"China’s banks keep throwing cash at coal mines and power plants, undercutting Xi Jinping’s plan to slash fossil fuels"

 Source:

https://www.scmp.com/business/companies/article/3128038/chinas-carbon-reduction-target-looks-elusive-banks-keep-throwing

"China commissioned 38.4 gigawatts (GW) of coal plants in 2020, three times the 11.9GW fired up by the rest of the world.

60 of the world’s largest banks lent or underwrote US$752 billion of debt or equity issuances to the fossil fuel industry last year

On an unseasonably warm autumn day last October, the world’s largest coal-fired power plant fired up in the Anhui provincial city of Huaibei in eastern China.

Sitting in an economic development zone carved out of verdant paddy fields, phase two of Shenergy Group’s Pingshan power plant is installed with 1,350 megawatts of generation capacity, enough to meet the annual needs of 1.1 million households.

Almost four years after receiving the construction approval, the plant was formally connected to the national grid in mid-December.

The plant, boasting state-of-the-art technology that requires only 251 grams – a global record for efficiency – of coal for each unit of electricity generated, was hailed as a “national demonstration project” by local authorities and the media.

Firing it up 12 weeks after President Xi Jinping’s surprise pledge at the United Nations General Assembly for China to become carbon neutral by 2060, it also sits uncomfortably as a reminder that the world’s second-largest economy needs to walk a fine line between its environmental commitments and its development needs.

The Chinese government and the nation’s state-owned power producers have set aggressive goals on renewable energy, but plans to retire or rein back coal-powered plants – they produce a third of China’s carbon emission – failed to keep up.

China commissioned 38.4 gigawatts (GW) of coal plants in 2020, three times the 11.9GW fired up by the rest of the world, according to a February report by the Global Energy Monitor in San Francisco and the Centre for Research on Energy and Clean Air (CREA) in Helsinki.

After accounting for shutdowns, China’s net addition last year was 29.8GW, compared with the world’s net reduction of 17.2GW.

The pace of construction approvals have also tripled to 36.9GW last year alone, five times more than those initiated outside China, according to the report.

Ahead of the Earth Day leaders’ summit on climate change scheduled for April 22, researchers are doubtful that China can meet Xi’s pledge for carbon dioxide emissions to peak before 2030.

The world’s biggest emitter of greenhouse gases committed during the 2016 Paris Agreement to increase the share of non-fossil fuel to 20 per cent by 2030, from 15.3 per cent in 2020.

Xi doubled down on that commitment, increasing the contribution target by wind and solar power to 25 per cent of total energy generation, or 1,200GW, by 2030.

“If the central government allows the current levels of coal plant development to be maintained, it will at best divert important resources away from its clean energy transition, and at worst make China’s carbon neutral goals difficult if not impossible to achieve,” said the Global Energy Monitor-CREA report."

China’s coal mines, coal-fired power plants are still growing, funded by an endless stream of cheap financing by the nation’s state-owned banks, as they keep one of the country’s biggest industrial sectors humming amid an economic slowdown.

Millions of jobs and trillions of yuan of assets are at stake in the coal industry."

The nation’s big five state-owned power firms, generating more than half of China’s coal-fired electricity – State Energy Investment Group, China Huaneng Group, China Datang Group, China Huadian Group and State Power Investment Group – employ 2 million people, and have 5.5 trillion yuan (US$836 billion) of assets between them.

As many as 60 of the world’s largest banks lent or underwrote US$752 billion of debt or equity issuances to the fossil fuel industry last year, down by 9 per cent from 2019 but 6 per cent higher than 2016 when the Paris Agreement took effect, according to a March 24 study by six non-government organisations (NGOs) including the Rainforest Action Network and BankTrack."