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China Promotes Coal in Setback for Efforts to Cut Emissions

Joe Mcdonald wrote . . . . . . . . .

China is promoting coal-fired power as the ruling Communist Party tries to revive a sluggish economy, prompting warnings Beijing is setting back efforts to cut climate-changing carbon emissions from the biggest global source.

Official plans call for boosting coal production capacity by 300 million tons this year, according to news reports. That is equal to 7% of last year’s output of 4.1 billion tons, which was an increase of 5.7% over 2020.

China is one of the biggest investors in wind and solar, but jittery leaders called for more coal-fired power after economic growth plunged last year and shortages caused blackouts and factory shutdowns. Russia’s attack on Ukraine added to anxiety that foreign oil and coal supplies might be disrupted.

“This mentality of ensuring energy security has become dominant, trumping carbon neutrality,” said Li Shuo, a senior global policy adviser for Greenpeace. “We are moving into a relatively unfavorable time period for climate action in China.”

Coal is important for “energy security,” Cabinet officials said at an April 20 meeting that approved plans to expand production capacity, according to Caixin, a business news magazine.

The ruling party also is building power plants to inject money into the economy and revive growth that sank to 4% over a year earlier in the final quarter of 2021, down from the full year’s 8.1% expansion.

Governments have pledged to try to limit warming of the atmosphere to 2 degrees Celsius (3.6 degrees Fahrenheit) above the level of pre-industrial times. Leaders say what they really want is a limit of 1.5 degrees Celsius (2.7 degrees Fahrenheit).

Scientists say even if the world hits the 2-degree goal in the 2015 Paris climate pact and the 2021 Glasgow follow-up agreement, that still will lead to higher seas, stronger storms, extinctions of plants and animals and more people dying from heat, smog and infectious diseases.

China is the top producer and consumer of coal. Global trends hinge on what Beijing does.

The Communist Party has rejected binding emissions commitments, citing its economic development needs. Beijing has avoided joining governments that promised to phase out use of coal-fired power.

In a 2020 speech to the United Nations, Xi said carbon emissions will peak by 2030, but he announced no target for the amount. Xi said China aims for carbon neutrality, or removing as much from the atmosphere by planting trees and other tactics as is emitted by industry and households, by 2060.

China accounts for 26.1% of global emissions, more than double the U.S. share of 12.8%, according to the World Resources Institute. Rhodium Group, a research firm, says China emits more than all developed economies combined.

Per person, China’s 1.4 billion people on average emit the equivalent of 8.4 tons of carbon dioxide annually, according to WRI. That is less than half the U.S. average of 17.7 tons but more than the European Union’s 7.5 tons.

China has abundant supplies of coal and produced more than 90% of the 4.4 billion tons it burned last year. More than half of its oil and gas is imported and leaders see that as a strategic risk.

China’s goal of carbon neutrality by 2060 appears to be on track, but using more coal “could jeopardize this, or at least slow it down and make it more costly,” Clare Perry of the Environmental Investigations Agency said in an email.

Promoting coal will make emissions “much higher than they need to be” by the 2030 peak year, said Perry.

“This move runs entirely counter to the science,” she said.

Beijing has spent tens of billions of dollars on building solar and wind farms to reduce reliance on imported oil and gas and clean up its smog-choked cities. China accounted for about half of global investment in wind and solar in 2020.

Still, coal is expected to supply 60% of its power in the near future.

Beijing is cutting millions of jobs to shrink its bloated, state-owned coal mining industry, but output and consumption still are rising.

Authorities say they are shrinking carbon emissions per unit of economic output. The government reported a reduction of 3.8% last year, better than 2020′s 1% but down from a 5.1% cut in 2017.

Last year’s total energy use increased 5.2% over 2020 after a revival of global demand for Chinese exports propelled a manufacturing boom, according to the National Bureau of Statistics.

Stimulus spending also might raise carbon output if it pays for building more bridges, train stations and other public works. That would encourage carbon-intensive steel and cement production.

China’s coal-fired power plants operate at about half their capacity on average, but building more creates jobs and economic activity, said Greenpeace’s Li. He said even if the power isn’t needed now, local leaders face pressure to make them pay for themselves.

“That locks China into a more high-carbon path,” Li said. “It’s very difficult to fix.”

Source : AP

Infographic: How Far Are We From Phasing Out Coal?

See large image . . . . . .

Source : Visual Capitalist

Chart: Coal Prices Turn Down After Reaching an All Time High in March 2022

Source : Trading Economics

Charts: Coal Reached an All Time High in March 2022

Source : Trading Economics

Chart: China’s Coal Miners Pile Up Record $111 billion in Profit

Coal mining companies posted 702.3 billion yuan ($111 billion) in profit for 2021, a figure that soared 213% year-on-year, figures from the National Bureau of Statistics (NBS) showed. The surging earnings also made it the third-most profitable sector tracked by the bureau, behind electronics and communication-equipment makers and chemical products manufacturers.

Source : Caixin

Infographic: The Future of Global Coal Production (2021-2024F)

See large image . . . . . .

Source : Visual Capitalist

The Excruciatingly Long, Slow ‘Death’ of Coal

Dave Levitan wrote . . . . . . . . .

Rumors of coal’s death have been greatly exaggerated. As evidence placing 2021 among the hottest years ever recorded rolled in last week, new data demonstrated just how difficult it is to relegate the burning of dirty black rocks to the slag heap of history.

In one study, the independent research center Rhodium Group estimated that 2021 greenhouse gas emissions in the U.S. experienced a surge of 6.2 percent compared with 2020′s pandemic lows, thanks in large part to a 17 percent bump in coal-fired electricity generation. A second study, by the International Energy Agency, reports that the global demand for coal hit an all-time high in 2021, and that it will rise further in 2022 and remain steady at record levels through 2024, largely thanks to China and India.

Limiting warming to 1.5 degrees Celsius, the goal set in the Paris Agreement that scientists say would help stave off the worst effects of climate change, necessitates leaving almost all remaining coal in the ground. However, the world’s biggest coal consumer, China, has committed only to start curbing its use by the end of the decade, and it faces some serious political and economic hurdles. On the domestic side, the picture is slightly brighter: Experts say the 2021 U.S. numbers don’t do anything to alter coal’s long-term outlook, and its decline should continue apace — if slower than some might prefer.

“The long-term trends are unchanged, that you have a lot of coal retirements ongoing now and planned in the coming years,” said Mark Thurber, of Stanford University’s Program on Energy and Sustainable Development and author of the 2019 book “Coal.” Data from the U.S. Energy Information Administration bears this out, with almost 14 gigawatts of coal power — almost six percent of the U.S. output — scheduled to close down in 2022 alone; a recent report said that 85 percent of all power plant retirements this year will be coal plants.

The surge in coal power use in 2021 does show that even in the U.S., where economics makes it is essentially impossible to build new coal power infrastructure, easing off the fossil fuel is hard.

“It’s a blip that also shows our vulnerability … if we continue to rely on this kind of bygone-era energy system, where we take black stuff out of the ground and we burn it,” said Claire Fyson, of the international nonprofit research organization Climate Analytics, “it just doesn’t work anymore.”

The Rhodium Group’s analysis found that coal’s 17 percent surge was largely a response to spiking natural gas prices. With 2021 gas prices more than double the average price seen in 2020, power companies saved money by decreasing gas use and relying more on coal. As long as the coal plants are standing by, natural gas price volatility could lead to similar such coal surges in the future.

Just 28 percent of U.S. coal power plants are slated to shut down by 2035. “There has been a lot of spare capacity among the existing coal-fired fleet and, as we have seen this [past] year, those plants are willing and able to ramp up during these high-gas-price periods,” said Harrison Fell, a senior research scholar at Columbia University’s Center on Global Energy Policy. “Absent any federal or regional policies that mandate some decarbonization or otherwise increase the cost of generation from coal plants, if these recent high gas prices persist, the long tail of coal’s demise could get seriously elongated.”

Some states have instituted policies that would hasten coal’s death, such as aggressive emissions reduction targets and renewable energy incentives, Fell said. But by and large, they are not the states where coal plants are concentrated. About 30 states have enacted renewable portfolio standards, which require some proportion of a state’s energy come from clean sources — but Wyoming, West Virginia, Kentucky and other coal powerhouses aren’t among them.

At the federal level, there is one very uncomfortable elephant in the room: The sprawling social-program spending bill backed by President Joe Biden. It’s now stalled in the Senate.

“The Build Back Better Act, at least as it was written in 2021, provides tremendous support for renewables” and other cleaner alternatives, Fell said. “Massively expanding these generation sources undermines the economics of existing coal and would certainly speed up their retirements.”

The legislation, which includes significant climate funding, has been stymied by the objections of Senate Republicans and West Virginia Democratic Sen. Joe Manchin, who is severely entangled with the coal industry. Manchin has suggested he opposes coal-unfriendly policies because the “market” is already tamping down coal use — an idea belied by last year’s surge and the too-slow pace of plant retirements.

The bill’s fate remains nebulous. Fell said that the Biden administration could take other actions to hasten coal plant retirements through the Environmental Protection Agency, but the Supreme Court would likely rip the teeth out of any such approach.

“If, for existing coal plants, the economic conditions remain positive (e.g., gas prices remain high) and the regulatory hurdles remain low, I don’t think it’s unreasonable for these plants to continue generating for another 10 to 15 years and possibly longer,” Fell said.

That may sound disappointingly slow, but it’s still a rosy scenario when compared with coal’s trajectory among the world’s biggest consumers.

China isn’t quite ready to let coal go

Zooming out, China — which accounts for more than half the world’s annual coal consumption — will be a major player in deciding how long coal’s death throes last.

Like the U.S., China saw a surge in coal consumption last year. But it was a record high after several years of climbing consumption, not just a blip.

In many ways, coal is an indicator of China’s overarching economic transition. Chinese leadership has been attempting to steer China away from a GDP-centric growth model that relies on heavy industry toward a higher-quality, and lower-carbon, economy.

It has been a jagged transition. In 2020 and 2021, the Chinese government unleashed huge stimulus spending on infrastructure to boost the economy in the wake of the initial covid outbreak in Wuhan. That drove a spike in coal consumption to produce the cement and steel needed to build everything from airports to roads. At the same time, the pandemic spending spree in the U.S. and other affluent countries increased Chinese exports, raising manufacturers’ electricity use.

Gang He, an energy expert at Stony Brook University, sees it as a short-term trend. “It cannot change the long-term trajectory of coal phasing out or coal phasing down,” he said, pointing to the government’s commitment to peaking emissions before 2030 and reaching carbon neutrality by 2060.

China’s longer-term energy and development priorities did start to reemerge in the second half of 2021. Coal power, steel and cement consumption fell — a byproduct of China trying to rein in excessive real estate development. That’s a long-term priority for the government as it shifts the economy and should help bring about the end of coal’s reign.

But the future of China’s favored fuel is also tied up in other political considerations. In the fall, China will hold its 20th Party Congress, where President Xi Jinping is expected to be anointed for his third term. The government usually approves a short-term stimulus in the run-up to these party congresses to ensure the economy looks good ahead of the political event, according to Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air. That could mean more coal-intensive construction projects.

At the same time, after an energy crisis led to skyrocketing coal prices this past fall, the Chinese leadership is also very focused on energy security, He said. During an October visit to one of China’s largest oil fields, Xi compared energy to a rice bowl that “must be held in our own hands.” Because China is rich in coal resources, that could mean an extra boost for coal in the short term.

A final political challenge when it comes to phasing out coal is that local governments hold a lot of power. Provinces have the authority to approve new coal power plants, and many are still interested in doing so to boost GDP and jobs.

In northern China’s Shanxi province, for instance, the coal mining industry employed nearly 1 million people as of 2016, compared with 11,000 in West Virginia, a state roughly half its size by area. For these provinces, getting off coal is a huge social and political predicament. “How we guarantee their jobs and support their families — that is a challenge,” said He.

These political and economic pressures create a highly uncertain path for coal over the next few years. China has committed only to start decreasing coal use between 2025 and 2030.

India, the world’s second-biggest consumer of the fuel, is projected to decrease coal’s share of power generation from 70 percent to 50 percent over the coming decade. But that comes in the context of a rapidly expanding power sector — so overall coal use should continue to increase. The IEA report projects that India will expand its coal consumption by about 4 percent per year through 2024. It’s not clear when the trend will finally start to reverse.

China’s tipping point could come sooner. Myllyvirta said he predicts coal use could start decreasing there as early as 2023, as China backs off of rounds of short-term stimulus and homes in on its long-term priority of creating a less energy-intensive economy.

But he points out that this timeline is still far from ideal climate-wise: “I’m cautiously optimistic — of course it is still far away from what would need to happen to get on the 1.5 degree trajectory.”

Source : GRID

The Big Green Push to Get Rid of Coal Had the Opposite Effect

Mike Shedlock wrote . . . . . . . . .

Investors Pushing Mining Giants to Quit Coal is Backfiring

Bloomberg has an interesting story on how Environmentalists Pushing Mining Giants to Quit Coal has backfired.

It was supposed to be a big win for climate activists: another of the world’s most powerful mining companies had caved to investor demands that it stop digging up coal.

Instead, Anglo American Plc’s exit from coal has become a case study for unintended consequences, transforming mines that were scheduled for eventual closure into the engine room for a growth-hungry coal business.

And while it’s a particularly stark example, it’s not the only one. When rival BHP Group was struggling to sell an Australian colliery this year, the company surprised investors by applying to extend mining at the site by another two decades — an apparent attempt to sweeten its appeal to potential buyers.

Now, after years of lobbying blue-chip companies to stop mining the most-polluting fuel, there’s a growing unease among climate activists and some investors that the policy many of them championed could lead to more coal being produced for longer.

BHP may end up holding on to the Australian mine it was battling to sell, Bloomberg reported last week. Earlier this year, Glencore Plc sounded out a major climate investor group before announcing it would increase its ownership of a big Colombian coal mine, according to people familiar with the matter.

Not Just China

India now burns more coal than Europe and the U.S combined and miners are betting on rising demand over the next decade from countries such as Vietnam, Bangladesh and Indonesia, although pollution concerns and cheaper alternatives threaten to derail those plans.

Tough to Eliminate Coal

The push to abandon coal made selling the mines difficult. So companies chose to extend their life.

Developing countries that invested in coal-powered electrical plants that have many years of useful life want reparations to develop new plants.

New wind and solar plants are cheaper but unreliable. And they are not cheaper than plants already built.

Moreover, wind can die for days and solar has on average 12 hours a day of outages.

This places additional capital investment requirements for countries to build energy storage facilities.

Still Building

China alone is currently building or planning coal power plants that are the equivalent of six times Germany’s entire coal burning capacity.

It’s tough to get rid of coal when you build more coal plants than you retire.


COP26 has concluded. I will do a separate report a bit later.

There were some alleged successes including a watered down pledge at the last-minute to “phase down” rather than “phase out” coal.

This is considered a “success” because after weeks of bickering no statement at all regarding coal was expected.

Credit India, with backing of China, for the watered down pledge on coal. That alone should tell you what you need to know.

The biggest failure also relates to coal.

Rich countries did not make clear pledges to finance developing nations to the tune of what developing nations demand.

Instead, nations promised to continue talking about funding for “loss and damage associated with the adverse impacts of climate change”.

That means developing nations will not make much if any effort to get off coal.

Source : Mish Talk

China Agrees Plan to Cap Key Coal Price to Ease Energy Crisis

China plans to limit the price miners sell thermal coal for as it seeks to ease a power crunch that’s prompted electricity rationing and even caused a blackout in a major city last month.

Beijing aims to cap the price of its most-popular 5,500-NAR grade coal at 440 yuan ($69) a ton at the pithead, according to people familiar with the situation, who asked not to be identified as they aren’t authorized to speak publicly. That price, which includes taxes, is a target rate, and there will be an absolute ceiling at 528 yuan, the people said.

The plan, which is scheduled to last until May 1 next year, is pending approval by the State Council, and could be revised, according to the people. The National Development & Reform Commission, the top economic planner that’s in charge of energy prices, didn’t immediately respond to a phone call seeking comment.

The energy crisis that’s engulfed the world’s second-largest economy started in part due to skyrocketing coal prices, which caused almost all coal-fired power plants in the country to run at losses. Zhengzhou’s benchmark coal futures rose to a record above 1,980 yuan a ton earlier this month, while spot prices soared even higher.

Beijing also wants downstream sales prices to be controlled, though it will let local governments set standards to limit the price of local coal trading, the people said. Coal importers will obtain subsidies to balance their losses, they said.

Source : BNN Bloomberg

中國国家发展改革委研究建立规范的煤炭市场价格形成机制 引导煤炭价格长期稳定在合理区间




Source : 微信

Chart: The Countries Most Reliant on Coal

Source : Statista