Seven Things You Should Know About China’s Coal Consumption

China’s issuance in August of its 2014 Energy Statistical Yearbook has recently garnered attention as a result of a New York Times article noting the yearbook’s substantial upward revision of China’s coal consumption statistics and their potential implications for China’s GHG emissions and the December Paris climate negotiations. These statistics provide additional data on China’s coal consumption, building on previous summary releases from the National Statistics Bureau in February and June publications. The increase in China’s national coal consumption figures means that the global climate challenge is greater than we believed. Yet so is the opportunity to get this right – for the people of China, and for the entire world. China isn’t hiding from this. On the contrary, China is working hard to improve its ability to monitor coal use and carbon pollution so that it can develop stronger policies to address them. That’s exactly where these new figures come from.

Moreover, this increase in historical coal consumption doesn’t change the current trajectory in China: that coal consumption is now falling across the economy in industry and in the power sector, as clean and non-fossil energy continue to expand and replace coal consumption. China is on track to meet and even exceed its climate commitments to peak CO₂ emissions by 2030 or earlier, and to add non-fossil power equivalent to the entire U.S. power generating capacity by 2030. In fact, industry experts expect that in its next five year plan, China will increase its wind and solar targets for 2020 from an already impressive 200 GW and 100 GW, respectively, to 250 GW and 150 GW, substantial increases that show just how serious they are in building out their renewables infrastructure to reduce China’s coal dependency.

The new coal consumption figures will not derail the Paris climate talks, since they have already been taken into account in many climate analyses after they came out in preliminary form earlier this year. Nor should they cast doubt on China’s commitment to battle climate change, including its support for an enhanced transparent global system of reporting and review of climate actions.

Here are seven things you should know about China’s coal consumption:

1. Coal Use Was Higher Than Anyone Thought

China revised its coal consumption data based on the results of its 2013 economic census, an enormous national effort conducted every five years designed to collect much more detailed data on the economy than is gathered on an annual basis. This census found more coal consumption than previously thought in many factories and small industrial boilers that burn coal in China. The difference was particularly significant in recent years, and the new data indicate that China consumed up to 14 percent more coal per year than previously thought. However, the adjusted figures also show that China’s non-fossil energy, as a percentage of primary energy, was also slightly higher than previously calculated.

According to the U.S. Energy Information Administration, which reported on China’s preliminary revised data in September:

The direction and the magnitude of the revision are largely consistent with the widely reported issues associated with Chinese coal statistics, which likely are the reasons for previous upward revisions of coal consumption: disagreements between national totals and the sum of provincial reports, misalignment of reporting methods, and inherent difficulties in achieving data accuracy in a constantly and rapidly changing market as large as China’s. Uncertainties remain in China’s coal data, which should be recognized in future analysis.

China will have to increase its estimated GHG emissions from previously reported levels for 2013 and earlier years, but these more accurate coal consumption figures reflect China’s willingness to be transparent about its data as it seeks to put a price on carbon through a carbon cap and trade program, and to set a national cap on coal consumption.

2. China Can Still Meet its Climate Commitments

The revisions in China’s historical coal consumption data will have little or no effect on the country’s ability to meet its climate commitments to peak CO₂ emissions by 2030 or earlier, and obtain one-fifth of its energy through non-fossil sources by 2030, as the trends in these areas are clear, along with China’s intention to increase its renewables uptake through green dispatch.

The U.S. Energy Information Administration analysis found that in 2014, China’s energy-content-based coal consumption was essentially flat, and production declined by 2.6%. This decline is continuing in 2015, as clean and non-fossil energy including hydro, wind, nuclear and solar continue to expand and replace coal consumption. China’s provinces and cities beset by heavy air pollution have been tasked since 2013 with reducing their coal consumption and have been eliminating old coal-fired boilers and equipment and replacing them with more efficient equipment, combined heat and power, as well as switching to natural gas.

3. A National Coal Consumption Cap Would Accelerate China’s Climate Efforts

The need to reduce China’s dependence on coal is more urgent than ever. Last week, the China Coal Cap Plan and Policy Research Project, a group of over 20 leading Chinese stakeholders, including government think tanks, research institutes, and industry associations, met in Beijing to present a comprehensive roadmap and policy package for establishing and implementing a national coal consumption cap. Close to 21 provinces and autonomous regions and more than 30 cities have already set different targets for coal consumption reduction. A national coal cap would build on these efforts, reducing the share of coal in China’s energy consumption from the current 66% to below 58% by 2020, protecting the environment and conserving resources efficiently while providing a basis for future growth in clean energy industries. This could enable China to peak its CO₂ emissions by 2025, five years earlier than its current target.

The China Coal Cap Project has also calculated that according to the revised coal consumption figures, China actually achieved 25% more energy savings during the 2011-2014 time frame than previously estimated, which translates to about 0.33 billion tons of CO₂ reduction.

4. China’s Revised Coal Data Will Not Derail the Paris Climate Talks

The publication of the 2014 Energy Statistical Yearbook includes detailed provincial and sectoral breakdowns of China’s additional coal consumption. Yet, as noted, the upward revision of China’s coal data is not entirely new, and was included in earlier National Bureau of Statistics notices and publications that came out in February and June.

As a result, many climate and energy experts have already factored these revised data into their analyses. Most importantly, according to the World Resources Institute, the UN Framework Convention on Climate Change secretariat, has confirmed that its most recent “synthesis report“–a document that outlines how much greenhouse gas pollution countries are willing to cut in the lead-up to Paris, incorporates the most recent Chinese data.

5. China is Improving its GHG Monitoring Capabilities

In 2014, China announced a mandatory national GHG reporting program that would cover companies and organizations in key GHG emission industries. By the end of 2014, China had released draft GHG accounting guidelines to cover 14 key industries, with an additional nine guidelines under development for 2015. China has also begun the process of planning and designing the national electronic reporting system that will collect and manage GHG emissions data from across the country.

Under the Climate Change Working Group GHG Data Initiative, the U.S. is providing technical guidance and leveraging its information, tools, and experience gained from designing and implementing a successful national greenhouse gas reporting program to assist China’s efforts to develop its own national GHG reporting program.

6. China Supports Stronger International CO₂ Monitoring and Reporting

As my colleague Jake Schmidt explained here, the climate agreement in Copenhagen began to set out a global monitoring, reporting, and verification (MRV) system to help get regular information on the progress that countries are making towards their targets and shine an international spotlight on their progress. The September US-China Joint Presidential Statement on Climate Change covers this when it states: “Both sides support the inclusion in the Paris outcome of an enhanced transparency system to build mutual trust and confidence and promote effective implementation including through reporting and review of action and support in an appropriate manner.”

On November 2, China and France went a step further by signing a Joint Statement agreeing that the Paris deal should include regular checks on whether signatories are keeping their commitments to reduce emissions. China also appeared to broadly back France’s proposal that countries’ emissions targets be automatically updated every five years.

7. China is Serious About Climate Change

China is getting better at monitoring its energy mix and its emissions, precisely because the country understands the climate threat and is working with the rest of the world to fight it.

No one has a bigger stake in getting this right than China itself. The United States and China are partners in the global shift away from dirty fuels like coal and toward clean energy options like wind and solar. China has invested more in this shift than any other country on Earth.

As President Obama said on Friday when rejecting the Keystone XL pipeline, America is now a global leader when it comes to taking serious action to fight climate change. Now is the time to step up U.S. cooperation on climate change with China, to ensure that the two largest GHG emitters in the world can also be the two countries doing the most to tackle climate change.

NRDC