Experts Weigh In on the Future of Coal Use in China

Coal will remain a critical part of China’s energy mix for decades to come, but growth will slow and then peak at perhaps 3.4 billion tons per year by 2020, Jiang Kejun of China’s Energy Research Institute told a group assembled for the WRI-US CAN-organized briefing on China and coal during the Tianjin climate negotiations on Monday.

Jiang said that reducing carbon emissions is a major goal of China’s energy planning, and that his group at ERI is focused on specific policies to implement its “low carbon scenario,” with its 2030 emissions peak, and on a potential new scenario with an even earlier peak of 2025. Jiang urged his audience to consider the importance of the specific measures China is likely to adopt under its 12th Five Year Plan, which will be launch in March 2011, rather than solely focus on the 40-45% carbon intensity target. Jiang and his group have been working with the coal industry to help them understand how to adapt to a lower carbon future.

By 2050 Jiang said he still expected China to be using about 2 billion tons of coal a year. Thus, he said substituting non-carbon fuel sources is important, but it is equally important to continue working on energy efficiency and on carbon capture and storage (CCS). His group suggests that in the long run the cost of CCS will be quite manageable. His group’s cost estimates of the added cost go down considerably over time, and this will be during a period where Chinese family incomes are expected to increase 8-fold by 2050. (View Jiang Kejun’s presentation here)

To help move along the cost curve and integrate CCS into the Chinese energy economy, Ming Sung from the Clean Air Task Force spoke about the business-to-business collaborations that his group has promoted, and the importance of beginning a CCS program with CCUS – carbon capture, use and storage. Sung pointed out the US has considerable experience with enhanced oil recovery, currently the most widespread form of CCUS, over the last 30 years, and the Chinese market offers a lot of opportunities to innovate lower-cost approaches to CCS and CCUS. Collaboration will enable more rapid progress at lower cost and he outlined a number of business partnerships, as well as government-to-government and those involving NGOs and research institutions. This area is particularly rich in multi-stakeholder efforts including the new US-China Clean Energy Research Centers. (View Ming Sung’s presentation here)

Energy efficiency has been the major way to make China’s coal go further. China is already building fewer new coal-fired power plants than it was a few years ago. Jiang Kejun said he expects from this year on, it will add no more than 30 GW of new coal-fired plants a year, less than a third of China’s peak 3-4 years ago. Barbara Finamore of the Natural Resources Defense Council emphasized the importance of energy efficiency in buildings for ensuring China’s future progress in controlling energy use. She noted that as China becomes a more developed country, buildings will use an ever-larger share of total energy and that there are many opportunities to reduce the amount of energy they use. China already has a national-level building rating system, which the United States does not have. Chinahas established required building energy standards, rather than the voluntary systems used in much of the US. These systems all need strengthening, and Finamore emphasized the importance of engagement and sharing of best practices and recommendations as China focuses increasingly on this sector. (View Barbara Finamore’s presentation here)

I then turned to industrial energy efficiency. Industry uses the largest share of energy in China today. While that share will decline over time, it clearly made sense for China to focus on industry in the 11th Five Year Plan (2006-2011) and to continue to engage actively in reducing the energy intensity of Chinese industry. During these past five years, two specific programs have achieved the largest savings: the 1000 Enterprise Program and the Small Plant Closure Program. These two programs have essentially captured the lowest-hanging fruit – both closing the more egregiously inefficient facilities and establishing much better management in the largest facilities. Now China will be facing a much more varied challenge – working with mid-sized companies, improving buildings and making transportation more efficient, to meet its new carbon intensity goal. (View Deborah Seligsohn’s presentation here)

China has said it will incorporate the 40-45% carbon intensity target in its 12th Five Year Plan, to begin in March 2011. Jiang Kejun was also asked about other measures. He emphasized that the most important elements will be the specific requirements put on sectors or sub-national governments. He also said there is active discussion of adopting an environmental tax in 2013, but it is not yet clear whether a carbon tax will be part of this larger environmental tax policy as his group has urged.

The challenges China faces are magnified by its size, but we concluded the briefing with some comparison to other countries. China’s absolute carbon emissions are now the highest in the world, but its per capita emissions are lower than the US, Europe or Japan. Coal is clearly an important sector in China, but China is not the most coal-dependent country – both Australia and South Africa use a greater percentage of coal in their power sectors, and a number of other countries, including the United States and India, use quite high proportions. While this means China is not alone in the challenges it faces, it also means that the lessons it learns will have wider applicability and can be usefully shared.

Photo by Kim S. courtesy of a Attribution-ShareAlike 2.0 license.