Exporting Coal to China: The Good News and the Bad - Global Trade Magazine
  May 30th, 2017 | Written by

Exporting Coal to China: The Good News and the Bad

Sharelines

  • China's power industries are going green.
  • China's coal consumption is dropping.
  • Because China does not have access to cheap natural gas, more efficient coal generation has to be part of its equation.

Coal consumption in the United States is driven by the power generation industry, and the move away form coal to natural gas has driven companies to bankruptcy and workers to the unemployment lines. It has also left huge deposits of the mineral in the ground.

Some US coal operators have pinned their hopes in recent years on exporting, especially to China, on the theory that that huge and fast-growing economy could absorb large amounts of their product and that China was less concerned about the environmental impacts of burning coal. But a new report from the Center for American Progress has good news and bad news for those who would profit from coal exports to China.

The good news is that, yes, China, still is burning a lot of coal, but it is also introducing technology that allow the mineral to burn cleaner, a lot cleaner than US coal-burning plants. But China’s power industries are also going green, aggressively moving toward the use of renewables. It’s not going to happen overnight, but the handwriting is already on the wall: China’s coal consumption is dropping.

“We found that the nation’s coal sector is undergoing a massive transformation that extends from the mines to the power plants,” said the CAP report. “China is indeed going green. The nation is on track to overdeliver on the emissions reduction commitments it put forward under the Paris climate agreement, and making coal cleaner is an integral part of the process.”

China’s energy economy is massive ship and cannot convert to clean energy all that quickly. But, the report found, “the shift toward renewables is happening: China’s Paris commitment includes a promise to install 800 gigawatts to 1,000 gigawatts of new renewable capacity by 2030, an amount equivalent to the capacity of the entire U.S. electricity system.”

Even so, with 1.3 billion people and massive electricity needs, that impressive achievement is not enough to replace coal in the near to medium term. “To bridge the gap, China is rolling out new technologies to drastically reduce local air pollution and climate emissions from the nation’s remaining coal plants,” the report said.

Among other report findings, China’s emissions standards for coal-fired power plants are stricter than the US. “Demand for coal-fired power is falling so quickly in China that the nation cannot support its existing fleet,” the report noted. “Many of the coal-fired power plants that skeptics point to as evidence against a Chinese energy transformation are actually white elephants that Chinese leaders are already targeting in a wave of forced plant closures.”

Energy solutions that work well for the United States aren’t appropriate for China. The US has access to cheap and plentiful natural gas, and China does not. “If China is going to reduce emissions substantially,” the report concluded, “more efficient coal generation has to be part of its equation, at least for the near to medium term.”

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