Striving to curb coal use

China's domestic coal production fell 3.5 percent in 2015, while imports dropped by almost 30 percent, according to Chinese government data.

The combination of lower domestic production and collapsing imports means the Asian nation's coal consumption is estimated to have fallen by five percent, said the US-based Institute for Energy Economics and Financial Analysis (IEEFA).

Studies conducted by environmental group Greenpeace also came to the same conclusion. "All this suggests that both power sector coal consumption and total coal consumption probably fell by more than four percent," said a report released by the NGO last week.

The document also noted that the country's carbon emissions dropped by three to four percent in 2015.

Economic factors

A multitude of factors are behind this drop in coal use in China - a country that is heavily reliant on the fossil fuel to produce energy. Bill Hare, director of Germany-based Climate Analytics, says slowing economic growth in China has led to a fall in energy demand.

"The GDP growth rate in China has been steadily declining over the last four years, from 9.5 percent in 2011 to around 7.0 percent in 2015. As economic growth is the key driver of energy consumption, a slowdown in economic activity might reduce coal consumption," Hare told DW.

This view is shared by Tim Buckley, an energy analyst at IEEFA, who says that China's economic transition is one of the major reasons why coal use in the world's second-biggest economy is falling faster than expected. "The Chinese economy is undergoing a massive structural transition away from heavy industry towards less energy-intensive service sectors," noted Buckley.

Moreover, as debt-fueled investment projects in China started to run out of steam late last decade, demand for heavy industry products such as steel and cement - whose production uses massive quantities of coal - has peaked, said Greenpeace East Asia climate and energy campaigner Dong Liansai. The development has contributed to lower demand for coal-generated electricity, he added.

Government's policies

At the same time, growing public concern over the poor quality of air in Chinese cities has prompted the government to formulate stringent measures to deal with the problem.

In 2014, Premier Li Keqiang even announced a "War on air pollution" - following a year of what has been termed as "airpocalypse" in the capital Beijing. Li's plan to fight against air pollution includes reforming "the way energy is consumed and produced" and eliminating outdated energy producers and industrial plants.

As part of the efforts, the government has ordered the closure of a number of coal-fired power plants, as pollutants emitted by the burning of coal are considered to be the single largest contributor to the smog that has periodically engulfed parts of China in recent years.

At the end of 2015, coal accounted for a massive 64.4 percent of China's energy mix, and the government intends to cut the share to about 62.6 percent by 2017.

"The fact that the number one cause of pollution is coal burning tends to support the premise that coal consumption would be under pressure," IEEFA analyst Buckley told DW.

"China has clearly flagged a long-term policy to diversify its electricity generation fleet - more nuclear, wind, solar, gas and hydro," Buckley added, pointing to the almost 30.5 gigawatt (GW) of wind power capacity China installed in 2015 alone.

In a report IEEFA published last week, it was also estimated that the total wind power generation capacity across China had reached 145 GW by the end of 2015, almost double that in the United States (about 75GW), and more than triple the estimated 43 GW of capacity in Germany.

But Beijing's efforts are not limited to wind power alone. The government also plans to increase solar power capacity to 150 GW by 2020. This means the country uses less coal to generate electricity, says analyst Buckley.

Besides increased emphasis on renewable energy, Beijing is also providing financial incentives for companies to accelerate the shift away from coal.

For instance, the government announced last week that it would allocate $4.65 billion to facilitate the closure of around 4,300 coal mines over the next three years, as well as further reduce domestic production by 700 million tons. In addition, no new coal mines will be approved for the next three years.

What more should China do?

Greenpeace campaigner Dong said it is important that Beijing move away from its coal addiction. "The demand for coal has been dropping in the last two years, making existing coal mines increasingly unsustainable. The next crucial step is to put a national cap on the production and use of coal in China's upcoming 13th Five Year Plan," Dong said.

The activist also said China's plan to boost renewable energy production is an important element in the nation's bid to curb greenhouse gas emissions. The government's plans foresee renewable sources accounting for 15 percent of China's energy mix by 2020 and reach 20 percent by 2030.

However, analyst Hare said this target is still not consistent with the goal of limiting global temperature rise well below two degrees.

"The weak carbon intensity target as stated in China's climate pledges appears inadequate," says Hare. "GHG Emissions have to peak before 2025 in China to limit global warming well below two degrees, five years earlier than proposed by Beijing."

But analysts such as David Livingston, a climate expert at the Washington-based Carnegie Endowment for International Peace, argue China's actions are driven predominantly by the desire to redress the issue of local air pollution, rather than exclusively to address global climate change. "All politics is local, and that's as true for local air pollution problems in a centralized, single-party system as it is in a liberal democracy," he told DW.

Referring to a study conducted by Research Center for Climate and Energy Finance under the Beijing-based Central University of Finance and Economics, Livingston said China would need to invest some $389 billion and increase climate change investment by four percent each year in order to improve air quality and meet China's pledge to cut carbon emissions.