BEIJING HAS VOWED to cut coal use to reduce air pollution. Plans to shift China's energy consumption away from coal are a direct response to public and international concern over health and environmental risks of the nation's air quality. The statement comes amidst Beijing's recent selection to host the 2022 Winter Olympics, during a time at which the nation faces extreme pressure from countries across the world to normalize its pollution levels for public safety and to curb global warming.
Earlier this year, coal utilization rates in China dropped to a low of 52% and are expected to fall even more. In 2013, using models demonstrating China's increasingly heavy dependence on coal for fuel in addition to the government's attitude that placed industrial growth ahead of environmental concerns, analysts predicted a steady incline of coal consumption in China by 2020, yet drops in 2014 and 2015 have proven otherwise. "The demand situation in China has deteriorated over the last few months much faster than we had expected," stated Georgi Slavov of commodity brokerage firm Marex Spectron. According to a statement made by environmental non-profit group Greenpeace, if this trend continues until the end of the year, it will be the largest recorded year-on-year reduction in coal use and in CO2 emissions in any country.
Despite recent drops, China still relies on coal production and import for nearly 2/3 of its overall annual energy consumption. China's dependence on coal has made it the number one producer of carbon dioxide, responsible for one quarter of the world's CO2 emissions. Since January this year, under various legislation such as China's Environmental Pollution Law (EPL) and its recent win in hosting the 2022 Winter Olympics, statistics indicate that China has begun to divest from coal and move towards alternative power sources, including hydro-electric, nuclear, and renewable options, such as wind. By the Winter Olympics in 2022, China is expected to produce more than double the wind power of the United States. The China Electricity Council predicts further declines in utilization rates at China's thermal power plants fueled by coal, natural gas, and oil, as Beijing aims to increase its dependence on non-fossil fuels from this year's current rate of 11.2% to 15% by 2020.
China's movement away from coal does have a darker side, mostly seen in its northern provinces like Shanxi, where coal mining and production acts as the backbone of the local economy. Shanxi coal accounts for almost half of China's total inventory, but its coal industry lost US$644 million in the first half of 2015 and has suffered losses for 12 consecutive months. Shanxi's coal industry employs millions of workers who have already suffered significant cuts in wages and face job loss. In accordance with national standards, the Shanxi provincial government will impose a 5-year restriction on new coal mines, thus limiting job growth even more. “The coal industry is not doing well. They’re cutting jobs now. It’s very hard to find employment with any coal company,” says Wanghao from the Institute of Mining Engineering. Most experts are skeptical of the future of Shanxi's economy. "It will be difficult to reverse the situation in the coal market," deputy head of Shanxi Academy of Social Sciences said in an interview with Xinhua news, "on one hand, the economic slowdown will cap demand for coal. On the other hand, the country has increased efforts to save energy and reduce emissions [which] will also reduce demand for coal."
But there is still hope that limitations in previous methods of coal production can actually benefit provinces like Shanxi. In a meeting on August 2, the Shanxi government agreed to partner with Tsinghua University to establish a research centre that will work to remodel Shanxi's failing coal industry. The centre aims to promote research and development into clean coal and other low-carbon energy resources, as well as provide technology consulting services. Shanxi's party chief Wang Rulin says the center will "set a good example for other places in terms of clean coal usage."