Year in Review: Air Pollution and Clean Energy in 2021

Featured image: Early morning windmill sunrise in the mist. Credit: Sander Weeteling/Unsplash

This year has seen some major global developments surrounding the urgent need to tighten regulations everywhere in order to drastically cut air pollution levels. Current measures have not been enough, but 2021 has seen unprecedented progress. The issues of phasing out coal and ending financing for fossil fuels received new levels of attention internationally as both developed and developing countries announced ambitious long-term targets regarding coal and reaching carbon neutrality.

Google search trends for “net zero”

However, after record drops were experienced in 2020, global fossil fuel consumption and air pollution rebounded all the same. Governments have failed to target COVID-19 recovery spending towards emission reduction measures, and despite progress, clean energy investments are still not sufficient enough to push down global emissions in a sustained and speedy way.

One of the most important breakthroughs on the air pollution front was the World Health Organization’s (WHO) new air quality guidelines. The organization finally recognized that air pollution is dangerous at much lower levels than indicated by its 2005 air quality guidelines, which should prompt governments to update their national standards.

The United Nations Climate Conference (COP26) in November set out ambitious targets on global commitments to improve energy and air quality. Many emerging economies committed to coal phaseouts for the first time, including Vietnam and Indonesia. Some developed countries and major emitters — the USA, Australia and Japan — acknowledged the need to phase out unabated coal for the first time but should have stronger pledges to keep warming below 1.5 °C. A major challenge of 2022 is to turn the aspirations announced in Glasgow into firm policies and targets for this decade.

This winter is already seeing Europe, China, and many other regions facing a fossil fuel crunch, with sky-high electricity prices hitting consumers. These crises are both a clear sign and an opportunity to reduce reliance on fossil fuels, as they further increase the economic competitiveness of producing clean energy.

To control pollution, countries develop national ambient air quality standards (NAAQS), which set concentration limits on critical pollutants. The standards, as well as their monitoring and enforcement, vary from country to country but should look to the World Health Organization (WHO) guideline values, which reflect the most recent scientific evidence on air pollution exposure and the resulting burden of disease.

An unintended consequence of the measures against COVID-19 has resulted in the fall in consumption of fossil fuels, and improvement in air quality, around the world. Reductions in nitrogen dioxide (NO2) concentrations have been significant, as traffic is the main emitter of NO2 in most cities. Some cities saw a decline of more than 60% in their NO2 levels, including China.

As economies are recovering from the pandemic, and production and transport have largely resumed in 2021, one might worry that air quality would bounce back to pre-COVID levels. We have looked at main cities in various regions of the world and compared NO2 levels in 2021 to those in 2019, after controlling for weather conditions, as seen in the chart below.

NO2 levels in 2021 vs 2019

In China, Europe and the United states, most cities if not all have had lower NO2 levels in 2021 compared to 2019, meaning air pollution has not reverted to pre-COVID levels. This contrasts with India and Turkey where several important cities have seen air pollution ‘overshooting’ pre-COVID levels.

The updated WHO standards reflect strengthened standards in general, but most notably for PM2.5 and NO2. However, SO2 standards were weakened. Our analysis of the new guidelines showed that countries would have to drastically reduce the use of fossil fuels to meet the new standards. Aligning national standards will be a crucial and guiding step in the coming year; CREA has created its own air quality standards tracker and estimations of potential health impacts under both national and WHO guidelines to emphasize the urgency of such an action.

COP26 pledges could lead to cleaner air

On the energy and clean air front, the COP26 commitments to phase out domestic coal use are among the most notable. Our research found that the pledges presented in the run-up to and at the Glasgow Summit upped the number of coal plants with a phaseout date. This number increased from 380 in 2020 to 750 coal-fired power plants (550 gigawatts). Only 170 plants (89 GW) are not covered by a carbon neutrality or a phaseout date commitment — that is 5% of the operating fleet today. Major coal users are facing significant fossil overcapacity on their grids; CREA is working on quantifying the capacity that should be prioritized for closure.

“No new coal” or fossil fuel financing pledges questions the future of 90 new coal power projects (88 GW), on top of 130 new projects (165 GW) that could be canceled to achieve new zero-carbon targets. 

COP26 also took steps to increase financing of climate mitigation and adaptation for developing countries. Some 29 countries committed to end direct international public support for unabated fossil fuels by 2022 and redirect this investment to clean energy. Financial pledges from the Asian Development Bank, Climate Investment Fund, and the Just Energy Transition Partnership will support decarbonization efforts in India, Indonesia, the Philippines, and South Africa. 

According to the UN, this year’s climate pledges put us on track for 2.5°C of warming by the end of the century — down from the 4°C trajectory the world was on before the Paris Agreement. Setbacks included the USA’s clear absence from the coal phaseout pledge and the “phase down” language initiated by China and India. 

In addition, several major emitters’ targets are not yet aligned with the Paris Agreement goals, and many still lack credible pathways to achieve deep emission cuts by 2030. The 1.5 °C goal — which could mean the survival of many nations and communities, and saving millions of lives affected by persisting air pollution from fossil fuels — is still within reach. The stage has been laid for the world’s most polluting fossil fuel to finally make its exit. The COP26 outcome document, the Glasgow Climate Pact, calls on countries to outline even more ambitious national action plans, moving the original deadline of 2025 to next year’s COP27 in Egypt.

Regional Overview

In a year of many developments in the climate and energy space, our analysts give their take on the highlights in their respective regions.


In the beginning of 2021, China’s recovery from COVID-19 lockdowns was in full swing, driven by the construction and heavy industry sectors, which has resulted in the fastest increase in CO2 emissions in more than a decade.

Early 2021 saw the discussions of carbon neutrality and peaking CO2 emissions reaching the top of the political agenda, with important statements made by president Xi Jinping and the politburo, and the issuance of the country’s new five-year plan, which takes “baby steps towards carbon neutrality”.

The government started an ambitious effort to wean the economy off of its reliance on real estate and construction as growth drivers, due to concerns about mounting debt and misallocated investments (“low-quality growth”). This, on the other hand, led to a drop in the country’s CO2 emissions in recent months. 

China is preparing for the Winter Olympics in February 2022. Air quality has continued to improve steadily, thanks to strenuous efforts by the country’s environmental regulators, as shown by our Winter Targets Tracker. However, pollution levels remain high, and with February being the peak of smog season, the government is expected to resort to widespread factory closures and restrictions on cars and trucks to ensure blue skies. 

Solar power and electric vehicles, along with other low-carbon technologies, have taken off rapidly, buoyed by the new emphasis on carbon neutrality. Nevertheless, the construction of new coal power plants, coal-based steel mills and other high-emissions industrial capacity continues, and the government has not been willing to set firm targets to limit emissions growth before 2030. The timing and level of China’s CO2 emissions peak remains the most important open question.

Solar cell production


This year, the European Commission presented the “Fit for 55” package as part of the EU’s Green Deal with key elements including an update on the EU Emissions Trading System (ETS) and establishing a Carbon Border Adjustment Mechanism (CBAM). The package aims to achieve at least a 55% reduction in net greenhouse gas emissions by 2030 compared to 1990 levels. 

Europe has been facing a power crisis characterized by sky-high commodity prices for gas, coal and carbon, partly as a result of a gas shortage crisis that highlights the issue of reliance on fossil fuels. Further adding to its economic woes, a growing body of research is highlighting the environmental and health impacts of gas. Fossil gas functioning as a transition fuel in Europe and the rest of the world should be seriously questioned.

As a result of the high gas prices, there has been a temporary shift back towards coal generation that will unwind as prices normalize. The situation has led to record CO2 prices, with the emissions trading system counteracting the pressure to increase coal use. During the third quarter of the year, many European countries were able to rely on renewables to cover power demand. Between July and September, wind and solar capacity delivered 19% of all power generation, or an average output of 50 GW. The EU’s target to increase the share of renewables in the energy mix to 40% could ease vulnerability to such spikes.

Combined wind & solar reached an all-time high in July-September 2021

Meanwhile, Portugal became the fourth country on the continent to close all coal plants and go coal free. Germany presented a possible 2030 coal phaseout in its new coalition agreement, along with increasing renewables’ share in electricity production to 80% by 2030. The German treaty will also push the EU and international partners in numerous ways, such as establishing an EU CO2 price in the transport and buildings sector and establishing a minimum CO2 price as part of an international Climate Club. However, missing from the treaty is any mention of the Nord Stream 2 gas project. 

Other countries such as Poland and Ukraine have sent mixed messages regarding their phase out of coal although both countries are significantly impacted by pollution from their coal power plants, which lack stringent policies to control pollutant emissions. Poland generates around 70% of its power from coal. Additionally, Ukraine state-owned power plants are scheduled to close by 2035, but private energy companies have set an extra five years to be shut down. 


India started a rebound of economic activities which resulted in air pollution late last year, as most of its energy needs still come from polluting fossil fuels; some 80% of annual electricity demand is met by thermal energy. But while this year recorded the highest ever peak demand for electricity in July (200 GW), the lowest ever share of coal-based electricity in the generation mix —  56% in August — was also reached.

Like many other major economies, India went through a visible coal shortage at power plants. The main reason was not resource scarcity, but resource management by the miners, power generators and regulators, as highlighted in CREA’s brief.

Share of various sources of electricity generation in daily electricity generation mix in India, 2018-2021

An earlier report by CREA also found that the country had nearly 67 GW of overcapacity in installed coal-based power. Retiring this capacity could save India a minimum of approximately USD 198 billion (INR 15,000 crore) yearly in terms of fixed operating costs. 

While China and other major economies announced the net zero targets before Glasgow, the pressure was mounting on India to follow the trajectory. India finally announced a commitment to achieve net-zero — although not until 2070 — but the 500 GW target for installed renewable energy capacity is one that stands out. If India achieves this, it would mean that the country’s coal-based electricity will peak around 2027.

While positive actions were taken to tackle air pollution and to move towards faster energy transition, India continues to support coal, auctioning of new coal mines continues, and the timeline to control air pollutant emissions from coal power plants across the country has been extended. Coal plants which had to install Flue Gas Desulphurisation (FGD) by 2019-2022 now have staggered extensions running from 2022 to 2025.

In November 2021, the Commission on Air Quality Management (CAQM) directed six coal plants to close down to tackle the air pollution emergency, acknowledging coal-based power generation as a major source of air pollution in the region. However, the action did not result in significant emission load reductions; the directed power plants were already shut down a week or more before the directions were issued.

Southeast Asia

In Southeast Asia, COVID-19 recovery efforts saw air pollution rebounding towards the second quarter of the year but to varying degrees. Long-term policies and campaigns to reduce dependence on fossil fuels in the region have made promising headways in 2021.

Vietnam became the first country in the region to fully commit to a coal phaseout, which is now backed by a 2050 carbon neutrality target. This will require revising key development policies, including the Power Development Plan, Climate Action Plan, and Green Growth Strategy — moves that could avert an exponential increase in air pollution. A draft of the PDP8 included provisions for 30 new coal power projects over the next two decades, which we estimated would cost USD 270 million annually in healthcare, welfare, and economic losses as a result of coal pollution. A new cornerstone environmental law is expected to be finalized in early 2022. 

In Indonesia — the region’s largest coal consumer and producer — a landmark Citizen Lawsuit filed against President Widodo and governmental officials in Jakarta, Banten and West Java, reached a verdict that found they erred in their responsibility to control air pollution in Jakarta. This is a mandate to urgently address air quality through coordinated efforts, especially as the court acknowledged the impact of transboundary pollution from power plants and industrial facilities in Banten and West Java on air quality

While coal is expected to remain in the electricity mix until 2060, the uneconomic landscape for coal and existing overcapacity on the power grid could drive this date earlier. Policies such as the 2019 Emissions Standards for coal plants could aid decarbonization efforts, but we saw no enforcement of these on existing or planned plants, which has the potential to control emissions and disincentivize continued coal operations.

In the Philippines, gaps in the implementation of the Clean Air Act are making the country fall behind regional and global best practices. An estimated 66,000 premature deaths annually can be attributed to poor air quality; the bill for neglect amounts to $87.6 billion. Energy transition efforts, such as the greenfield moratorium on coal and the Green Energy Option Program could increase renewable deployment. Existing pollution reduction efforts, in line with the Clean Air Action plan, such as increased monitoring and the revision of emission standards to fully protective levels, need more support.

China’s pledge to halt financing for new coal plants abroad has the potential to significantly cut the coal pipeline in the region. We found that almost two-thirds of planned coal projects have yet to secure a financial agreement, which could lead to further cancellations and leave only 22 GW of coal in construction and planning phases. This is a huge opportunity to divert financing from fossil fuels towards clean energy technologies to aid in the economic bounce back and development of countries.