China shelves plans to build 15 coal plants abroad after ban on funding: study

China has shelved plans to build 15 coal power plants overseas -- with a capacity of around 12.8 GW -- after it banned funding such projects in 2021, while another 37 GW of capacity currently in the pre-construction phase could be stopped, a new study showed April 22.

The shelved projects were to be concentrated in countries including Vietnam, Turkey and Bangladesh.

"Many of these cancellations were a result of revised domestic energy plans, which emphasize the importance of host countries' policies and priorities," the study by Helsinki-based think tank, the Centre for Research on Energy and Clean Air, or CREA, said.

However, 18 projects with a capacity of 19.2 GW are in a "grey area" and could still go ahead, having secured the necessary financing and permits, CREA said, adding that a lack of clear rules had allowed Chinese developers to continue to build new coal power projects.

In September 2021, President Xi Jinping told the United Nations General Assembly that China would shut overseas coal projects to cut greenhouse gas emissions, but it was unclear whether existing coal plants would continue.

However, the latest guidelines by the National Development and Reform Commission recommend the reexamination of another 30 China-backed plants now under construction overseas, involving a total capacity of 30 GW, while also recommending that project developers proceed cautiously.

"This leaves options open for Chinese firms to withdraw if they have sufficient reason and manageable penalties to do so, particularly if projects are in the earlier stages of construction," CREA said.

Some projects could continue

"A grey area still remains for projects that have already secured the necessary permits," CREA said, citing the 18 coal power projects with 19.2 GW capacity which could potentially move ahead.

Projects with a total capacity of 11.2 GW have secured financing and permits to go ahead and another 8 GW are captive coal projects linked to major BRI industrial parks in Indonesia, which the Indonesia government considers a priority, it added. The other projects which could go ahead are located in Cambodia, Pakistan, the UAE and Vietnam

The CREA also found two new China-backed projects in Indonesia that had recently won bids to construct and three plants, with a total capacity of 3.7 GW, that secured permits in Bangladesh "despite not having closed financing at the time of Xi's announcement."

The NDRC guidelines also encourage the upgrading of operating coal-fired power plants so they align with international emission standards, regardless of the host country's emissions standards.

"This is an important recommendation as most overseas coal plants have been built with lax emission standards, allowing them to emit dangerous levels of pollution that are far higher than China's own domestic allowances," CREA said.