New coal plants in China soar despite President Xi’s pledge to ‘strictly control’ dirtiest fuel
China ramped up coal power capacity last year, according to new analysis, despite a pledge to “strictly control” the dirtiest fossil fuel.
The country added 47.4 Gigawatts (GW) of new coal power in 2023, more than double the amount added by the rest of the world combined.
It raises concerns that gains in clean power, including by China, are being undermined by the persistent use of coal, the worst energy form for climate change and air pollution.
Analysts say China may not use all the capacity it has built.
Beijing has promised to reduce coal consumption from 2026, and said its polices align with the international Paris Agreement on climate.
But the surge drove an increase in global coal by 2% last year, the first uptick since 2019, though other countries were responsible too, Global Energy Monitor (GEM) said.
The global rise comes two years after countries promised at the COP26 climate conference in Glasgow to “transition away” from coal.
GEM said it could just be a “blip”.
But Tina Stege, climate envoy for the Marshall Islands, which are battling rising sea levels, said fossil fuel support is “unacceptable”.
Professor Piers Forster, interim chair of the UK government’s Climate Change Committee, called it “worrying”.
While extra capacity may not end up being used, “without strong regulation and polices that prevent it from being used, 2023 will not be seen as just a blip and future emissions rise will be inevitable”, Prof Forster said.
Does China need more coal power?
China’s coal spree is “very out of line” with a promise made by President Xi in 2021 to “strictly control” new coal power, said Flora Champenois, GEM coal programme director.
It also threatens a Chinese Communist Party target to shut down 30GW of coal power by 2025 – with only 9GW retired in the last few years.
“This coal boom – in terms of new coal plants coming online, new permits being awarded, new construction starting, no signs of a slowdown, no signs of retirement on the horizon – does not align with the commitment to strictly control coal,” Ms Champenois told Sky News.
But the new coal plants do “not necessarily mean that China is going to increase an equivalent scale of CO2 emissions,” said Qi Qin, China analyst for Research on Energy and Clean Air, who also wrote the report.
That’s because China is “increasing its renewable power capacities by [the same] scale too”, she said.
China has recently built more solar power than the rest of the world combined, and is on track to meet a 2030 clean power goal five years early.
The surge is partly fuelled by power shortage fears after a 2022 drought shrivelled water supplies for China’s hydropower.
But it already has more coal power than it needs, said Ms Qin, but a rigid grid system makes it hard for provinces to share power, meaning many are building their own coal plants.
Chinese President Xi Jinping visiting a coal yard Pic: Xinhua News Agency,
‘Blip’ or ‘unacceptable’?
Seven other countries added new coal power in 2023 too, GEM found.
Those were Indonesia, India, Vietnam, Japan, Bangladesh, Pakistan, South Korea, Greece, and Zimbabwe.
But GEM also partly blamed the global net increase in coal power on rich countries stalling plant closures amid the energy crisis in 2022.
Marshall Islands climate envoy Tina Stege, said: “We can’t afford blips.”
She told Sky News: “Since the start of the year, my country has been reeling from one climate-induced emergency to another, with flooding from king tides and drought affecting communities throughout the islands.”
Coal power, still the single largest source of emissions globally, must be “phased out as soon as possible” to avoid “catastrophic sea level rise and [save] lives and livelihoods”, she said.
She called it “unacceptable” the world has hardly started on shifting the trillion dollar subsidies for the fossil fuel industry to clean alternatives.
A spokesperson from the Chinese embassy in London said China will go from peaking emissions to carbon neutrality “in the shortest span of time ever in the world”.
“Our climate policies and objectives are fully consistent with the long-term temperature goal of the Paris Agreement.
“Today, close to half of the world’s installed [solar PV] capacity is in China, over half of the world’s new energy vehicles run on roads in China, and one-fourth of the world’s increased area of afforestation is in China.”
They added: “We are also working to cultivate large-scale new growth drivers in green infrastructure, green energy, green transportation and green lifestyle.”
The UK economy unexpectedly shrank in May, even after the worst of Donald Trump’s tariffs were paused, official figures showed.
A standard measure of economic growth, gross domestic product (GDP), contracted 0.1% in May, according to the Office for National Statistics (ONS).
Rather than a fall being anticipated, growth of 0.1% was forecast by economists polled by Reuters as big falls in production and construction were seen.
It followed a 0.3% contraction in April, when Mr Trump announced his country-specific tariffs and sparked a global trade war.
A 90-day pause on these import taxes, which has been extended, allowed more normality to resume.
This was borne out by other figures released by the ONS on Friday.
Exports to the United States rose £300m but “remained relatively low” following a “substantial decrease” in April, the data said.
Overall, there was a “large rise in goods imports and a fall in goods exports”.
A ‘disappointing’ but mixed picture
It’s “disappointing” news, Chancellor Rachel Reeves said. She and the government as a whole have repeatedly said growing the economy was their number one priority.
“I am determined to kickstart economic growth and deliver on that promise”, she added.
But the picture was not all bad.
Growth recorded in March was revised upwards, further indicating that companies invested to prepare for tariffs. Rather than GDP of 0.2%, the ONS said on Friday the figure was actually 0.4%.
It showed businesses moved forward activity to be ready for the extra taxes. Businesses were hit with higher employer national insurance contributions in April.
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The expansion in March means the economy still grew when the three months are looked at together.
While an interest rate cut in August had already been expected, investors upped their bets of a 0.25 percentage point fall in the Bank of England’s base interest rate.
Such a cut would bring down the rate to 4% and make borrowing cheaper.
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Is Britain going bankrupt?
Analysts from economic research firm Pantheon Macro said the data was not as bad as it looked.
“The size of the manufacturing drop looks erratic to us and should partly unwind… There are signs that GDP growth can rebound in June”, said Pantheon’s chief UK economist, Rob Wood.
Why did the economy shrink?
The drops in manufacturing came mostly due to slowed car-making, less oil and gas extraction and the pharmaceutical industry.
The fall was not larger because the services industry – the largest part of the economy – expanded, with law firms and computer programmers having a good month.
It made up for a “very weak” month for retailers, the ONS said.
Monthly Gross Domestic Product (GDP) figures are volatile and, on their own, don’t tell us much.
However, the picture emerging a year since the election of the Labour government is not hugely comforting.
This is a government that promised to turbocharge economic growth, the key to improving livelihoods and the public finances. Instead, the economy is mainly flatlining.
Output shrank in May by 0.1%. That followed a 0.3% drop in April.
Ministers were celebrating a few months ago as data showed the economy grew by 0.7% in the first quarter.
Hangover from artificial growth
However, the subsequent data has shown us that much of that growth was artificial, with businesses racing to get orders out of the door to beat the possible introduction of tariffs. Property transactions were also brought forward to beat stamp duty changes.
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In April, we experienced the hangover as orders and industrial output dropped. Services also struggled as demand for legal and conveyancing services dropped after the stamp duty changes.
Many of those distortions have now been smoothed out, but the manufacturing sector still struggled in May.
Signs of recovery
Manufacturing output fell by 1% in May, but more up-to-date data suggests the sector is recovering.
“We expect both cars and pharma output to improve as the UK-US trade deal comes into force and the volatility unwinds,” economists at Pantheon Macroeconomics said.
Meanwhile, the services sector eked out growth of 0.1%.
A 2.7% month-to-month fall in retail sales suppressed growth in the sector, but that should improve with hot weather likely to boost demand at restaurants and pubs.
Struggles ahead
It is unlikely, however, to massively shift the dial for the economy, the kind of shift the Labour government has promised and needs in order to give it some breathing room against its fiscal rules.
The economy remains fragile, and there are risks and traps lurking around the corner.
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Is Britain going bankrupt?
Concerns that the chancellor, Rachel Reeves, is considering tax hikes could weigh on consumer confidence, at a time when businesses are already scaling back hiring because of national insurance tax hikes.
Inflation is also expected to climb in the second half of the year, further weighing on consumers and businesses.
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