Chinese state planners have stated that the country’s coal miners have committed to selling their coal reserves at a discount to ease the domestic power crunch.
Miners across the country’s three leading coal-producing provinces of Shanxi, Shaanxi, and Inner Mongolia pledged to cut prices this week, according to the National Development and Reform Commission, the country’s economic planning agency. The Commission added that more than 10 big coal companies had reduced prices.
The inflated price of coal and caps on how much coal-fired power generators could charge had made it difficult for many producers to generate a profit. Rory Simington, principal Asia coal analyst Wood Mackenzie, said that lower prices would probably help ease the crisis, but they had “caused chaos” for global coal markets.
COP and Coal
The decision by China to push forward with a discount on coal comes after a COP26 where little was said on behalf of on the country on the phasing out their coal use. China was conspicuous in its absence from a deal agreed at COP26 by 40 nations to phase out coal-fired power and stop building coal-fired power plants.
China instead flagged earlier this week that it is targeting a 1.8% reduction in average coal use for electricity generation at power plants over the next five years, in a bid to lower greenhouse gas emissions. This extremely limited target has disappointed campaigners, who have argued that these recent interventions will make it harder to shift to renewables.
China, the world’s biggest emitter of carbon emissions, has said it aims to hit peak emissions by 2030 and carbon neutrality by 2060. However, as coal prices lower and more coal-fired power generators are able to sell electricity at market rates, the transition to sustainable energy sources could be slowed considerably.