Facing China's Coal Future - IEA

Facing China’s Coal Future: Prospects and Challenges for CCS © OECD/IEA 2011
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In 2009, China consumed more coal than the next 16 biggest consumers combined (Australia,
Canada, Germany, India, Indonesia, Japan, Kazakhstan, Korea, Poland, Russia, South Africa,
Taiwan, Turkey, Ukraine, the United Kingdom and United States). In 2010, coal supplied nearly
67.1% of China’s total primary energy supply. It is utilised across key sectors including power
generation, chemicals and transportation fuels. In the power sector, 78.7% of China’s electricity
was produced from coal in 2009. As for coal production, China’s proven recoverable domestic
reserves represent 19% of world coal reserves, behind the United States (23%), but not Russia
(16%) (IEA, 2011b).
Coal is also expected to remain the dominant fuel source in China for the coming two or three
decades, driven largely by demand in the power sector. It is, however, projected that the demand
for coal in both industry and power will stabilise after 2020 (Figure 2).
Figure 2 New Policies Scenario, Coal demand in China by sector, 2000‐35
Source: IEA, 2011a.
According to the World Energy Outlook 2011 (IEA, 2011a), coal is likely to remain the cornerstone
of the electricity mix, although the share of power generation from coal is projected to drop from
79% in 2009 to 56% in 2035, with expected increases in the use of renewable energy, nuclear and
hydropower. However, under the BLUE Map 450 ppm of CO 2 case scenario, which sets the goal of
halving global energy‐related CO 2 emissions by 2050 (compared to 2005 levels) and limits global
temperature rise to 2‐3°C by 2050, coal demand would need to decrease by more than half by
2035.
The Chinese government’s strategic goal to reduce dependence on expensive imported natural
gas and petroleum has been a major factor driving this reliance on coal. This strategy has been
central to China’s economic growth, energy security and macroeconomic stability (Morse, Rai
and He, 2009). China’s energy security concerns have accelerated coal power plant expansion,
with large investments in more efficient, centralised new‐generation coal power plants. China is
also investing heavily in renewable energy, including the world’s fastest growing wind energy
sector (ERI, October 2011). Given the increase in alternatives to fossil fuels, increased energy
efficiency, investment in new nuclear facilities and the switch to lower‐emissions fossil fuels
(such as coalbed methane [CBM] and natural gas), China may significantly reduce its energy
intensity and emissions over time. However, according to the WEO New Policies Scenario, the
overall growth in demand will still lead to a significant increase in emissions (IEA, 2011a).