Chinese financial institutions provided at least $1 billion in “green” financing to coal-related projects in the first half of this year, a review of financial data showed, with fossil fuels still playing a major role in Beijing’s energy strategy.
According to Shanghai-based financial data provider Wind, 7.4 billion yuan ($1.1 billion) in green corporate and financial bonds were issued by 13 coal projects in the first half of the year. They involved power plants fueled by coal or coalbed methane as well as coal-to-chemical projects.
Cutting coal and encouraging cleaner forms of energy is a major part of China’s efforts to reduce smog and greenhouse gases. The share of coal in the country’s total energy mix fell to 59% last year, down from 68.5% in 2012, and it aims to cut that share to around 50% by 2030.
But overall capacity is still set to grow even as it falls as a share of the total, and China also needs to upgrade existing mines and plants. Thus, while many global financial institutions have said they will no longer fund coal projects, their Chinese counterparts have not followed suit.
Last year, more than a quarter of the green bonds issued in China failed to meet international criteria, according to the Climate Bonds Initiative (CBI), a non-profit group that promotes global green bond standards.
Chinese regulators were planning earlier this year to devise new standards to prevent coal projects from issuing green bonds to bring the nation more in line with global norms.
But the move has been opposed by state planning agency, the National Development and Reform Commission, with funding still needed for ultra-low emissions technology and to develop cleaner coal revenue streams such as coal chemicals and coalbed methane.
“Coal is obviously never green,” said Liu Junyan, senior climate and energy campaigner with Greenpeace East Asia.
“The alleged purpose for ‘clean coal tech’ is to address the environment risk posed by the coal industry, but for some of these methods, the ‘clean coal’ risk is even greater than the original problem,” she said.
China Energy News, a publication run by the Communist Party-owned paper the People’s Daily, reported this year that more than 80% of a central government renewable energy fund was used to fund fossil fuels like coalbed methane and shale gas in 2018.
China also approved 141 million tonnes of new annual coal mining capacity in the first half of this year, compared to 25 million tonnes for the whole of 2018.
More coal-fueled power stations are also expected to be built, with an industry lobby group predicting total coal-fired capacity to peak at 1,300 gigawatts, meaning another 290 GW could go into operation.
Reporting by David Stanway; Editing by Tom Hogue