China Briefing, 21 October 2021: ‘Power woes may worsen’; Xi ‘not expected to join’ COP26; UK-China climate ties

§ Snapshot

China’s power shortages “may worsen” despite Beijing’s orders to boost coal supply, Reuters reported. The outlet made the prediction after data showed that China’s coal output had fallen in September compared to August. But an expert told Carbon Brief that China’s domestic coal production “is very likely to increase from October onwards”.

Meanwhile, the Times reported that UK prime minister Boris Johnson had been told that China’s president Xi Jinping “will not attend” COP26, which is scheduled to open in Glasgow next Sunday. Asked if Xi will join the summit on Tuesday, China’s climate envoy Xie Zhenhua told Reuters to wait for an announcement. 

Furthermore, Xie told Sky News that China does not need UK actions to encourage it to set more ambitious climate goals. Xie’s statement came as Johnson wrote in the foreword for the UK net-zero strategy that “the UK is not afraid to lead the charge towards global net-zero at COP26”, adding “the likes of China and Russia are following our lead”.

§ Key developments

Power shortages ‘look set to intensify’ despite efforts, report says

WHAT: Reuters reported on Monday that China’s “power woes may worsen” despite the government’s orders to boost the production and supply of coal – the main raw material the country uses to generate electricity. The newswire said the power shortages “look set to intensify” after data from China’s National Bureau of Statistics showed that coal output had dropped in September, compared to August and the same period last year. The news added to concern that China might not be able to meet its surging energy demand in winter, the outlet noted. Coal prices in China rose to record highs at the beginning of this week before plunging following Beijing’s hint of “implement[ing] intervention measures” on the fuel’s costs, according to Reuters, Bloomberg and the Financial Times. (Last week, Carbon Brief published analysis explaining how the power shortages could impact China’s climate action.)

WHERE: Plunging temperatures in parts of China this month have deepened concern that the power supply gap could increase, Reuters reported, citing ANZ analysts. S&P Global Platts said on Tuesday that the winter heating season in northern China had started 10-15 days earlier than usual due to a cold wave. Citing “market participants and traders”, the outlet said that the early start would boost demand for coal, natural gas and electricity “sooner than expected” and was “bullish” for fuel prices. 

WHO: Alex Whitworth, head of Asia Pacific power and renewables research at Wood Mackenzie – a research and consultancy group for industries including energy – told Reuters on Monday that “the Chinese government is losing the battle to control soaring coal prices”. Whitworth noted that coal output had decreased last month “due to weather, safety and logistics challenges” despite the government’s efforts. He added that China had not “succeeded in reining in booming power demand”, either.

WHO ELSE: But Dr Yang Muyi, senior electricity policy analyst of Asia at Ember – an independent climate and energy thinktank – told Carbon Brief that “China’s main focus of the time is not to control soaring coal prices”, but to “ensure the secure supply of thermal coal for heating and power generation, especially as winter approaches”. Dr Yang explained that the current “record-high” coal prices “are due to large supply shortfalls on the back of soaring demand”. He said coal prices might still fluctuate “at a relatively high level in the short term”, adding that the impacts of the coal orders “may take time to show up”.

WHEN: China’s domestic coal production “is very likely to increase from October onwards” because many “low-cost” coal mines are ramping up their production, according to Dr Yang. He noted that the National Mine Safety Administration had made it “very clear” that the expansion of coal production capacity must be based on mining safety. “It takes time to inspect each individual coal mine to ensure that it meets the safety requirement for production,” he explained. 

HOW: State news agency Xinhua reported on Tuesday that China had permitted 153 coal mines to dial up their production capacity by 220m tonnes per year since September – a move that is expected to boost the coal output in the fourth quarter by more than 50m tonnes. Yesterday, the National Development and Reform Commission (NDRC) – which looks after the country’s macroeconomy – stated that the daily coal output had “set new record highs for this year”. It said that more than 11.5m tonnes of coal had been produced every day “recently” – a 1.2m tonnes daily increase compared to mid-September. Also, the NDRC sent a team to Qinhuangdao – China’s main coal hub – on Wednesday to “supervise the work of ensuring supply and stabilising prices for coal”. Furthermore, the state energy regulator, National Energy Administration, yesterday directed state grid firms to accelerate their development and generation of wind and solar power to increase their capabilities of supplying “clean energy” to tackle the power shortages. 

Johnson told Xi will not attend COP26, report says

WHAT: The Times reported last Friday that Boris Johnson had been “advised by diplomats” that China’s president Xi would not travel to Glasgow to attend COP26 – which is scheduled to run from 31 October to 12 November. The publication described Xi’s potential no-show as “a setback to the ambitions of the COP26 summit”, adding that Xi was “not expected to join more than a hundred other world leaders, including President Biden”. Citing “government sources”, BBC News reported that “it was possible Xi could change his mind and come at the last minute”. The Daily Telegraph, Reuters and Sky News also picked up the Times’s report. China has yet to announce whether Xi would attend the climate talks in person, via video link or not at all. CGTN, the English arm of China’s state broadcaster, reported on Tuesday that China’s climate envoy Xie would go to Glasgow for the conference.

WHEN: Yesterday, the Kremlin confirmed that Russia’s president Vladimir Putin would not fly to Glasgow for COP26, according to various media outlets, including BBC News, AFP (via France24) and the Daily Telegraph. A Kremlin spokesman said that Putin would attend the summit virtually, but gave no reasons for his physical absence, the reports said. Both Xi and Putin had received “personal invitations” to COP26 by Johnson, The Sunday Times said in July. 

WHO: Xi has not left China for nearly two years. Bloomberg reported earlier this month that Chinese diplomats had said that Xi did not plan to go to Rome for the G20 Summit, which will be held from 30-31 October. Bloomberg cited “four people familiar with the matter” and three of them referred to Covid-19 as a reason for Xi’s expected absence. Last month, Xi addressed the UN General Assembly in New York via a pre-recorded video. Xi also failed to show up at COP15, a UN biodiversity conference that took place in China’s Kunming last week. Instead, Xi delivered a virtual keynote speech. Bloomberg and BBC News reported that Xi’s last overseas visit was to Myanmar from 17-18 January last year. 

WHY IT MATTERS: China – which is currently the world’s largest carbon dioxide (CO2) emitter – is widely considered as one of the key players at COP26. Alok Sharma, president-designate for COP26, said last month that the “ball is in China’s court” when it comes to ensuring the success of the summit. Xi’s possible non-attendance has led to widespread media coverage as many are expecting China to raise its climate ambition in Glasgow. (China has yet to update its Nationally Determined Contribution.) The Times called Xi’s expected absence a “snub”, adding that “British organisers” feared that it “could be a prelude to China refusing to set new climate change goals amid an energy crunch.” The Daily Telegraph said the news came “amid growing concern that the COP26 summit will not be a success”. UK transport secretary Grant Shapps told Sky News that “if countries don’t come [to COP26] they’ll be the outliers”. The Guardian said it understood that “that Xi’s participation in person is still possible and the UN said China still intended to participate”.

CHINA’S RESPONSE: When asked about Xi’s plan for COP26 by Reuters on Tuesday, Xie – China’s special envoy on climate change – said a formal announcement was yet to be made. He told the newswire: “We still need to wait for the information (from the) Ministry of Foreign Affairs and only after they make an announcement will we tell you.” Xie noted that COP26 was deeply significant and that China wanted the conference to be a success, the outlet said. On Sunday, the envoy told a domestic “carbon neutrality” forum that China would contribute its “Chinese wisdom” to COP26, Caixin reported. China’s foreign ministry has not yet confirmed whether or not Xi will travel to Glasgow.

§ Other news

XIE: China’s climate envoy Xie Zhenhua has said that China does “not need UK actions to encourage” it to be more ambitious in addressing climate change. Xie told Sky News at a virtual press conference on Tuesday: “We do not need the actions taken by the UK to encourage us.” The envoy stressed that China “[would] also set up a very clear roadmap together with clear timeframe policy measures and actual visible actions to support its double targets”.

JOHNSON: Also on Tuesday, the UK released its 368-page net-zero strategy. Boris Johnson wrote in the foreword that “the United Kingdom is not afraid to lead the charge towards global net zero at COP26, because history has never been made by those who sit at the back of the class hoping not to be called on…so the likes of China and Russia are following our lead with their own net zero targets”.

UK-CHINA TIES: Caroline Wilson, the British Ambassador to China, has stressed the importance of UK-China climate change cooperation to the Chinese state media. Wilson told Global Times that the two nations “must continue to stand together as we support partners around the world in meeting their climate commitments”. In another interview with CGTN, she said: “We’re working closely with China on green financing, so that scenario where we have to do more, including ensuring the financing, is available for developing countries.” 

RENEWABLE: China is bulk-building “new energy” projects in its vast deserts, according to state media. The province of Gansu in north-western China started the construction of 39 renewable energy projects simultaneously last Friday, reported CGTN. With a combined investment of $10.8bn, these projects involve solar, wind and solar-thermal power plants, as well as energy storage facilities, the official channel said. Their total installed capacity is expected to reach 12.85 gigawatts (GW), the outlet added. Local officials also hope that these projects can help them prevent and control desertification, China News Service reported. 

INTERVIEW: Li Gao, director-general of the department of climate change in China’s Ministry of Ecology and Environment, told ITV News that developed nations should take more responsibility for climate change rather than blaming others. In what was described as “a rare interview”, Li reasserted Beijing’s determination to hit its “dual-carbon” goals, but also acknowledged the challenge. “We need to deal with the problem of controlling coal use and reducing coal use while ensuring [economic] development,” he said.

NEV: The development of the “new energy” vehicle (NEV) industry is “accelerating” in China, the Ministry of Industry and Information Technology said at a press conference on Tuesday. The ministry said that the domestic production and sales of NEVs had both surpassed 2.1m in the first nine months of 2021, which “further enhanced [China’s] world-leading position” in the field. In China, “new energy” vehicles refer to automobiles that use a “new type” of power system and are driven entirely or mainly by a “new type” of energy, according to an official notice. It mainly includes pure electric vehicles, plug-in hybrid vehicles and fuel cell vehicles.

ETS: China’s national emissions trading scheme (ETS) – which was launched on 16 July – had seen more than 18m tonnes of carbon emission allowance traded by Monday, according to statistics reported by Shanghai Securities News. The cumulative turnover had reached 845m yuan ($132m), the publication said. Lai Xiaoming, chairman of Shanghai Environment Energy Exchange – which built the trading platform and currently supervises the national ETS – told the outlet that non-ferrous smelting, cement, steel and other industries were likely to be incorporated into the market “by the end of next year”. Lai said that the introduction of institutional investors was “also being accelerated”.  

§ Extra reading

• Comment: China’s overseas coal pledge is not a climate change gamechanger – Mathias Lund Larsen, The Diplomat
• In depth: China’s struggle to balance green goals with keeping lights on – Bai Yujie, Luo Guoping, Chen Xuewan and Han Wei, Caixin
• Measures to accelerate and deepen power sector reforms announced in China – David Fishman, The Lantau Group
• Comment: Why carbon pricing is crucial to China’s climate change pledges – Alicia Garcia-Herrero and Junyu Tan, South China Morning Post

§ New science

China’s future food demand and its implications for trade and environment
Nature Sustainability

A new study – which estimates that China’s food demand will increase by 16-30% over 2020-50 – has found that satisfying this demand without harming the environment is “one of the greatest sustainability challenges for the coming decades”. The authors modelled the change in China’s food demand over 2020-50 using a range of future scenarios. They found that to meet the demand, the country would domestically require 3-12m hectares of additional pasture over this time – driving a change in agricultural greenhouse gas emissions of between -2% and 16%. Meanwhile, the study noted that agricultural imports would account for 88-226m tonnes of CO2 equivalent of emissions imported to China every year – comprising 13-32% of China’s “global environmental impact”. Zhao Hao – the lead author of the study from the IIASA Biodiversity and Natural Resources Program and the Chinese Academy of Sciences – told Carbon Brief that the findings had “far-reaching implications for systematically designing the food system in China related to food demand, production systems, and environmental and resources management.” 

Higher sensitivity of planted forests’ productivity than natural forests to droughts in China
JGR Biogeosciences

New research has found that the vegetation productivity of planted forests was more sensitive to drought than that of natural forests in China. The study showed that the productivity of planted forests suffered larger negative anomalies under drought stress, but recovered at a faster rate than natural forests after drought. The researchers said the observed differences in the sensitivity to droughts reflected the “structural and functional differences” between planted forests and natural forests ecosystems. Dr He Bin from Beijing Normal University, the paper’s corresponding author, told Carbon Brief: “Knowledge from this study is crucial for the understanding of changes of planted forests in the context of climate change.”

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