As it grapples with pollution China will stop approving new coal mines for the next three years and continue to trim production capacity as the world’s biggest energy consumer tries to shift away from the fuel.
China will suspend the approval of new mines starting in 2016 and will cut coal’s share of its energy consumption to 62.6 per cent this year, from 64.4 per cent now, Xinhua News Agency reported, citing National Energy Administration (NEA) head Nur Bekri.
The world’s biggest producer of carbon emissions is seeking to boost the use of renewable fuels as smog has blanketed cities from Shanghai to Beijing, forcing factories and schools to close and intensifying pressure on public officials to cut pollution.
In December China suspended price adjustments for fuel as a way to curb automobile exhaust and it has pledged to peak carbon emissions around 2030, by which time it aims to derive 20 per cent of the energy it uses from clean sources.
“This new policy, along with efforts to eliminate inefficient mines, may help to ease the severe domestic oversupply” of coal, Mr Deng told Bloomberg from Guangzhou.
“It will take several years to take effect.”
China shuttered a similar number of mines last year, wiping out 70 million tonnes of production, according to a separate statement from the NEA.
The country is on track to produce 3.58 billion tonnes of coal this year, down 0.5 per cent from 2014, according to the NEA.
China plans to increase wind and solar power capacity by more than 21 per cent and have at least 20 gigawatts (Gw) of new wind power installations and 15Gw of additional solar photovoltaic capacity next year, according to the NEA statement.
Beijing officials last week raised the city’s air pollution alert to orange, the second-highest on the four-grade scale, warning children and the elderly to avoid outdoor activities as limited visibility from the thick smog forced the airport to cancel 227 departures.
Coal demand in China has slid as its economy slows amid a shift toward consumption-led growth and while it intensifies efforts to rein in pollution. China plans to ask companies to replace electricity generated from their own coal-fired plants with renewable energy, the National Development and Reform Commission said last month
Thermal coal at the port of Newcastle in Australia, a global benchmark, dropped to US$50.63 a ton in the week ended December 25, the lowest since December 2006, according to data from Globalcoal.
China’s total coal production capacity including mines under construction is estimated at more than five billion tonnes while its coal output for this year will probably reach 3.7 billion tonnes, leaving more than 20 per cent of its capacity idle, according to David Fang, a director with China Coal Transport and Distribution Association in Beijing.
The NEA estimates China this year will consume 3.96 billion tonnes of coal, 550 million tonnes of oil and 205 billion cubic metres of natural gas, according to the Xinhua report.