Report highlights benefits of early retirement of Chinese financed overseas CFPPs
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A new policy brief by the Boston University Global Development Policy Center said the early retirement of overseas coal plants would bring health and climate benefits. It would boost China’s global green reputation, reduce financial risks for Chinese financiers and companies, and build momentum for clean energy investment.
The report added that over the past two decades, Chinese banks and state-owned enterprises (SOEs) have funded and provided technology for numerous coal-fired power plants abroad.
These plants, with estimated annual emissions of 245 million tonnes of carbon dioxide and a median age of seven years, increasingly conflict with both host countries and global climate goals.
To keep global warming below 1.5°C (or 2°C), global coal consumption must decrease by approximately 95% (or 85%) by 2050. Consequently, many coal units will need to be retired early, well before their typical 40-50-year lifespan.
The report argues that Chinese policymakers and Development Finance Institutions (DFIs) are well-positioned to help governments retire coal plants early.
An orderly phase-out of coal plants mitigates financial risks for banks and investors in China and other countries while also opening up green investment opportunities for Chinese companies.
Read more: Global coal power surges 2%, China a leading contributor
Additionally, the report stresses the necessity of developing a comprehensive retirement framework. This framework would facilitate the identification of China’s overseas coal plants that should be prioritized for early retirement, providing a clear roadmap for action.
The policy brief adds that another crucial step is stopping the construction and commissioning of new coal-fired units, preventing future emissions. China has already made commitments to this effect.
Countries such as Indonesia, Vietnam, South Africa, Pakistan, and Malaysia operate coal plants that are six years old or older and are financed by China.
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