New Charts Show The Downward Spiral Of Chinese Coal Use

A worker sweeps near a billboard display showing a scene of Central Business District and a message encourage people on environment protection, as capital city skylines are shrouded with pollutant haze in Beijing, China, Monday, Nov. 9, 2015. CREDIT: AP PHOTO/ANDY WONG
A worker sweeps near a billboard display showing a scene of Central Business District and a message encourage people on environment protection, as capital city skylines are shrouded with pollutant haze in Beijing, China, Monday, Nov. 9, 2015. CREDIT: AP PHOTO/ANDY WONG

It appears increasingly likely China has peaked in coal. “Chinese coal consumption enters downward spiral,” is a key conclusion of a major new analysis of Beijing’s energy and climate policies from the Center for American Progress (CAP).

You can see the sharp reversal after years of rapid growth from this chart:

Coal use in China declined in 2014, the first drop this century. And another new study, from the Institute for Energy Economics and Financial Analysis (IEEFA), reports more than a 5 percent year-on-year decline in coal use as of September.

The IEEFA study concludes, “China’s coal production and consumption looks to have peaked in 2013.” It’s now a widely-held view in the Beijing climate community that China will peak its carbon dioxide emissions by 2025.


Yes, the New York Times reported last month about China’s “underreported” coal consumption. But as Climate Progress explained at the time, this isn’t news to energy experts and climate negotiators. One leading expert who had reported on all this back in February told Climate Progress, “The information in relation to this particular issue has already been known for at least a year and a half.”

What’s news is that a combination of new policies from Beijing has reversed a quarter-century of coal-based industrial growth driven by concerns over both urban air pollution and climate change. What’s news is China’s policies are driving an explosion in carbon-free power:

Back in November 2014, Chinese President Xi Jinping joined President Obama in a joint announcement, which stated, “China intends to achieve the peaking of CO2 emissions around 2030 and to make best efforts to peak early.” This was the first time a major developing nation — in this case, the largest and fastest-growing carbon-emitter in the world — agreed to sharply change the trajectory of its carbon emissions and fossil fuel consumption.

This joint announcement was crucial in kick-starting the climate pledges made by more than 100 countries in the months leading up to the current Paris climate talks. Also, China experts I spoke to believe that the country would not have agreed to the phrase “to make best efforts to peak early,” if their leaders did not believe that they could and would do so.

The Chinese had already started to work toward a CO2 peak, with energy price reforms, strong fuel economy standards, and an aggressive effort to deploy clean energy technologies, which had made them world leaders in both manufacturing and utilizing solar power and wind power. One week after the joint announcement, the Chinese government announced it would cap coal use by 2020. It now looks like they will beat that target by seven years!


Contrary to the claim by some that China’s pledge doesn’t require the country to take action to cut carbon pollution for 15 years, China is now adopting a broad spectrum of policies to slash coal use — including a cap-and-trade system that will put a price on carbon. A key motivation for China, beyond simply its interest in slowing climate change, is that its urban air pollution levels are among the highest in the world. This gives the country a major public health and domestic political motivation to slash coal use.

“In 2014, Beijing shut down more than 1,000 coal mines,” my colleague Melanie Hart, Director of China Policy at CAP, explains in her new report. Regionally “Beijing is rolling out fast-track provincial- and municipal-level coal-control and emission-reduction policies that are putting some Chinese provinces and cities on a path to peak emissions as early as 2020 or 2022.” Regions covered by these policies “account for over 66 percent of the nation’s gross domestic product, or GDP.”

Here is a map of China’s fast-track emission reduction zones (click here for a larger version):

I visited China at the end of June 2015 with Hart to meet with top governmental and non-governmental experts on clean energy and climate. That visit made clear to me that the country’s leaders are serious about reversing their energy policy and cleaning up their polluted air.

“In sector after sector, Beijing is working to downshift old growth engines and kick-start new ones,” Hart explains in her new report. “Many of the contracting industries — cement, steel, and iron — are some of China’s biggest coal consumers. As those industries contract, coal demand dries up and the coal sector shrinks as a result. Beijing is also intentionally ratcheting up coal prices to make those energy-intensive sectors less competitive, as well as to make coal less competitive vis-à-vis renewables.”

Significantly, China is still bringing online new coal capacity. Hart notes, “In 2014, China took hundreds of existing coal plants offline but also added around 39 gigawatts of new coal capacity.” Some of this is new, more efficient plants replacing older, less efficiency capacity. “Some local officials are overbuilding simply because they have the capital to do so, and that is creating a massive capacity bubble in China, driving down plant-utilization rates, as well as the generation of profits nationwide,” explains Hart. “The average utilization rate for China’s thermal-power generations was 54 percent in 2014 — the lowest rate since China first began its reform and opening process in the late 1970s.”


A November report from Greenpeace came to a similar conclusion: “Capacity utilization of the plants has been plummeting. China is now adding one idle coal-fired power plant per week.”

The utilization rate will continue to drop as China puts in place the commitments it announced when Chinese President Xi Jinping visited the United States in September. Besides embracing a cap-and-trade system, which will put further downward pressure on coal, China announced it will use what is called “green dispatch” system for its electric grid.

Green dispatch means China will use all of its low- or zero-carbon sources like renewable energy before the dirtier sources like coal. Previously China had been forcing wind plants “to shut down at times to let coal power plants meet their generation quotas,” as the American Wind Energy Association has explained. As a result, some “17 percent of potential wind generation was lost due to curtailment in 2012, and this policy change should significantly reduce that figure going forward.”

In its November 2014 announcement, China committed to “increase the share of non-fossil fuels in primary energy consumption to around 20 percent by 2030.” That clean energy pledge “will require China to deploy an additional 800–1,000 gigawatts of nuclear, wind, solar, and other zero emission generation capacity by 2030,” as the White House explained at the time. And that is “more than all the coal-fired power plants that exist in China today and close to total current electricity generation capacity in the United States.”

China’s deployment rate of new renewables is already high, as this chart shows:

The Chinese are currently beating their climate and clean energy targets across the board. And that’s why it’s all but certain coal will continue its downward spiral, and renewable generation will continue to soar.