To-date, China’s overseas captive coal projects have added an estimated 1.5 billion tonnes of lifetime CO₂, which comes to almost half of all emissions currently in operation. The current projects under construction could add a total of around 3.4 billion tonnes of potential lifetime CO₂ emissions upon completion.

Not only do these overseas coal projects contribute significantly to CO₂ emissions, coal power is also a major source of air pollution, releasing fine particulate matter (PM₂.₅), sulfur dioxide (SO₂), and nitrogen oxides (NOₓ) that harm human health and the economy, in many cases creating pollution hotspots with widespread negative impacts on the local environment and populations. In Indonesia alone, emissions from existing coal-fired power plants were responsible for approximately 10,500 deaths annually and USD 7.4 billion in health costs in 2022. Under current policies, these figures could rise to 16,600 deaths per year and USD 11.8 billion in annual health costs by 2030.

CREA and PACS propose policy recommendations to expedite the implementation of President Xi’s 2021 pledge to phase-out China-backed overseas coal projects, including but not limited to:

• The pledge should explicitly cover captive coal. Approvals and financing should require renewable or hybrid alternatives, best available technology (BAT), environmental standards, and time-bound retirement plans. 

  
  

• The prioritization of financing redirected towards renewable energy investments: solar, wind, hydro, storage, and grid modernization. In host countries with pre-permit projects, targeted support for project preparation, land and transmission access, and power market reforms can accelerate renewable pipelines and reduce coal dependence. 

  
  

• Support for host country transition strategies. China and international partners should expand technical and financial assistance for national transition plans,  cooperating with local authorities to help ensure that the shift away from coal also supports economic resilience and local employment.

  
  

• Establishing a dedicated coordinating agency. Since the 2021 pledge, China has yet to designate a body responsible for its enforcement. A dedicated agency with strong coordination and regulatory powers is needed to guide implementation, ensure accountability, and intervene in irresponsible or illegal operations when necessary.

‘China is now positioned to be a leader in the global energy transition, but with an uptick in China’s overseas coal projects going online, it becomes evident that an oversight mechanism must be established to ensure that President Xi’s 2021 pledge of no new overseas coal is implemented. With clean energy growth starting to reduce coal power generation back home, China should now prioritize supporting host countries in their energy transition to prevent years of expensive, outdated carbon lock-in,’ said CREA Southeast Asia Analyst and lead author, Daniel Nesan.

‘As China steps closer onto the centre stage as a global climate leader, the need for a designated government agency to play the executive coordinator role becomes even more urgent by the day,’ said Tom Wang, co-author, founder and Executive Director of People of Asia for Climate Solutions. ‘The planet simply cannot afford to burn more coal,’ he emphasized. 

‘Every tonne of coal burned abroad undercuts not only global climate goals but also people’s right to breathe clean air. Coal pollution chokes communities and harms health at every stage of life, from underweight babies to childhood asthma, to lung cancer and premature death. By continuing to support coal projects overseas, Chinese companies are locking in years of preventable disease and premature death in some of the world’s most vulnerable regions,’ said CREA Health Impact Assessment Team Lead, Dr Jamie Kelly.