New Delhi, Sep 29 (IANS): China's pledge to end overseas coal financing will impact 44 coal plants totalling 42,220 megawatts (MW) of capacity, according to Global Energy Monitor's (GEM) updated Global Coal Public Finance Tracker.
This will lead to cumulative lifetime savings of $130 billion and reduce yearly global coal demand growth by 30 million tonnes, adding up to 1,100 million tonnes over the lifetime of the plants.
GEM's newly updated coal public financing map depicts what is now at stake for the future of proposed coal plants outside of China as Beijing deliberates the precise terms of its pledge to stop building new coal plants abroad.
The pledge was made by Chinese President Xi Jinping at the United Nations General Assembly last Tuesday. The news was followed by an announcement from the Bank of China on Friday that it would no longer provide financing for new coal plants and coal mining projects outside China starting October 1.
Based on a September 2021 survey by GEM, 44 coal plants totalling 42,220 MW of capacity are currently under consideration for public financing from state-owned Chinese institutions, and could therefore be affected by China's announcement. The proposals are spread across 20 countries in Asia, Africa, South America, and eastern Europe.
If China's announcement excludes any future public financing, all 44 coal plants are at risk of being cancelled, given the lack of other financing options for new coal plants. Japan and South Korea pledged to stop public lending for overseas coal power earlier this year.
Five of the projects are being considered for funding from the Bank of China, and are therefore at risk of having their financing from the bank cancelled as soon as next week.
The 44 coal plants represent over 40 per cent of the 103,000 MW pipeline for new coal plants in the 20 countries. If the coal plants are cancelled, it would result in savings of over $130 billion -- $50 billion in construction costs and over $80 billion in fuel and operational costs over the lifetime of the plants.
In Africa, cancellation of the plants would cut the amount of proposed coal power by half, as China has been a major financial supporter of new coal plants in the continent.
Cancellation of the projects would also completely eliminate the pipeline for new coal plants in Kenya, Madagascar, and the Ivory Coast. The reduction would make the three countries eligible for entry into the recent "No New Coal" alliance, a UN pledge for countries to stop building new coal plants.
The biggest effects would be in Bangladesh and Mongolia, as the amount of proposed coal plants in each country would decrease by over 90 per cent, making them nearly eligible for the "No New Coal" pledge.
China's announcement will also have a major impact on the global coal market, as many of the 20 countries import the majority of their coal. Together the 20 countries were home to over 10 per cent of thermal coal imports in 2019, totalling 130 million tonnes.
"China's announcement is the death knell for overseas public financing for coal, and many proposed coal plants will be cancelled, given the lack of alternative financing options," said Christine Shearer, GEM's Coal Program Director.