China’s Commitment to Stop Coal Will Influence Global Investment Worth $50 Billion

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China’s pledge to halt construction of coal-fired power plants overseas could halt global investment commitments worth $50 billion. Analysts say halting the project will cut future global carbon emissions, even though Beijing’s own domestic coal program still uses fossil fuels that are not environmentally friendly.

Chinese President Xi Jinping said in a speech at the UN General Assembly on Tuesday (21/9), China will help developing countries build green energy production and stop the construction of coal-fired power plants abroad.

Chinese President Xi Jinping addresses the Global Services Trade Summit at the 2021 China International Exhibition for Trade in Services held in Beijing on Thursday, September 2, 2021. (Photo: via AP)

China is under international pressure to announce an end to foreign coal financing as part of a new package on a national climate deal to be submitted to the United Nations.

Beijing is the largest source of financing for coal-fired power projects in the world. Xi’s announcement will have far-reaching implications for plans to expand development of coal-fired power projects in countries such as Bangladesh, Indonesia, Vietnam and South Africa.

Institution think tank The US, Global Energy Monitor (GEM), predicts the announcement could affect 44 coal-fired power plants that will be financed by Chinese financial institutions with a total value of $50 billion. Termination of the project, GEM told Reuters, has the potential to reduce carbon dioxide emissions by 200 million tonnes per year in the future.

“China’s announcement is one of the most significant developments in the climate field this year, as it may mark the end of international public financing for coal generation,” said GEM Coal Program Director, Christine Shearer. “We will find many countries turning to alternative sources of power generation, and hopefully they are supported to ensure clean energy.”

A number of environmental groups will also urge the funding backers of large coal projects, such as the Bank of China, to draw up a timetable for a planned withdrawal from the sector. The funding is part of a plan to build a coal-fired power plant overseas with a capacity of 10 gigawatts.

China’s pledge follows similar steps South Korea and Japan have taken this year by shutting the taps of the last three major public investors for coal-fired power projects overseas.

President Joe Biden speaks at the virtual COVID-19 summit of the United Nations General Assembly, in the Southern Court Auditorium at the White House, Wednesday, September 22, 2021, in Washington.  (Photo: AP/Ivan Vucci)

President Joe Biden speaks at the virtual COVID-19 summit of the United Nations General Assembly, in the Southern Court Auditorium at the White House, Wednesday, September 22, 2021, in Washington. (Photo: AP/Ivan Vucci)

It comes hours after US President Joe Biden pledged to double state spending to $11.4 billion by 2024 to help developing countries deal with climate change.

Boston University’s Center for Global Development Policy says there are more than 20 Chinese-financed coal-fired power plants under construction in South Africa, Pakistan, Indonesia, Vietnam, Bangladesh, Zimbabwe, Serbia and the United Arab Emirates. Meanwhile, 17 other projects are in the planning stage.

China’s domestic program accounts for more than half of all coal-fired power plants under construction worldwide, according to a report published this month by E3G, a global organization. think tank European climate.

Smoke and steam rise from the Urumqi Thermal Power Plant in Urumqi in western China's Xinjiang Uyghur Autonomous Region, April 21, 2021. (Photo: AP)

Smoke and steam rise from the Urumqi Thermal Power Plant in Urumqi in western China’s Xinjiang Uyghur Autonomous Region, April 21, 2021. (Photo: AP)

While Xi has pledged to “strictly control” new domestic coal power capacity over the period 2021-2025, the country will not start reducing coal consumption until 2026.

“With a new direction set for overseas coal, China needs to work harder now to overcome its domestic coal addiction,” said Li Shuo, senior climate adviser at Greenpeace. [ah/rs]

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