China's green pledges undercut by coal projects

China's support for coal can be seen from Indonesia to India, where the Sasan Ultra Mega plant was completed this year using boilers from Shanghai

The puddle under the slide at the Tam Hung Kindergarten is inky black. A security guard says the staff has to sweep coal dust off the playground every morning. Parents whose children have developed persistent coughs blame the school's new neighbour: a huge coal-fuelled power plant built by Chinese engineers with Chinese aid.

The plant is one of a pair that have begun operating in the past five years in this village near the Vietnamese port city of Haiphong. A Shanghai firm completed work on a third plant this year by the old border that separated north from south during the Vietnam War. And another major plant financed by Chinese loans is under construction on the Mekong River Delta south of Ho Chi Minh City.

Altogether, Chinese engineering firms have built or signed contracts to build 14 coal-fired plants along the Vietnamese coast over the past five years, most of them with the help of loans from the government's China Export-Import Bank.

The building spree here is hardly unique. Since 2010, Chinese state enterprises have finished, begun building or formally announced plans to build at least 92 coal-fired power plants in 27 countries, according to a review of public documents by The New York Times.

At the Paris climate conference, China has won praise for pledging to stop the growth of its greenhouse gas emissions by 2030, largely by reducing its use of coal. But these reductions are being undercut as Chinese state-owned companies, backed by state loans, build coal-fired power plants across the developing world despite concerns about global warming and air pollution.

Once complete, the 92 projects will have a combined capacity of 107 gigawatts, more than enough to completely offset the planned closing of coal-fired plants in the United States through 2020. The expansion is the equivalent of increasing China's own coal-fired electricity output - already more than twice as much as any other country's - by more than 10 per cent.

The overseas push comes as China's state engineering firms are struggling with declining profits and a glut of coal-fired power plants at home, where economic growth is slowing. Beijing has encouraged state firms to "go out" and seek projects abroad to stay in business, increase demand for Chinese steel and bind the Chinese economy more closely with those of its neighbours.

"There is just so much excess capacity in power generation equipment, so if they're not building it in China, they want to build it abroad," said Erica Downs, an analyst at the Eurasia Group in Washington.

Paul Bledsoe, an energy consultant and former adviser in the Clinton White House, said China often offered "bargain basement prices abroad that are going to be difficult for many developing countries to turn away from."

The United States, Japan and other industrialised nations have helped finance the construction of coal-fired power plants in the developing world for decades, including in joint projects with China. Like China, they have usually required that contracts go to their companies. But as concerns about climate change have grown, there has been a move away from funding coal projects.

In 2013, the World Bank sharply restricted loans for building coal-fired power plants, and this year the Obama administration announced that it was ending public financing of coal-fired plants overseas except in the poorest countries.

In November, the 34 nations of the Organization for Economic Cooperation and Development, including the United States and Japan, agreed to limit most state financing to "ultrasupercritical plants," which burn less coal to produce the same amount of electricity.

But Chinese state-run firms, usually with loans from big state-owned commercial banks and the China Export-Import Bank and China Development Bank, have been expanding their support of coal-fired plants overseas, building less efficient plants that generate more carbon-dioxide emissions.

Since 2010, Chinese commercial and policy banks have committed at least $25 billion to such projects, according to the documents reviewed by The Times, including bond prospectuses and news releases issued by banks. The actual figure is higher because financing figures were available for only 26 of the 92 power stations identified.

A separate study by the San Francisco-based Climate Policy Initiative found that China had invested as much as $38 billion in coal-fired power plants overseas through 2014 and had announced plans for another $72 billion worth of projects, about half of that in firm commitments.

By comparison, all of the OECD nations combined provided $25 billion in government-led financing for coal projects between 2007 and 2014, according to figures compiled by the Natural Resources Defense Council.

China's support for coal can be seen across Asia, from Indonesia, where Chinese firms have built and announced plans for more coal-fired plants since 2010 than any other country, to India, where the sprawling Sasan Ultra Mega Power Project in the central state of Madhya Pradesh was completed this year using boilers, turbines and generators manufactured by the state-run Shanghai Electric Group.

©2015 The New York Times News Service