IER

Asian Countries Are Growing Their Economies With Coal

As the United States is reducing its coal-fired electricity, Asian countries are increasing their generation from coal. In 2018, the United States generated just 27 percent of its electricity from coal—a large reduction from coal’s 50 percent share in 2005. According to BP’s Statistical Review of World Energy, during that same period, India increased its share of electricity generated from coal from 68 percent to 75 percent, South Korea from 38 percent to 44 percent, and Vietnam from 21 percent to 41 percent. While China’s share of coal-fired generation went down during those 13 years—from 79 percent to 67 percent—it has more than doubled its coal-fired generation in absolute terms. As a result of these changes, U.S. carbon dioxide emissions declined by 12 percent over that period, while the carbon dioxide emissions in the Asia Pacific region increased by 50 percent—led by China with a 56 percent regional share. This has made environmentalists and forecasters worry that these countries will not meet their Paris commitments.

China’s economic rise was based on coal—the country’s most abundant energy resource—resulting in China becoming the world’s largest emitter of greenhouse gases. India seems to be ready to follow in China’s footsteps, having surpassed China as the world’s fastest-growing economy. India’s economy is expected to grow by 7 percent this year, ahead of the 6.3 percent growth expected for China. The economies of all of Developing Asia are expected to grow by about 5.7 percent, with the majority of the economic expansion located in Southeast Asia.

The Asian Development Bank, International Renewable Energy Agency, and United Nations are pushing governments in South and Southeast Asia to phase out coal in power generation, improve industrial energy efficiency, and develop cleaner transportation alternatives. Through a memorandum of understanding with the International Renewable Energy Agency, Southeast Asian countries are looking to obtain 23 percent of their energy from renewable sources by 2025.

However, the competition from expanding their economic growth and thereby improving the lifestyles of their citizens versus reducing their greenhouse gas emissions may put their commitments to the Paris accord in jeopardy.

China

Despite China’s commitment to the Paris accord, approvals for new coal mine construction in China increased over five-fold in 2019, with the expectation that coal consumption will increase in the future. China’s energy regulator approved the construction of 141 million metric tons of new coal production capacity from January 2019 to June 2019, compared to the 25 million metric tons they approved last year. The projects include new mines in the regions of Inner Mongolia, Xinjiang, Shanxi, and Shaanxi that are part of a national strategy to consolidate output at dedicated coal production “bases”, as well as expansions of existing collieries.

While large cities such as Beijing have cut coal use and shuttered many small mines and power plants, China is still allowing for significant increases in coal production and coal-fired power generation. Chinese coal output increased 2.6 percent in the first-half of 2019 to 1.76 billion metric tons. Further, the research unit of the China State Grid Corporation recently projected that total coal-fired capacity would peak at 1,230 to 1,350 gigawatts, which results in an increase of about 200 to 300 gigawatts.

In addition, the BBC reported last year of China’s possible ongoing construction of as much as 259 gigawatts of new coal capacity—an amount equal to the entire U.S. coal fleet.

China believes it can continue to increase coal production and consumption and still reduce emissions. It has made “ultra-low emissions” (or “ultra-super critical”) technology mandatory in all new coal power plants and is improving mine zoning regulations to minimize pollution. By the end of last year, 80 percent of its coal-fired power capacity had installed “ultra-low emissions” equipment, amounting to 810 gigawatts.

China’s investments in nuclear and renewables are still insufficient to cover rising energy demand. China plans to increase the share of non-fossil fuels in its overall energy mix to 15 percent by the end of next year from around 14.3 percent currently, and to 20 percent by 2030.

Conclusion

Asian economies are growing and need energy to fuel them. The competition from expanding economic growth versus reducing their greenhouse gas emissions to meet the Paris accord seems to be in conflict. The largest greenhouse gas emitter in the region (and world), China, seems to be maintaining current levels of coal output for the next several decades as well as increasing its oil and gas consumption, which would put its commitment to the Paris accord in jeopardy. Its words say one thing, but its actions say quite another.