1-Year Later: China’s Ban on Overseas Coal Power Projects and Its Global Climate Impacts

One year after President Xi Jinping announced China would “not build new coal-fired power projects abroad“, there has been a significant dent in the country’s planned coal pipeline overseas.

Approximately 104 coal plants — 102 gigawatts (GW) — in 26 countries were planned, considered, or in construction under either Chinese financing or engineering, procurement and construction (EPCs) agreements at the time of the announcement. While more than 13% of these projects have already been completed, the potential for China’s ban to stop new coal and avoid additional carbon emissions from the pipeline remains enormous.

To highlight the continued importance of this ban, this report has evaluated China-backed overseas coal power plants according to their current status in the development process as of the end of August 2022. The plants were then grouped according to their existing or potential impacts on carbon emissions:

If the proposed coal capacity in limbo is officially cancelled, it could result in an avoidance of 341 million tonnes of CO₂ emissions annually — equivalent to the United Kingdom’s energy sector CO₂ emissions in 2021. This total avoidance would rack up to an estimated 8.6 billion tonnes of cumulative CO2, assuming that all of these coal plants would have retired by 2050, which will be crucial to evade 2°C of warming and keep with the Paris climate targets.

  • OFFICIALLY CANCELLED: 26 plants (21 GW) were removed from the pipeline, avoiding the addition of 85 million tonnes of CO2 per year. The majority of cancellations have been initiated by host countries; others have been cancelled/shelved due to poor project economics, years of legal challenges and local resistance, or delays in securing financing or permits.
  • SHOULD BE CANCELLED: 33 plants (36 GW) would avoid an additional 172 million tonnes of CO₂ from coal per year. Because these projects are still in the process of securing financing or permits, it is still possible for them to be cancelled or stopped. Vietnam leads with 6.4 GW, and several projects retained in the country’s newest PDP8 draft already have difficulty in securing financing. Countries such as Mongolia (6.1 GW) and Laos (6.3 GW) have coal planned for exporting electricity to neighbouring countries but such a move would leave these countries at great risk of stranded assets.
  • COULD BE CONVERTED TO RENEWABLES (RE): 16 plants (17 GW) in pre-construction can be converted to RE, or reconsidered for cancellation to avoid 84 million tonnes of CO₂ annually —approximately Colombia’s CO₂ emissions from its energy sector in 2021. Because permitting and/or financing contracts have already been signed, a project will need to get built to ensure there is no breach of contract. However, because no physical infrastructure is in place yet, it is still possible for contracts to be renegotiated to renewables. Included in this list are 4 new coal projects whose contracts were signed after China’s UNGA commitment, which suggests they are in violation of the ban.
  • NEAR COMPLETION: 27 plants (23 GW) well in construction means 104 million tonnes of CO₂ annually will come online. All of these plants were already in construction at the time of Xi’s announcement, with the most number of plants found in Indonesia (7.8 GW or 9 plants), followed by India (3.4 GW), Pakistan (2.6 GW) and Vietnam (2.5 GW).
  • TOO LATE: 7.6 GW or 14 plants entered into operation, adding approximately 1.04 billion tonnes of CO2 from coal if they operate until 2050 (36 million tonnes of CO₂ annually).  

This report is available in Chinese or English.

Isabella Suarez (CREA); Xiaojun Wang (PACS)

Partners: People of Asia for Climate Solutions (PACS)

China, Global, South East Asia