Most countries have pledged to phase dirty fuels such as coal out of their energy mixes over the next couple of decades as part of global efforts to reduce carbon emissions and combat climate change. However, experts are worried that China’s recent return to coal may harm global climate change goals in the long term.
A recent report by Greenpeace has revealed that the Eastern Asian nation has approved the production of more than 50 gigawatts of new coal power in the first half of the year, a clear indicator that China doesn’t plan to ditch coal-generated energy any time soon.
Arguably the largest polluter on the planet, China is responsible for 27% of global carbon dioxide emissions and 30% of all greenhouse gases. In 2021 alone, the nation emitted 11.47 billion metric tons of carbon dioxide, more than double the 5 billion metric tons emitted in the U.S.
A global energy crisis left several countries in Asia and Europe scrambling for alternative fuel sources and led to renewed interest in coal-fired power, especially in China. Approval rates for new coal plants in the country surged in 2022 as the country expedited the speed of taking projects from permits to construction. GEM analyst Flora Champenois estimates that new mining projects went from initial idea to breaking ground in a matter of months, much faster than the decade it usually takes new mining projects to break ground in the United States.
Unexpectedly hot weather and drought are also hampering hydroelectric energy production in key power production regions and forcing Beijing to turn to coal for additional energy supplies. In regions such as the southwestern provinces of Yunnan and Sichuan, which produce close to 50% of China’s hydroelectric energy, hydrogeneration is down to its lowest level in nearly a decade.
As extreme weather events caused by climate change and dirty energy use have ravaged China, Beijing has fired up even more coal power plants to shore up energy supplies and avoid power cuts in residential and manufacturing regions.
Gao Yuhe, a researcher from Greenpeace said that there seems to be a mismatch between energy security and transitioning to green energy in China. With China’s electricity grid struggling to supply its increasing energy needs, China seems to be hedging its bets on coal to keep its homes lit and factories running. Gao says based on statements from Beijing, coal power in the country will expand at a “considerable pace” throughout the decade.
As energy shortages due to adverse weather persist, coal producers such as Alliance Resource Partners L.P. (NASDAQ: ARLP) could remain in business for much longer than climate-change watchdogs would wish.
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