Breaking Through to Blue Skies: 2017 China Coal Consumption Cap and Energy Transition International Workshop Held in Beijing

2017-11-30

As China’s economy has rebounded this year, coal consumption rose 5% year-on-year in the first half of 2017, and increases in coal consumption in power and industry have presented a serious challenge to efforts to cap coal consumption in China. The “Breaking Through to Blue Skies” Workshop is a core piece of the China Coal Consumption Cap Project’s work in 2017. On November 30, the fourth China Coal Consumption Cap and Energy Transition International Workshop convened in Beijing. The workshop was organized by the China Energy Conservation Association and the China Coal Cap Project group, in collaboration with the Children’s Investment Fund Foundation (CIFF), the World Wildlife Fund (WWF), Energy Foundation China (EFC), and the Natural Resources Defense Council (NRDC), and with the support of China5e and Beijing Energy Club. In attendance were over 350 participants, including officials from related government ministries, regional and local government representatives, Chinese and foreign experts in the environment and energy field, and members of research organizations, enterprises, NGOs, and the media.

China unswervingly adheres to the road of green development, with full confidence in achieving the goals of the Air Pollution Action Plan

In his report to the 19th National Party CongressChinese President Xi Jinping pointed out that it is necessary to speed up the reform of ecological civilization and build a beautiful China. China will speed up the establishment of a legal system and policy guidance on green development, and build a green, low-carbon and circular development economic system. China will establish a market-oriented green technology innovation system, develop green finance, and expand the energy-saving, environmental protection, clean production and energy industries. Furthermore, China will push forward the revolution in energy production and consumption, to build a clean, low-carbon, safe and efficient energy system. The statement fully reflects the determination of the Chinese government to firmly pursue the road of green development, promoting economic development in parallel with improvement of the environment.

 During the meeting, Liu Shijin, vice chairman of China Development Research Foundation, gave a keynote speech on the opportunities and challenges facing China’s economic development in the new era. He pointed out that, looking at the factors and conditions that support China's economic growth, end-use demand sectors such as real estate and major industrial products such as steel and coal have successively reached historical peaks in demand, the rate of growth has clearly slowed down, and overcapacity and over-stocking of products are all key issues. As the price of land resources rises and the pressure on the ecological environment increases, the country has realized the importance of a green economy and ecological civilization. The report of the 19th Party Congress sets the goal of “establishing and improving an economic system for green, low carbon and circular development." China can no longer sacrifice the nature resources in exchange for the old path of economic development; instead, China should take green development as the main direction of economic development in the future.

 In his speech, Liu Shijin pointed out that green development includes but is not limited to the traditional concept of environmental protection, but is an all-round economic and social revolution that includes major changes in consumption patterns, production patterns, circulation patterns, life styles and innovations, bringing about new consumption incentives, economic growth incentives and innovation and development opportunities. In the long run, a new mode of economic development and social civilization will be formed. Green development has changed the concept and methods of cost-benefit accounting. Green development should not be expensive. As innovative technology develops, it should also be low-cost, high-yielding, and internationally competitive.

 This year is the final year of the "Air Pollution Action Plan". He Kebin, Dean of Tsinghua University's School of Environment and academician of the Chinese Academy of Engineering, said at the workshop that China is confident in its environmental protection efforts. The system of pollution sources that China faces is the most complicated system in the world. Perhaps the most advanced production systems in the world are found in China, as well as the most outdated production processes. The result is that China faces one of the world’s most complex challenges for regulating pollution sources. China has taken a unique path that combines the work of domestic researchers and practitioners with international experience. This roadmap is innovative and very effective. As 2017 is the final year of the first phase of the "Air Pollution Action Plan", we believe that China’s smog can be well managed. 

China's Dispersed Coal Comprehensive Management Report released: Finds that more than 90% of dispersed coal for civilian use is used for winter rural heating in northern China

At the workshop, the China Coal Cap Project issued the "Report on China's Dispersed Coal Comprehensive Management 2017". The report covers dispersed coal in rural and urban areas, dispersed coal from agriculture, commercial and public agencies, small coal-fired boilers and small-scale industrial coal-fired boilers of 35 steam tons per hour and below in the industrial sector. According to the report, it is estimated that about 750 million tons of dispersed coal were consumed nationwide in 2015, mainly in the industrial and residential sectors. Among them, phasing out small coal-fired boilers of 10 steam tons and below is key to management of small coal-fired industrial boilers.

 The report points out that coal in rural areas is mainly used for heating, cooking and hot water boiling; of which, about 200 million tons of coal is burned for winter heating, accounting for 91% of dispersed coal for residential use and about 27% of dispersed coal in total. Thus, residential coal consumption is focused in time and location. Peak consumption is in the winter heating period, which is dominated by the northern region and involves the need for heating tends of thousands of households in winter. Xi Jinping, at the 14th meeting of the Central Financial and Economic Leading Group, stated that promoting clean heating in the northern area of the country will benefit the people in northern area in the winter time and reduce smog, and is crucial to the energy revolution and life style revolution in rural areas. Finally, the report sets forth the coal cap project’s goal to reduce dispersed coal use in China by 200 million tons by 2020.

Industrial sectors and local governments work together to achieve the coal cap goal

For the first time, the 13th Five Year Plan for Energy Development has set a mandatory control target for coal's share in energy consumption: reducing the share of coal in total energy consumption to 58% or below by 2020 and reducing the coal consumption for coal power plants to 310 grams of standard coal equivalent per kilo-watt hour or less. This is very meaningful for promoting energy transformation, air pollution control and climate change. However, coal consumption in the first three quarters of 2017 increased, with coal consumption in the industrial sector increasing by 1.6% compared to last year. This should serve to alert us and highlight that implementation of coal cap policies in industry is key to achieving the goals of the Air Pollution Action Plan and winning the battle for blue skies.

 Yang Fuqiang, Senior Advisor for Climate and Energy at NRDC, summarized the achievements from in the previous work of the China Coal Cap Project and pointed out that effective measures should be taken to keep coal consumption in a downward trend, and ensure that industrial and local coal cap experiences and efforts work together to achieve the goal of reducing 420 million tons of coal consumption by 2020 compared with 2015. By doing so, we can achieve decoupling of economic development and carbon dioxide emissions. Representatives from industrial sectors and local governments shared their lessons from supply-side structural reforms in coal-intensive industrial sectors and recommendation for the next steps, research findings on carbon emissions and actions under 1.5C scenario, and provincial and city coal production and consumption caps and energy development strategies.

The UK Shared Its Experience Phasing Out Coal Power and the Establishment with Canada and Other Countries and Regions of the “Powering Past Coal” Alliance

British Embassy Energy Team Head Jessica Henry introduced the UK’s experience phasing out coal power. She noted that although the UK was the first country to use coal power, coal power generation began to decrease beginning in the 1990s. The reasons for this decrease include the increased use of gas from the North Sea, the privatization of the electricity industry increasing market competition, the establishment by the government of a carbon dioxide emission performance standard for the power sector and a carbon tax, and the strengthening of policies to encourage energy efficiency and renewable energy development. As a result, Coal power generation has continuously decreased from 2012, and on April 21 of this year, the UK for the first time since the industrial revolution achieved its first day without the use of coal power.

In order to strengthen energy structure transition and low carbon policy, the UK government has already announced that it will phase out the use of coal power that does not have Carbon Capture and Storage (CCS) installed and operational by 2025. At the 23rd UN Climate Change Conference in Bonn, Germany recently, the UK and Canada, and more than 20 countries and regions (including France, Italy, Mexico, and Washington State in the United States) established the “Powering Past Coal” Alliance. The Alliance members promise to progressively phase out the use of coal power and to prohibit the construction of new coal power plants that do not install and operate CCS. Ms. Henry expressed that the UK government would like to share its experience in reducing and phasing out coal power, and to cooperate with China on strengthening coal control and energy transition policies.


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