China coal mine approvals surge despite climate pledges

Long-term cuts in coal consumption are a key part of China’s energy, environment and climate goals. (Shutterstock)
Updated 06 August 2019

China coal mine approvals surge despite climate pledges

  • China approves 141 million tons of new capacity in H1 government documents
  • China energy targets allow up to 300 GW of new coal power

BEIJING: Approvals for new coal mine construction in China have surged in 2019, government documents showed, with Beijing expecting consumption of the commodity to rise in the coming years even as it steps up its fight against smog and greenhouse gas emissions.

Long-term cuts in coal consumption are a key part of China’s energy, environment and climate goals, but the fivefold increase in new mine approvals in the first-half of 2019 suggests China’s targets still provide ample room for shorter-term growth. China’s energy regulator gave the go-ahead to build 141 million tons of new annual coal production capacity from January to June, compared to 25 million tons over the whole of last year, Reuters analysis of approval documents showed.

The projects included new mines in the regions of Inner Mongolia, Xinjiang, Shanxi and Shaanxi that are part of a national strategy to consolidate output at dedicated coal production “bases,” as well as expansions of existing collieries, the National Energy Administration (NEA) documents showed.

The NEA did not immediately respond to a request for comment. Beijing aims to raise the share of non-fossil fuels in its overall energy mix to 15% by the end of next year from around 14.3% currently, and to 20% by 2030. It cut the share of coal to 59% last year, down from 68.5% in 2012.

It has also promised to adopt the “highest possible ambition” when it reviews its climate change pledges next year, with one government think tank recommending China imposes a mandatory cap on coal consumption in its 2021-2025 five-year plan. But while smog-prone regions like Hebei and Beijing have already cut coal use and shut hundreds of small mines and power plants, China is still allowing for significant increases in coal production and coal-fired power generation.

That has piled pressure on utilities to use clean combustion technology. Lauri Myllyvirta, senior energy analyst with environmental group Greenpeace, said many of the newly approved projects would likely replace small or depleted old mines.

“However, it is alarming that China’s energy planning seems to be driving at roughly maintaining current levels of coal output for the coming decade or two, which is very hard to reconcile with the goal of the Paris agreement (on climate change),” he said. “Especially given that oil and gas consumption is still increasing, it’s imperative that coal use starts falling again after rebounding for the past three years.”

Chinese coal output rose 2.6% in the first-half of 2019 to 1.76 billion tons.

MORE TO COME?

Industry groups still expect coal-fired power capacity to increase over the next few years, with investments in nuclear and renewables still insufficient to cover rising energy demand. The research unit of the China State Grid Corporation last month forecast that total coal-fired capacity would peak at 1,230-1,350 gigawatts (GW), which would mean an increase of about 200-300 GW.

A study published earlier this year also suggested China’s targets would allow the construction of another 290 GW of coal-fired capacity in the coming years. China is convinced it can continue to raise coal production and consumption while significantly reducing emissions. It has made “ultra-low emissions” technology mandatory in all new coal power plants an is also improving mine zoning regulations to ensure pollution is minimized.

By the end of last year, 80% of total coal-fired power capacity had installed “ultra-low emissions” equipment, amounting to 810 GW, the government said. Michelle Manook, chief executive of the World Coal Association, an industry lobby group, told Reuters that coal remains a crucial element in the world’s transition to cleaner energy, and the focus should be on cutting emissions rather than banning coal entirely.

“It’s not about transitioning away from any one source of energy. it’s about transitioning to cleaner energy. And with investment, coal has a significant role,” she said.


New bid to find buyer for Air India slammed as ‘selling family silver’

Updated 28 January 2020

New bid to find buyer for Air India slammed as ‘selling family silver’

  • Indian government aims to offload entire stake in debt-ridden national carrier after failed 2018 sale attempt
  • Critics blame country’s struggling economy for decision to sell airline

NEW DELHI: Renewed government attempts to find a buyer for “debt trap” national carrier, Air India, have been slammed as “selling the family silver.”

Politicians from opposition and pro-government parties condemned the move by the Indian government to offload its entire stake in the flag-carrier airline, which comes more than a year after a failed bid to sell a controlling share.

A document released on Monday said that any bidder would have to absorb around $3.3 billion of debt along with other liabilities.

Speaking in New Delhi on Tuesday, Kapil Sibal, senior leader of India’s main opposition party, the Indian National Congress, said: “When governments don’t have money this is what they do.

“The government of India has no money; growth is less than 5 percent and millions of rupees are outstanding under several social schemes. This is what they will do, sell all the valuable assets we have.”

Derek O’Brien of the Trinamool Congress, the regional party ruling West Bengal, said in a video statement that “the government has decided to sell more family silver by selling 100 percent stake in Air India. You can well imagine how bad the economy (is).”

And on Twitter, Subramanian Swamy, parliamentarian from the ruling Bharatiya Janata Party (BJP), said: “This deal is wholly anti-national, and I will (be) forced to go to court. We cannot sell our family silver.”

Monday’s document gave the deadline for submission of initial expressions of interest in purchasing the airline as March 17. In 2018, the Indian government tried to sell 76 percent of the carrier but got no takers.

To justify the latest sale attempt, Aviation Minister Hardeep Singh Puri, said: “Despite infusing 30,500 crore rupees ($4.3 billion) in AI (Air India) since 2012, the airline has been running into losses year after year. Due to its accumulated debt of about 60,000 crore rupees, its financial position is very fragile.”

He described the company as being in a “debt trap” but added that it could be saved through privatization. “We have learnt lessons from the 2018 bid.”

Referring to critical comments from fellow BJP members, the minister said they were expressing their “personal opinion.”

Jitender Bhargava, former executive director of corporate communication at Air India, said the current offer would attract potential buyers.

“India is a growth market, so anybody would like to be part of it and take the advantage. The acquisition of Air India provides the fastest way to become a global carrier,” he told Arab News.

According to Bhargava, the move had nothing to do with the current state of the Indian economy. “All the important international carriers want to expand their footprints in India because of the potential of the Indian market. The government has taken a pragmatic view on the sale of the national carrier,” he said.

“Ownership of the airline does not matter, leadership matters. Once it came into the hands of the government, bureaucracy killed it,” added Bhargava, who authored “The Descent of Air India” chronicling the airline’s downfall. “Air India under the government’s ownership cannot run, cannot survive.”

He predicted that the carrier would become a marginal player if there was no change in ownership.

Air India has a fleet of 146 aircraft and employs around 21,000 people. It was founded by prominent industrialist J.R.D. Tata in 1932 and nationalized in 1953.