceled around 75 percent of its coal projects since 2015 when the Paris Agreement was signed. 

However, China also burns half of the world’s coal domestically and in 2020 built three times as much coal capacity as the rest of the world put together – the equivalent of more than one large power plant week. It also currently gets about 70 percent of the nation's electricity from coal, so if it plans to make meaningful changes it needs to address infrastructure at home as well as abroad. 

 

 
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