China has kept its promise to stop funding overseas coal, but loopholes are helping coal expand

In 2021, Chinese President Xi Jinping pledged to halt funding for overseas coal power plants during a speech at the United Nations General Assembly, aiming to combat climate change. However, five years later, as the assembly convenes again, China's climate commitments are falling short, and the phase-down of coal is progressing slowly.

Despite China's cancellation of the majority of coal projects it had planned in 2021, according to a recent report, loopholes in regulations are allowing Chinese firms to circumvent the pledge and continue investing in overseas coal. As a major infrastructure financier in the Global South and a leader in renewable energy technology, China's commitment is crucial for the transition to clean energy across Asia and Africa.

The Asia Society Policy Institute's China Climate Hub warns that the increasing demand for energy in Southeast Asia, often referred to as "China's backyard," may lead to a resurgence in coal fever as countries prioritize energy security. Li Shuo, the director of the Asia Society Policy Institute's China Climate Hub, emphasizes that this trend could undermine China's coal moratorium efforts.

China remains the world's largest annual emitter of carbon dioxide, while the United States holds the title for the highest historic emissions. Although China's coal consumption is gradually decreasing, the country continues to lead in the construction of new domestic coal infrastructure.