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China “has no other choice” but to depend on coal energy for now, the official said.

BEIJING – China has ambitious targets to cut its carbon emissions, but it will not abandon coal energy anytime soon, as it has an eye on economic targets.

President Xi Jinping said in September that the country’s carbon emissions would begin to decline in 2030 and said the country would achieve carbon neutrality in 2060 – in four decades.

In the meantime, lawmakers are making it clear that economic growth remains a priority – and that growth depends largely on coal energy. Beijing has a GDP target of 6% this year, a level that analysts say would allow officials to deal with long-term problems, such as the country’s high debt levels.

Many developing countries don’t even have electricity. In that situation, if you don’t use coal, what will you use?

“China’s energy structure is dominated by coal energy. This is an objective reality, ”said Su Wei, deputy secretary-general of the National Development and Reform Commission. CNBC translated his comments into Mandarin, which he made at the end of last week, following Xi’s separate comments at a US-led climate summit.

“As renewable energies (sources like) wind and solar are intermittent and unstable, we must rely on a stable energy source,” said Su. “We have no other choice. For a period of time, we may need to use coal energy as a flexible set point. “

He added that coal is readily available, while renewable energy needs to develop further in China.

Financing coal energy outside China

Separately, on Tuesday, when asked by CNBC whether Beijing could follow South Korea in its pledge to stop public funding for overseas coal-fired power plants, China’s ecology ministry indicated that China’s energy financing from coal in the developing world will continue.

“China supported some developing countries to build coal-fired plants abroad,” Li Gao, director general of the ministry’s climate change department, told reporters in Mandarin translated by CNBC. “China offers this support according to the local situation.”

“Many developing countries don’t even have electricity,” he said. “In that situation, if you don’t use charcoal, what will you use?”

According to the Boston University Global Development Policy Center, the China Development Bank and the China Export and Import Bank, together, financed $ 474 million in coal sector projects outside of China in 2020 alone. .

The same report indicated that China’s funding for energy projects across its borders has steadily declined since 2016, however.

Li said that coal accounted for 56.8% of China’s domestic power generation in 2020, down from 72.4% 15 years ago. Last year, China was the world’s largest emitter of carbon dioxide, according to the Union of Concerned Scientists, a nonprofit organization founded by MIT. The United States was in second place and India in third.

During last week’s climate summit, Xi called for international cooperation to reduce carbon emissions, adding that different countries must play different roles in that reduction. He did not identify any country by name.

Xi said that China “will strictly control coal generation projects” and will limit increases in coal consumption over the next five years. He said the reductions would occur over the next five years.

System ‘favors coal generation’

The Chinese authorities have tightened restrictions on carbon emissions this year in a targeted manner, such as through production cuts at the steel center in the city of Tangshan.

However, China is still increasing the construction of coal-fired power plants. An analysis by the US Global Energy Monitor indicates that last year, China built more than triple the amount of new coal-fired power capacity than the rest of the world combined.

China is the world’s largest consumer of coal. At the end of last year, some parts of the country cited a shortage of coal to limit the use of local energy as demand for electricity soared. Electricity use in China increased 3.1% last year, according to official figures.

The Chinese government plans to reduce the share of heavy carbon fuel in national energy consumption to 20% by 2025, analysts from the Chinese Renaissance said in a report last month. But they noted that the decreasing costs of renewable energy are not enough to encourage a major shift in the industry.

“We believe that the current system greatly favors coal generation, partly because it is more stable and faces less variability in wind and solar energy,” said the report. “Uncertain market access has already slowed investment in renewable energy. Given the power of coal and construction interests, the necessary reforms are likely to require considerable political will. ”

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