BEIJING – China’s coal boom is slowing as top mining regions limit growth and steer investment to the clean energy that will replace the dirtiest fossil fuel.
Seven straight years of rising output, including a 10 per cent surge in 2022 after nationwide power outages crippled industry, have produced a glut of coal. That kept prices low. But record production, which reached 4.7 billion tonnes in 2023, has incurred other costs, from increased fatalities among miners to poor financial performance at mining companies.
At the same time, China is running up against a deadline to peak coal consumption by 2025 to meet its climate goals. It means output growth could slow to 1.4 per cent in 2024, Guosheng Securities said in a note, which would be the weakest since 2017.
The four biggest coal hubs, accounting for over 80 per cent of output, have eschewed the ambitious targets that characterised previous years, according to annual plans released by local governments.
Instead, much of their efforts are on supporting China’s explosive growth in renewables. The reports will set the tone for discussions at Beijing’s annual legislative meeting in early March, where energy security is likely to be a focus.
Shanxi province, the top coal miner, has cut its annual growth target to 57 million tonnes, from over 100 million tonnes in 2023. Notably, it plans to deploy solar panels on vast swathes of land now too polluted from mining to grow crops or build houses, according to its report.
Inner Mongolia, the second-biggest producer, did not set a target for coal output, but said it would fund 300 billion yuan (S$56 billion) in clean energy expansions.
The plan is to take its capacity to generate renewable power above thermal for the first time. The authorities also vowed to accelerate the construction of four desert mega bases as a part of China’s grand strategy to triple clean power by 2030.
The third-biggest miner, Shaanxi province, said it plans only a marginal increase in coal production, while cutting coal burning to improve air pollution. It will also support the 100-gigawatt expansion of China’s biggest solar panel maker, Longi Green Energy Technology Company.
The Xinjiang region, which has been a prime contributor to China’s coal output growth, said it will slow its expansion to 9 per cent, from 2023’s 11 per cent increase, while pledging to keep pushing on renewables and hydrogen. BLOOMBERG
