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 trend of shop prices falling may be reversing as businesses face higher costs, according to industry data.
The pace of price drops slowed this month, according to figures from the British Retail Consortium (BRC).
November was the first time in 17 months that the inflation rate was higher than a month earlier.
While shop prices dropped 0.8% in October compared to a year earlier, the fall slowed 0.6% in November, according to BRC figures.
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The figures may signal the end of falling inflation given cost pressures being placed on big businesses, according to BRC chief executive Helen Dickinson.
Retailers face a barrage of costs which the BRC forecasts will amount to an extra £7bn for retail businesses next year.
Budget measures such as the increase in employers’ national insurance contributions and a higher minimum wage form part of those costs as does the forthcoming packaging tax to fund recycling efforts.
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CBI chief’s approach to budget tax shock
These extra costs will just push up consumer prices, Ms Dickinson said.
“Retail already operates on slim margins, so these new costs will inevitably lead to higher prices.”
The official measure of inflation is already on the up with the first rise in three months recorded in October as energy bills rose. The rate of price rises rose sharply to 2.3% from 1.7% recorded a month earlier as the energy price cap was hiked.
If the government wants to prevent higher shop prices it must reconsider the April 2025 timeline for the new packaging levy and reduce the commercial property tax known as business rates “as early as possible”, Ms Dickinson added.
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Chancellor Rachel Reeves promises she will not raise taxes again
The minimum wage uplift will bring pay for people over 21 to £12.21 an hour and take effect in April. People aged 18 to 20 will have to earn at least £10 an hour – something the TUC (Trades Union Congress) said could benefit 420,000 young people – as part of the government’s goal of paying the same minimum wage to all workers, regardless of age.
Also from April, employers will have to pay more national insurance for their staff.
Businesses’ national insurance contributions will increase from 13.8% to 15% with the current £9,100 threshold at which employers start to pay the tax on employees’ earnings lowering to £5,000.
Chancellor Rachel Reeves has defended the increase saying half of all businesses – roughly a million firms – are paying either less or the same national insurance contributions as they were before the budget due to the uprated employment allowance, a tax credit for some employers.
There will be no more tax rises or borrowing for the duration of this government’s term, Chancellor Rachel Reeves has said.
She told business leaders there will not be another budget like her maiden announcement, which included a rise in employers’ national insurance contributions and the national minimum wage.
“I’m not coming back with more borrowing or more taxes. And that is why at this budget, we did wipe the slate clean to put public finances and public services on a firm footing,” she told attendees at the Confederation of British Industry (CBI) conference.
“As a result, we won’t have to do a budget like this ever again.”
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Ms Reeves’ budget has faced sharp criticism from major UK businesses who have said the policy measures will cost them millions, forcing them to raise prices and cut jobs.
Analysis from independent forecasters the Office for Budget Responsibility said the budget would cause inflation to be higher than originally predicted, adding to the disquiet.
But Ms Reeves has insisted there is no alternative to her policies.
“I’ve heard a lot of feedback but what I haven’t heard is a lot of alternatives,” she said on Monday afternoon.
The £22bn “black hole” in public finances needed to be plugged, which necessitated “difficult decisions”, Ms Reeves reiterated.
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CBI chief’s approach to budget tax shock
Full consultation on the employer taxes could not take place with firms, she added, because budgets are supposed to be made to MPs in the Commons and not leaked to industry or the media.
“It is the nature of budgets that you can’t announce or consult in the way over tax rates that you can with other policies,” she said.
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Earlier on Monday, the head of the CBI, one of the UK’s most prominent business groups, said the budget business tax rises will hit firms rather than encourage growth.
A key goal of the Labour government is to grow the economy.
Kingfisher, the owner of Screwfix and B&Q, also said on Monday that the national insurance changes alone would force up its costs by £31m in the next financial year.
Meanwhile, the boss of McVitie’s, Jacob’s and Carr’s said the UK was losing its appeal for his business.
“We would like to continue to be a major investor going forward,” said Salman Amin, chief executive of snack food company Pladis.
But, he warned: “It’s becoming harder to understand what the case for investment is.”
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