China’s President Xi Jinping said during his address at the United Nations General Assembly on Tuesday that the country would stop investing in new coal-fired power plants abroad and will instead help developing nations build green and low-carbon energy. The move came as Beijing faced mounting pressure to end its overseas coal financing and step up measures to slash carbon emissions.
Analysts said China’s move would deal a massive blow to miners, especially those in Australia and Indonesia. A report by the environmental group Market Forces showed the world’s coal power development pipeline has plunged by 76% since the Paris Climate Agreement in 2015. Now, the group expects the trend to accelerate after China’s announcement.
Analysts said that the latest policy would cull around $50 billion of investment earmarked for 44 coal plants in countries like Indonesia, Vietnam, Pakistan, Bangladesh, Serbia, and South Africa. Analysts estimated that if materialised, the plan would potentially cut future CO2 emissions by 200 million tons/year. Another think tank said Beijing’s move would put at risk 29 GW of coal-fired plants to be built in Indonesia beyond 2025.
Australia and Indonesia have been the world’s leading coal exporters. Together, the two countries account for more than half of total global coal shipments. The Australian coal industry is gambling on coal-fired power plants in developing countries to replace the decline in South Korea and Japan. Meanwhile, Indonesia intends to diversify its downstream coal industry even after bringing forward its net-zero emission target from 2070 to 2060.
An energy consultancy expects global coal demand to peak in 2024 at roughly 10,000 TWh. However, it said the projection might be revised down to 6,000 TWh by 2040 after China’s move Pandu Sjahrir, the chairman of Indonesia Coal Miners Association, said the world’s peaking demand is the “new normal” for the coal industry.
