China Announces it will Stop Financing Coal-Fired Projects Abroad

China Announces it will Stop Financing Coal-Fired Projects Abroad

China has decided that it will no longer finance or construct coal-fired power facilities in other countries. President Xi Jinping made the words during his address to the United Nations General Assembly, and many consider them to be the beginning of the end for coal power.

This move would put an end to the world’s largest source of funding and support for new coal-powered projects. China has been supporting big projects in Vietnam and Indonesia through its Belt and Road initiatives. Many countries, including several developing countries, are covered by this fund, which includes railroads, coal plants, highways, and ports.

However, it did not support any coal projects in the first half of this year. “China will increase its support for other developing nations in developing green and low-carbon energy,” President Xi said in a pre-recorded remark broadcast to the United Nations General Assembly in New York. Such a promise has been hailed as a sign of the political will required to completely phase out coal. This could become a reality when the United Nations Climate Change Conference (COP26) in 2021 begins next month.

“The future of coal power is clearly written on the wall. I applaud President Xi’s pledge to halt the construction of new coal projects abroad, which was a major topic of discussion during my visit to China. We must put coal in the past at #COP26 “Alok Sharma, the President of COP26, remarked on Twitter.

UN Secretary-General António Guterres lauded China’s commitment, saying that “accelerating the global phase-out of coal is the single most critical measure to keep the 1.5°C targets of the Paris Agreement within reach.” 

“This is a global emergency,” Guterres said in his speech. “We are on the verge of a catastrophe – and we are heading in the wrong direction.” There has never been a time when our planet has been more endangered or divided.”

President Xi did not provide a date for the decommissioning of coal-fired power plants. China has more than 300 coal plants under construction around the world as of 2019. Since the Paris Agreement was signed in 2015, it has scrapped almost 75% of its coal projects.

China, on the other hand, consumes half of the world’s coal and plans to build three times as much coal capacity as the rest of the world combined by 2020 – the equivalent of more than one major power plant per week. It also gets roughly 70% of its electricity from coal, so if it wants to make significant improvements, it must address both domestic and international infrastructure.