(November 14, 2019 Beijing) The 2019 Sixth Annual China Coal Consumption Cap and Energy Transition International Workshop, co-sponsored by the China Energy Conservation Association and China Coal Cap Project, co-organized by the Children’s Investment Fund Foundation (CIFF), the Energy Foundation (EF), the World Wide Fund for Nature (WWF), and the Natural Resources Defense Council (NRDC), and supported by the China Energy Network and the Beijing Energy Club, was held in Beijing on November 14th, 2019. The UN Secretary General’s Special Envoy for the Climate Action Summit Luis Alfonso de Alba sent a video message to the conference. Guests attending the conference include Chen Wenling, Chief Economist at the China Center for International Economic Exchanges, Du Xiangwan, Academician and former Vice President of the Chinese Academy of Engineering, Wang Jiyang, Academician of the Chinese Academy of Sciences, and Fang Qing, Vice President of the China Energy Conservation Association. International experts representing the UK, South Chungcheong Province of South Korea, the EU, Germany and the US spoke on the coal and energy transitions policies and actions taking place in their regions. Over 300 representatives from central and local governments and domestic and foreign research institutions, enterprises, and environmental organizations attended the meeting.
The China Coal Cap Project predicts that, in 2020, China’s total coal consumption will reach 3.86 billion tons and coal’s share of total primary energy consumption will fall to 55.3%, achieving the mandatory 2020 consumption targets of 4.1 billion tons of coal and a 58% share set forth in the 13th Five-Year Plan. However, China will have difficulties achieving the China Coal Cap Project’s targets of 3.5 billion tons of coal consumption and a 55% share of total primary energy consumption. 2019-2020 is a key year for continuing to deepen supply-side structural reforms, implementing the Three-Year Action Plan for Winning the Battle for Blue Skies and for poverty alleviation. It is also an important turning point for the China Coal Cap Project to further promote the implementation of a coal cap. In the face of increasing pressure from global emission reductions and China’s economic slowdown, as well as the 2017 and 2018 rebound in China’s coal consumption, effective bottom up measures should be taken to ensure the realization of the 13th Five-Year Plan’s coal cap targets. The Project is working to lay a good foundation for the 14th Five-Year Plan coal cap work, to contribute to the realization of the vision of a “Beautiful China” by 2035, and to achieve the carbon reductions necessary for limiting global temperature rise to 1.5°C under the Paris Agreement.
From 2013-2018, China’s GDP grew at an average annual rate of 7%. China’s total primary energy consumption increased by 470 million tons of standard coal, but total coal consumption decreased 300 million tons from its peak in 2013. In the keynote speech “Changing Situations during the 13th Five-Year Plan in China and Abroad”, Chen Wenling pointed out that China’s economy is moving from a stage of high-speed growth to a stage of high-quality growth. The quality of economic development is continuing to improve, and China’s energy transition and structural adjustment are reaching a critical turning point in history. In the first three quarters of 2019, China’s GDP increased by 6.2% year-on-year. In the face of the economic downturn, China should strengthen the cultivation of next generation energy-saving and emission-reduction technologies, information and digital technologies, biotechnology, new materials and other emerging industries, and should vigorously promote the development of wind power, solar power, and other renewable energy. New economic growth points will drive healthy, high-quality economic development, avoiding increasing infrastructure investment and thus avoiding stimulating the growth of high-energy-consuming industries with significant coal consumption.
In the morning’s Dialogue with Academicians, academicians including Du Xiangwan and Wang Jiyang discussed issues related to China’s energy transition, specifically how to achieve the goals of the 13th Five-Year Plan in terms of energy structure transition, climate change, environmental governance, energy conservation, emissions reduction, the clean and efficient use of coal, and clean energy development. The Academicians stressed that, due to the serious environmental damage caused by coal mining, transportation, conversion, and utilization, low-quality high-carbon coal must be more cleanly utilized. “Ultra-low emissions” coal can reduce pollutant emissions but does not reduce CO2 emissions, and the problems of heavy metals, wastewater, and solid waste have yet to be solved. Cleaner coal use does not mean that coal is a clean source of energy. Du Xiangwan pointed out that both coal reduction and smart utilization of coal is important. Capping China’s coal consumption will not cap economic growth. Coal cap is a long-term strategy for a high-quality development. We need to look at China’s energy resource from a new perspective. It is true that China has abundant coal and little oil and natural gas. It is also true that the country has abundant renewable energy resources. China should gradually build a non-fossil fuels dominant energy structure. This is strategically important for ensuring the country's long-term energy security and low carbon energy transition.
Luis Alfonso de Alba stressed that coal is the largest contributor to global CO2 emissions. CO2 emissions from global coal consumption rebounded in 2017 and 2018. Alba pointed out that China’s shift to a low carbon economy has great importance to the world, as a contribution to meeting the target of climate neutrality by 2050, and as an example for other rapidly developing countries to find ways to develop in a way that relies less on coal and other fossil fuels, and provides greater health, environmental and climate benefits to their citizens.
At the panel discussion “International Experience and Lessons in Coal Phase-Out and Energy Transition,” representatives from the United Kingdom, South Chungcheong Province, Europe, Germany and the United States introduced their coal reduction experiences. These experiences can provide useful lessons for China’s coal consumption reduction efforts. In order to achieve the 1.5°C emissions reduction target, many countries and localities have issued a timetable to phase out coal. Germany announced that it will completely abandon coal power by 2038 at the latest, and promised to increase the proportion of renewable energy generation from the current 38% to 65% by 2030. The UK is on the way to closing all of its coal-fired power facilities ahead of its 2025 deadline. The EU is providing assistance to its coal mining regions to help them transition from coal. In addition, South Chungcheong Province, home to half of South Korea’s coal-fired power generation capacity, is the first region in Asia to join the Powering Past Coal Alliance (PPCA). Current PPCA members, including 32 countries and 25 regional governments, are all committed to completely phasing out coal power in the coming years. Even the United States, which has announced its withdrawal from the Paris Agreement and the abolition of the Clean Power Plan, has continued to reduce its coal consumption, which is expected to fall 14% year-on-year in 2019. Jake Schmidt, Managing Director of the Natural Resources Defense Council’s (NRDC) International Program, pointed out that while the United States is unfortunately in the process of leaving the Paris Agreement, many states, cities, companies and citizens are taking actions to fight climate change, ensuring the United States remains a global leader in reducing carbon emissions and delivers on the country’s ambitious climate goals under the Paris Agreement.
The local sub-forums, held in the afternoon, were the main focus of the conference. They focused on the progress and challenges in implementing a coal cap in Shandong Province, Shanxi Province, and the Central and Fenwei Plains region. Participants discussed implementation of the main policies and measures to achieve the 13th Five-Year Plan targets, as well as practical and effective solutions.
Shandong Province is China’s largest coal consumer. In 2018, coal consumption reached 423 million tons, accounting for 74.5% of the province’s total primary energy consumption. Coal consumption in seven high-energy-consuming industries such as electricity, steel, coal chemicals, and nonferrous metals accounts for about 80% of the province’s total industrial coal consumption. Although during the 13th Five-Year Plan period Shandong Province’s total coal consumption showed a general downward trend, coal consumption rebounded in 2018, with an increase of 0.75% compared to 2017. In addition, in 2018 the Central Environmental Protection Inspector found that some enterprises under-reported their coal consumption data, bringing severe challenges for the coal cap project in Shandong. In July 2019, Shandong Province issued the “Guiding Opinions of the General Office of the People’s Government of Shandong Province on Controlling Coal Consumption and Promoting Clean and Efficient Use”, stating the plan to reduce coal consumption by 50 million tons in 5 years. Xu Chongqing, Director of the Ecology Institute of the Shandong Academy of Sciences, pointed out that in the future Shandong Province should exert both supply side and demand side pressure to achieve a coal consumption cap and promote an energy transition in Shandong Province. On the supply side, Shandong should improve the quality of coal, implement efficient use, make use of waste heat and residual pressure, and continually expand the scale of renewable energy development and utilization. On the demand side, Shandong should first focus on attaining accurate statistics on coal consumption by establishing a platform for energy data. Shandong should also promote high-quality development within various industries, control the scale of high-energy-consuming industries, and strengthen end-use energy conservation.
Shanxi Province is the first comprehensive energy transition reform pilot in China. In 2017, the total coal consumption in Shanxi Province was 320 million tons, and coal’s proportion in primary energy consumption was 84.6%, 24.2% higher than the national level. Electricity, coking, and steel are the largest consumers in Shanxi, accounting for about 75% of the total. The emphasis on coal in Shanxi has led to environmental pollution and degradation in the region. Since the launch of the Air Pollution Prevention and Control Action Plan in 2013, the air quality in Shanxi has improved significantly, but the situation is still serious. In 2018, the proportion of good and moderate air quality days in Shanxi was only 59%, which was 20% below the national average. In the first three quarters of 2019, three cities in Shanxi Province, Linfen, Jincheng, and Taiyuan, ranked in the bottom 20 for air quality nationwide. In the future, coal cap work in Shanxi should be based on the relevant provincial government documents. Shanxi should adopt innovative coal cap measures such as controlling the scale of new coal power, improve the efficiency of power utilization, eliminating backward production capacity, and promoting clean energy substitution, and should implement an ecological compensation mechanism so as to achieve the coal cap targets in the 13th Five-Year Plan. Yuan Jin, Professor at the School of Environmental Science and Engineering at the Taiyuan University of Technology pointed out that Shanxi, as a major center of coal production and consumption, has serious air pollution and ecological damage. Shanxi must overcome its ideological inertia and resistance and should actively promote the pilot project’s development of energy reform, optimizing the energy consumption structure, and improving energy efficiency. The implementation of a coal cap would support growth in emerging industries and the non-coal-based economy in Shanxi, helping the province to move past coal dependence and become a leader of the energy revolution.
In the Fenwei Plains, coal accounts for nearly 90% of primary energy consumption, and it is one of the most polluted regions in the country. In air quality rankings of 169 key cities across China, five cities in the Fenwei Plains ranked in the bottom 20 for five consecutive months. It is urgent that key provinces and cities, such as Henan and Xi’an, actively promote a cap on total coal consumption in the region and support optimizing the energy structure, accelerating industrial reform, and stimulating new regional economic drivers.
Henan Province’s coal consumption in 2018 was about 220 million tons, about 8% lower than in 2015. The share of coal in primary energy consumption dropped from 76.5% in 2015 to 71.5% in 2018 and the average PM2.5 concentration level fell from 80 micrograms per cubic meter in 2015 to 61 micrograms per cubic meter in 2018. However, overall air quality is still not high, and pollution remains severe in some areas. In order to speed up the structural adjustment of the energy sector, support green development, and solve the pollution problem at its source, Henan has set a stricter coal cap target than the national coal cap target. The Henan Province Coal Consumption Reduction Action Plan (2018-2020) raised the coal cap target from 10% of coal consumption during the 13th Five-Year Plan period to 15%. However, as a province with a large population, a significant agriculture sector, and a large amount of industry, Henan is in a stage of accelerating industrialization and urbanization. It faces the dual task of high-quality development while simultaneously protecting the environment. The coal cap situation is grim, and the pressure is significant. Qian Fajun, Director of the Henan Academy of Science’s Institute of Geographical Sciences, pointed out that in the future Henan Province should continue to prioritize improving air quality, take measures to improve the utilization efficiency of coal power, expand the scale of imported power into Henan, and actively withdraw coking, chemical and smelting production capacity. These measures would help Henan to achieve the government’s coal cap target of reducing coal consumption by 15% during the 13th Five-Year Plan period.
As of August 2019, industrial coal consumption in Xi’an (including Xixian New District) by enterprises above a designated size was 7.3176 million tons, down 13.1% year-on-year. In the first three quarters of 2019, the average concentration of PM2.5 in Xi’an was 52 micrograms per cubic meter, down 1.9% year-on-year, making Xi’an the only city to make the top 20 list for national air quality improvement in the whole of last year and the first three quarters of this year. Xie Honghao, President of the Xi’an Energy Conservation Association, pointed out that, considering that 30% of the pollution in Xi’an and the surrounding areas comes from outside, and the pollution is mainly concentrated in coking, coal chemicals, and other fields, the most important step forward to reduce pollution is to address industrial and energy structure problems. A joint regional defense will be the most direct and effective measure. In the future, in addition to meeting local coal cap requirements, Xi’an should also be encouraged to play a leading role in the joint prevention and control mechanisms for the Fenwei Plains region. This includes: promoting industrial and energy structural adjustment for cities in the trans-provincial region, promoting inter-provincial cooperation and exchange between the cities of the Fenwei Plains, establishing a working mechanism for air quality prediction data sharing, developing a rapid and working mechanism for emergency response in the case of heavy pollution, promoting simultaneous pollution control, and achieving simultaneous control of both point source pollution and regional pollution.
Demonstration cities for the China Coal Cap Project, such as Wuhan and Zibo, continue to strengthen total coal consumption cap efforts. Wuhan implemented measures to reduce the production capacity of key coal-consuming enterprises, including shutting down high-consumption facilities, expanding areas with a ban on burning coal, comprehensively reducing dispersed coal, eliminating small industrial coal-fired boilers, and replacing coal with clean energy where possible. From 2016-2018, coal reduction reached 6.38 million tons, with a three-year reduction accounting for about 20% of the total coal consumption in 2016. Zibo has promoted the transformation and upgrading of its industry, promoting the replacement of coal with gas in rural areas, comprehensively reducing dispersed coal, improving the efficiency of coal-fired boilers, and a series of other policy measures. In 2018, coal consumption reached 28.56 million tons, 10% lower than that of 2015 and 1.03 million tons lower than the 2020 target of 29.59 million tons. The city’s coal cap target set by Shandong Province was met ahead of schedule.
Yang Fuqiang, China Coal Cap Project Steering Committee member and Senior Advisor at the Natural Resources Defense Council (NRDC), pointed out that the China Coal Cap Project has put forward a number of practical policy recommendations in recent years to curb rebounding coal consumption. The China Coal Cap Project expects coal consumption to hold steady in 2019 and strives to reduce coal consumption by over 1% year-on-year in 2020. In order to achieve the goals set forth in the 13th Five-Year Plan, we must take effective bottom-up measures, continue adjusting our priorities, and deepen local coal cap work in 2019 and 2020. Shandong, Shanxi, Henan, and the Fenwei Plains are all regions with significant coal production and consumption and serious air pollution. These regions should promote the implementation of coal cap policies, benchmark best practices in the world and should establish long-term, effective governance mechanisms and solutions based on the combination of market forces and government guidance targets. They should also continue to promote the governance of both key coal-consuming industries and of dispersed coal. These measures will support local level energy, economic, and social transitions, accomplishing the goals of the 13th Five-Year Plan.