Based on current trends, China’s carbon-dioxide emissions may peak in the next year or two, but then level off as coal usage slows, rather than fall rapidly. That would prevent the country from eliminating net emissions—becoming “carbon neutral”—by 2060, as it has pledged. It would also undercut global efforts to combat climate change.
Counting the cost
A faster reduction in coal use would be painful for many. One big cost would fall on power companies. The country’s coal-fired plants are, on average, just 12 years old, so most would be able to keep generating power for decades. Their owners would either have to swallow the costs of retiring them early, or else retrofit them to become cleaner by adding technology to try to capture the carbon they release.
An ambitious phase-out could cost as much as $1.4trn, according to a study published in January by researchers at Tsinghua University in Beijing and at the University of Maryland. Still, that would be spread over decades, and it would also be borne by state-owned firms, rather than more fragile private ones. In theory the government should be able to use China’s carbon market, set up in 2021, to motivate firms to clean up. Such schemes can put the more-polluting companies at a competitive disadvantage by making them buy credits to offset emissions.
But China’s market has had little impact so far, because regulators just give out most credits free. Another flaw is that the market is not based on companies’ total emissions but on their emissions per unit of power. That encourages firms to upgrade their old coal-fired generators to more efficient new ones, but not to stop using coal altogether.
A second cost of cutting coal would fall on workers. In Shuozhou it is hard to find anyone whose job is not linked to the industry. Some families have been working in the mines for three generations. In a part of the city that was purpose-built for miners, a park celebrates the workers with stone carvings of coal trucks, machinery and triumphant labourers.
In the dust
China produces some 4.8bn tonnes of coal annually, more than half the global total, and the industry employs about 2.7m people in mining and processing. Yet that accounts for just 0.4% of the country’s total workforce. And, strikingly, it is only half as many jobs as there were in the industry a decade ago. Thousands of small coal mines have been closed as a result of a government campaign to reduce mining accidents. Most of the remainder have become more automated. Last year one open-pit mine in the western region of Xinjiang boasted that the 300 smart vehicles that it used to strip topsoil were controlled by just six employees. In other words, much of the pain brought about by the layoffs has already been felt.
Wind and solar power, which require lots of workers for installations and maintenance, are a rapidly growing source of jobs. In 2023 the renewable-energy sector employed 7.4m people, a third more than the year before.
The third and biggest cost of cutting coal, as China’s leaders see it, would be for the country’s energy security. China has to import most of its oil and gas but has big coal reserves. In 2021 officials were spooked when droughts disrupted hydropower supplies, leading to blackouts in some of China’s industrial centres. Then in 2022 Russia invaded Ukraine, pushing up oil and gas prices. Meanwhile, a manufacturing boom increased demand for power. All that convinced policymakers that more coal was needed to keep the lights on in factories and houses.
A lobby of mining firms and officials with ties to coal-rich regions is encouraging this line of thinking. So are some local governments, which like to build more power plants than are really needed to avoid having to rely on other regions when demand is high. And things are not helped by conservative grid operators, who want to be sure they will always have enough electricity, according to one academic who advises them: “They always say the more coal plants the better; they never say the fewer the better.”
A bolder approach could let China phase down coal without causing power cuts, says Lauri Myllyvirta of the Centre for Research on Energy and Clean Air (crea), a think-tank in Finland. It would need much more renewable power and big upgrades to China’s grid to let clean energy be transferred over long distances or stored (to offset for the fact it can be generated only when the sun shines or when the wind blows). China is already spending substantial amounts on trying to clean up. Clean-energy investments came to $940bn, or 10% of gdp, in 2024. In that year alone the country installed more solar-power capacity (277gw) than exists in the whole of the United States (200gw).
The bottleneck is that China lacks a flexible, nationwide power market that could ensure clean power is efficiently dispatched to where it is needed. At the moment most power is sold locally through long-term contracts, which typically favour coal-fired plants by guaranteeing the purchase of fixed amounts of power. Attempts to reform the system have been slow. In the last quarter of 2024 China’s wind and solar power use dropped in spite of favourable weather, as a result of an “oversupply” of coal-fired power, according to analysis by crea.
All this threatens to further entrench the role of coal in the power-generation system and will make it expensive to phase out, says Yan Qin of the Oxford Institute for Energy Studies. After all, the more plants that are built, the higher the cost of abandoning them.
In Shuozhou, at least, few locals believe that China could ever cut its coal habit. When local pits are exhausted, there is plenty more coal elsewhere in China, notes one mine administrator. Consumption may start to decline soon, he says, but only very slowly. “It can’t be phased out,” says Zhu Zhiming, a former coal-truck driver who now runs a restaurant near one of the city’s mines. “They will keep mining it for a hundred years.”
