China’s power and steel firms continue coal investment drive

New steel and coal projects announced in China in the first half of this year will emit an estimated 150mn tonnes of CO2 annually, according to new mapping of the project pipeline by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM).

This is a figure roughly equal to the annual emissions of the Netherlands.

China’s state-owned power and steel firms have announced a total of 18 new blast furnaces and 43 coal-fired power plants in 2021, despite government promises to achieve carbon neutrality by 2060.

Power generation and steelmaking are the two largest emitting sectors in China. They have also been the primary drivers of the steep increase in China’s emissions since the end of COVID-19 lockdowns in early 2020. Thermal power generation has increased by 15%

and steel output has increased by 14% in the first half of 2021, compared with pre-pandemic levels.

However, in recent months the CREA and GEM analysis says that carbon emissions have become something of a priority in Beijing, with figures showing slowing CO2 emissions growth in the second quarter of 2021. ‘Still, announcements of new coal-based capacity continued,

showing the continued struggle between construction-fuelled economic growth and decarbonisation,’ reads the joint briefing.

Zero emission power generation covered only 30% of the increase in China’s power demand from the first half of 2019 to the first half of 2021. This means that investment in renewables and nuclear must triple just to cover the increase in electricity demand at current rates of growth. GEM and CREA note that ‘there is no clear increasing trend in the share of power demand growth covered by zero-emissions sources.’