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COAL HARD TRUTH

Reaching China’s carbon emissions target before 2030 means a painful adjustment period lies ahead for its coal-rich provinces

By NewsChina Updated Sept.1

With abundant coal resources and low electricity prices, the city of Ordos in North China’s Inner Mongolia Autonomous Region was a haven for Bitcoin miners. The world’s largest Bitcoin mining operations were located in an industrial park on the outskirts of the city, where high-powered computers performed billions of calculations per second.  

The mines consumed astounding amounts of energy, requiring 15 dedicated power lines to maintain daily operations and costing 100 million yuan (US$15.5m) in electricity annually. 
 
On March 9, authorities in Inner Mongolia issued measures to reduce energy consumption during the 14th Five-Year Plan (2021- 2025). Classifying digital currency mining as “backward and excessive capacity,” it ordered all cryptocurrency mining operations to cease before the end of April. The Ordos crypto mines came to a halt.  

In September 2020 China announced its climate targets to peak carbon dioxide emissions before 2030 and go carbon-neutral before 2060.  

The Global Energy Interconnection Development and Cooperation Organization, a non-profit international organization dedicated to promoting sustainable development of energy worldwide, predicted in a report that China would peak its carbon dioxide emissions two years ahead of schedule.  

In 2020, China’s top environmental authorities criticized Inner Mongolia for its sluggish action in energy conservation, pointing out that the region’s total economic output only accounted for 1.7 percent of the country’s total yet it consumed 5.2 percent of its energy.  

Experts said that major polluting provinces across the country are about to face a difficult decade of major changes to their energy structures.  

During the 13th Five-Year Plan (2016-2020), Inner Mongolia failed to achieve its energy conservation goals.  

“Our task during the 13th Five-Year Plan was not achieved, a salutary reminder to other regions,” a senior official at the Environmental Protection and Resource Conservation of Inner Mongolia told NewsChina.  

Challenges Ahead 
According to data from State planner the National Development and Reform Commission (NDRC), coal consumption in the autonomous region reached 231 million tons in 2018 and 253 million tons in 2019, both figures exceeding the 13th Five-Year Plan’s control target of 225 million tons.  

Although China’s top environmental authorities did not set specific provincial and regional targets for energy consumption in the 14th Five-Year Plan, Inner Mongolia issued targets and tasks for its localities last December. Among them, two stringent indicators were defined for 2021: a 3-percent reduction of energy consumption per unit of the region’s GDP, and keeping energy consumption under 5 million tons of standard coal equivalent.  

Si Yongmei, a deputy researcher at the Inner Mongolia Macroeconomic Research Center, told NewsChina that Inner Mongolia’s economy depends heavily on energy resources, like coal and minerals, and heavy industry. She said that nearly 50 percent of enterprises with an annual income of over 20 million yuan (US$3m) in the region are high-energy consumers. The region’s energy consumption per unit of GDP is more than three times the national average. A large part of the region’s energy is consumed by light manufacturing and chemical production.  

Facing these difficulties, it is crucial for Inner Mongolia to clarify its peak emissions goals which must be to control the total amount, intensity and growth of carbon emissions. Ma Jun, director of the Institute of Public & Environmental Affairs (IPE), a non-profit environmental research organization, warned that these objectives will be difficult for the region. 

Pang Jun, deputy director of the School of Environment & Natural Resources, the Renmin University of China, told NewsChina that Inner Mongolia must make precise calculations of its carbon emissions annually to create a timeline and roadmap to peak carbon dioxide emissions.  

Workers load coal into train cars at Tongliao Railway Station, Inner Mongolia, February 2012

Buffer Period 
While no specific timeline to peak carbon emissions for Inner Mongolia has been released, senior officials in the region who spoke with NewsChina estimated the deadline will be no later than 2030.  

Inner Mongolia faces two choices: aim for a buffer period before gradually reaching peak emissions, or stringently control the emissions during the 14th Five-Year Plan to alleviate the strain of peaking during the 15th Five-Year Plan (2026-2030).  

Zhang Pu, a professor at Inner Mongolia University of Science and Technology in Baotou, told NewsChina that the earlier Inner Mongolia peaks emissions, the less it will cost to reach its later carbonneutral goal.  

As Inner Mongolia has been heavily dependent on energy, adjustments will be painful. “It’ll be very difficult to reverse 30 years of industrial and energy practices in just nine,” a senior official at the NDRC’s Environmental Protection and Resource Conservation office of Inner Mongolia told NewsChina, adding that the region is aiming for a buffer period.  

“If the pressure is too great, we’ll only be left with emergency measures or one-size-fits-all policies to meet the target, which runs contrary to the original purpose of peaking carbon dioxide emissions,” he said.  

According to official estimates, Inner Mongolia is expected to reach its emissions peak around 2035.  

Ma Jun with the IPE said that although Inner Mongolia has entered its buffer period to peak emissions by 2030, it still lags behind most provinces in China. As one of the country’s heaviest polluters, Inner Mongolia will affect China’s entire emissions peak goal if it misses its 2030 emissions target.  

Pang Jun told NewsChina that granting Inner Mongolia a buffer period would force other provinces to make even bigger cuts in carbon emissions, which is not a practical option to meeting the national goal.  

Han Wenke, a senior adviser to the NDRC’s Energy Research Institute, told NewsChina that while the emissions peak is a national goal, not every region has to reach it at the same time, and policy must support regions where conditions permit to allow them to take the lead in peaking emissions as soon as possible.  

“Even if some regions reach the target later than 2030, China will still be able to reach its overall environmental goal,” he said.  

Beijing’s last large-scale fossil fuel power plant ceased operation, March 18, 2017

Energy Restructuring
Inner Mongolia has an annual coal output of about 1 billion tons, two-thirds of which is sold to other regions while one-third is consumed in the region. About 50 percent of coal mined in the region is used for power generation and about 20 percent for manufacturing coal-derived products.  

On February 25, the Inner Mongolia Development and Reform Commission clarified its coal power capacity reduction standards, stating in a directive that it would phase out its coal power plants before the end of 2023.  

Official data shows that thermal power stations account for 70 percent of the total installed power. In 2020, Inner Mongolia generated 478.2 billion kilowatts (kW) of electricity from coal, accounting for 85 percent of the total. Coal power is still the mainstay of power production in the region.  

Inner Mongolia has been trying to accelerate adjustments to its energy structure. At the end of 2020, Inner Mongolia’s installed wind power capacity exceeded 37 million kW and its installed solar power capacity exceeded 11 million kW, leading the rankings for China in both categories. However, its over-reliance on coal has not been effectively alleviated.  

“When gaps in power usage increase or there is more demand to transmit power to other regions, we’ll have to rely on coal power if new energy sources cannot match it steadily,” said the senior official at the Inner Mongolia Development and Reform Commission.  

Although Inner Mongolia has a large coal chemical industry cluster, most coal chemical projects are struggling to turn a profit, said Wei Xianyong, a senior professor at the China University of Mining and Technology’s School of Chemical Engineering.  

“China’s carbon dioxide emissions peak has to take the conditions of the whole country into account,” he told NewsChina. “The central government has to improve top-level policy design and calculate the emissions of each province.” 

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