China to Increase Funding for Coal Emissions Reduction Projects

China’s National Energy Administration and the National Development and Reform Commission (NDRC) have announced a plan to increase financing for emissions reduction projects at coal-fired power plants.

Construction will start next year on some of the projects, which will include green ammonia and the burning of biomass, with a goal of reducing emissions by 20 percent for each unit of power generated, according to a press release by the organizations, as Bloomberg reported.

The country also plans to use carbon capture and storage to lower emissions, reported Reuters.

The emissions reductions from the upgrades should be 50 percent by 2027, compared with 2023 levels.

The top energy consumer in the world, China continues to use highly polluting coal as its main energy source, despite the government’s efforts to develop and encourage renewable energy projects.

“Biomass power plants in China are not financially viable without subsidies, largely due to inadequate fuel supply,” said Shen Xinyi, Centre for Research on Energy and Clean Air analyst, as Reuters reported. “I’m not certain it’s wise to burn green ammonia in coal power plants (given the costs), especially when there is still potential to increase the use of renewable power, such as by enhancing inter-province power trade and improving the flexibility of coal power plants.”

In June, coal production in China reached a six-month high, according to National Bureau of Statistics (NBS) data, as Reuters reported earlier this week. The country mined more than 400 million metric tons of coal last month, up 3.6 percent on the year.

The government’s goal is for emissions from coal plants to be comparable with electricity generated by natural gas by 2027, reported ESG News.

“Cutting the carbon intensity of coal plants by 50% will bring them close to the emission levels of gas-fired power plants,” said the NDRC, as ESG News reported.

China plans to use renewable mega-projects, especially in remote desert areas, but these projects can have low usage rates because the areas lack long-distance power transmission networks. There is the potential for localized demand for green ammonia’s surplus renewable energy, combined with the coal sector’s decarbonization efforts.

Funding for the lower-carbon projects highlights China’s attempts to achieve ambitious climate goals while still relying on the world’s most polluting fossil fuel, reported Bloomberg. While coal use is falling in the country, government officials have stated that the dirty fuel will still be necessary to balance new inexpensive, intermittent solar and wind to maintain energy security.