What’s new: Top Chinese policymakers reiterated the importance of coal for the country’s energy security and laid out a plan to add 300 million tons of coal production capacity this year.
The State Council, China’s cabinet, pledged Wednesday to support coal production and projects to ensure the country’s energy supplies in a meeting chaired by Premier Li Keqiang. The expansion would represent about 7% of China’s projected coal consumption for this year.
The official spotlight on coal reflects policymakers’ concerns about energy supplies after last year's power shortages, analysts said. It also underscores China’s rising energy demand and declining coal imports amid uncertainties caused by the war in Ukraine, they said.
The context: The cabinet’s vow to increase coal production indicates that China will maintain an expansion of output that started in the fourth quarter of 2021.
China has set ambitious long-term climate goals and renewable energy development plans, but coal is still the top priority for the country’s energy security and generates about 60% of electricity nationwide.
According to a March document issued by the National Development and Reform Commission, China will add coal capacity by launching new projects, expanding existing ones and reopening idled facilities.
A report by China Energy Investment Corp. predicted that China’s 2022 coal consumption will rise 2.2% to 4.37 billion tons. Power generation and chemical industries will be the main consumers with rising demand.
Contact reporter Han Wei (weihan@caixn.com) and editor Bob Simison (bob.simison@caixin.com)
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