China’s aim to scale back carbon emissions appears troublesome to attain as banks proceed to throw money into coal mines and energy crops, undermining Xi Jinping’s plan to chop fossil fuels
From the South China Morning Post
China put 38.4 gigawatts (GW) of coal-fired power plants into operation in 2020, three times the 11.9 GW that the rest of the world set on fire, 60 of the world’s largest banks, which issued $ 752 billion in debt or equity issues last year . Have lent or subscribed to the fossil fuel industry
Eric Ng
Published: 10:00 a.m., April 3, 2021
On an unusually warm autumn day last October, the world’s largest coal-fired power plant went into operation in the eastern Chinese provincial city of Anhui.
The second phase of the Shenergy Group’s Pingshan power plant is located in an economic zone made up of green rice fields and has a generation capacity of 1,350 megawatts, which is sufficient to meet the annual needs of 1.1 million households. Almost four years after receiving the building permit, the system was officially connected to the national power grid in mid-December. The plant is equipped with state-of-the-art technology that only requires 251 grams of coal – a global efficiency record. Each unit of electricity generated has been hailed as a “national demonstration project” by local authorities and the media. Twelve weeks after President Xi Jinping’s surprising promise at the United Nations General Assembly that China should become climate neutral by 2060, it is also awkwardly reminded that the world’s second largest economy must draw a fine line between its environmental commitments and its development needs .
The Chinese government and the country’s state power producers have set aggressive targets for renewable energy, but plans to shut down or get back on track – they produce a third of China’s carbon emissions – have not kept up. China put 38.4 gigawatts (GW) of coal-fired power plants on stream in 2020, three times the number of 11 fueled by the rest of the world, according to a February report by the Global Energy Monitor in San Francisco and the Center for Energy and Clean Air Research , 9 GW (CREA) in Helsinki.
After taking downtime into account, China’s net growth last year was 29.8 GW, compared to the global net reduction of 17.2 GW. The pace of building permits has tripled to 36.9 GW in the last year alone, five times more than outside of China, the report said.
“That put the central government’s emphasis on new climate engagement in a bad light,” said Zhang Kai, climate and energy project manager for Greenpeace East Asia in Beijing.
SCMP Graphics Ahead of the April 22nd Earth Day Summit of Politicians’ Leaders on April 22, researchers doubt China can meet Xi’s pledge that carbon dioxide emissions will peak before 2030, while non-fossil fuels rose from 20.3 percent in 2020 to 20 percent by 2030. Xi doubled this commitment and increased the contribution target for wind and solar energy to 25 percent of total energy generation or 1,200 GW. by 2030.
“If the central government allows the continued level of development of coal-fired power plants, it will at best divert vital resources away from its clean energy transition and, at worst, make China’s climate-neutral goals difficult, if not impossible,” said the Global Energy Monitor-CREA report.
China’s coal mines and coal-fired power plants are still growing, funded by an endless stream of cheap finance from the country’s state banks as they keep one of the country’s largest industrial sectors buzzing in an economic slowdown. Millions of jobs and trillions of yuan in assets are at stake in the coal industry.
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The country’s five major state-owned utility companies that generate more than half of China’s coal power – State Energy Investment Group, China Huaneng Group, China Datang Group, China Huadian Group, and State Power Investment Group – employ 2 million people and have 5.5 trillion yuan ($ 836 billion) in assets between them.
Up to 60 of the world’s largest banks lent or subscribed to $ 752 billion in debt or equity issues to the fossil fuel industry last year. This is a 9 percent decrease from 2019, but 6 percent more than in 2016 when the Paris Agreement came into force, according to a March 24 study by six non-governmental organizations (NGOs), including the Rainforest Action Network and BankTrack.
“The general trend in fossil fuel financing over the past five years is still definitely going in the wrong direction, adding to the need for banks to develop strategies to prevent the decline in fossil fuel financing in 2020,” the coalition said.
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American and Canadian banks led nearly half of the world’s fossil fuel financing deals worth $ 3.8 trillion in the past five years. European, UK, Chinese and Japanese financial institutions pale in comparison, but their funding volumes increased over the period. Chinese funding rose by a third to nearly $ 160 billion, according to the data.
While US banks are among the largest oil and gas financiers, Chinese financial institutions are leaders in financing coal mines and coal-fired power plants. This was confirmed by results of a separate investigation from 29 NGOs, including Urgewald and Reclaim Finance, which tracked loans from 380 banks and stock and bond issues subscribed by 427 financial institutions that helped maintain 934 coal mines and power producers.
Japanese banks are the top lenders, while Chinese financial institutions are the largest stock and bond insurers for coal companies, according to the NGOs.
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