China to open energy sector to foreign investment as it seeks to balance energy security with carbon neutral pledge

Name: Chinese cash funds African coal plants despite environmental concerns
Uploaded: 2020-12-22T10:15:06.000Z
Duration: 2 min 6 s
Description: Chinese cash funds African coal plants despite environmental concerns

Ensuring energy security and transitioning away from fossil fuels are key concerns outlined in a new government energy white paper

China will lift investment restrictions on coal, oil, gas, power generation and new energy businesses as part of its near-term strategy

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China will lift foreign investment restrictions on coal, oil, gas, power generation – except nuclear – and new energy businesses. Photo: Xinhua

Orange Wang

Published: 6:15pm, 22 Dec 2020Updated: 11:36pm, 22 Dec 2020

China will open its energy sector wider to foreign investment as part of its plan to ensure security and prioritise the development of renewables, according to a new government white paper, although “efficient” use of fossil fuels will continue.

Investment restrictions will be lifted on coal, oil, gas, power generation – except nuclear – and new energy businesses during the 14th five-year plan period between 2021-25, said Zhang Jianhua, head of the National Energy Administration, on Monday.

At the same time, the government will continue to phase out subsidies for clean energy like solar and wind power due to rapidly declining costs and let the market play a more decisive role, he said after the release of the white paper.

China, the world’s largest energy consumer and emitter of greenhouse gases, has pledged to transition away from fossil fuels over the next four decades, but energy security and economic growth remain key concerns for the government.

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Chinese cash funds African coal plants despite environmental concerns

Balancing efforts to decarbonise the economy and maintain steady economic expansion have been complicated by China’s growing rivalry with the United States and the lingering impact of the coronavirus pandemic.

One particular challenge for Beijing will be reducing the nation’s dependence on coal, the country’s largest energy source.

Coal-fired power generation accounted for 57.7 per cent of the country’s total energy consumption in 2019, a decline of 10.8 percentage points from 2012, but still far higher than cleaner energy sources – including natural gas, hydro, nuclear, solar and wind – which together grew by 8.9 percentage points to 23.4 per cent, according to the white paper titled “Energy in China’s New Era”. Oil makes up the remaining 19 per cent.