Abby L. Harvey
GHG Monitor
11/21/2014
China’s relatively young coal fleet is likely to continue running well into the future, ensuring continued business for companies exporting coal to the country even in the wake of the climate agreement reached between the United States and China last week, according to industry and environmental officials. Under the agreement, the United States has committed to reducing net greenhouse gas emissions 26-28 percent below 2005 levels by 2025 and China has committed to setting targets to peak CO2 emissions by 2030 and to increase non-fossil fuel energy production to 20 percent of its energy mix by 2030. “The joint announcement marks the first time China has agreed to peak its CO2 emissions. The United States expects that China will succeed in peaking its emissions before 2030 based on its broad economic reform program, plans to address air pollution, and implementation of President Xi’s call for an energy revolution,” according to a White House fact sheet released this week.
Roughly 25 percent of U.S. coal exports in 2012 went to Asia, according to data reported by the U.S. Energy Information Administration. That amount accounts for only roughly 4 percent of coal imports in Asia. According to the World Resources Institute, in 2012 China was the third largest importer of U.S. coal. While that amounts to a significant percentage of U.S. coal exports, the industry remains unfazed by China’s pledge to peak CO2 emissions. Addressing speculation that the demand for U.S. coal in China could decrease as a result of the agreement, Luke Propovich, Vice President of External Communications for the National Mining Association, told GHG Monitor this week that those concerns were not necessarily based in reality. “I think what you’ve seen could be more environmentalists’ wish, hoping that coal exports to China will drop as a consequence of the agreement. But wishing doesn’t make it so,” he said. “For one thing, China did not commit to slowing coal use, or reducing emissions rates, until 2030. The glide path they’re on now will continue unmolested – and with it a need for coal as economic growth rates resume. Second, China is already building the world’s largest coal fleet that will ensure it continues very robust coal use – not just for electricity generation but also for steel making.”
While China has pledged to peak its CO2 emissions, the country’s coal fleet remains young, making it unlikely that the country will shutter a significant amount of plants in the near future, Kurt Waltzer, Managing Director of the Clean Air Task Force, told GHG Monitor following last week’s announcement. “China has almost three times as many coal plants as the U.S. but the difference is they’re all pretty new, most of them built in the past 10 years and those plants are going to be around at least for 50 years,” he said, noting that because of the young age of China’s coal fleet, technologies like carbon capture and storage are essential. “Because those plants are going to be around for 50 years we need technologies like CCUS on them in order to decarbonize the energy sector and if we can get CCUS to affordably work in China, that’s a really important step in being able to decarbonize the global energy sector.”
Popovich also noted that while other countries focus their coal exports on China, the U.S. has an opportunity to focus on other areas of the world. “China of course has other suppliers – Indonesia and Australia for example. But the extent to which these large coal producers focus on China they leave markets in the developing world and in India to other coal exporting countries, like ours,” he said.
