Mitigating the Environmental Impact of Coal in China

China is the second largest energy consumer in the world and most of its energy consumption is coal, 67 percent of primary energy consumption in 2002. This dominance of coal is not expected to fall significantly even as China’s energy demand grows. The Development Research Center of the State Council estimates that coal will account for 66 percent of primary energy consumption in 2010. Coal-based power generation will account for 65 to 70 percent of total generation for the next decades. Industry is the other major consumer of coal.

While China’s coal resources are deemed sufficient for its needs in the coming two decades, the environmental cost of coal use is already beginning to take its toll, particularly through SO₂ (Sulphure Dioxide) and NO_x (Nitrogen Oxides) emissions which are the leading causes of acid rain. In 2002, about 34 percent (or 6.6 million tons) of China’s SO₂ emissions were released from power plants. Acid rain falls on an estimated 30 percent of China’s land mass and can become a threat to agricultural output. China’s CO₂ (Carbon Dioxide) emissions, second only to the United States, are also a threat to the global environment. A combination of clean-coal technologies at the input, processing and output stages of the power generation process, the enforcement of emission control regulation, and sector policies (such as pricing) have the potential to mitigate the environmental impact of coal use. Significant reductions in environmental impact in the long-term will require a major effort.

The Bank's recent Energy Sector Management Assistance Program (ESMAP) -supported analytical work on China's coal sector found that coal mining is in desperate need of restructuring and modernization. Overall, coal is far behind China's power and oil/gas sub-sectors in economic efficiency, modern management, and technology. There are more than 30,000 coal mines in the country, most of them small mines producing a third of the country's coal even after widespread mine closures. The small mines are a major source of the sector's problems including lack of safety (some two-thirds of the reported 6,000 coal mining fatalities per year occur in small coal mines), environmental damage (small mines are the least equipped to address the environmental impacts of coal – only a small fraction of small mines wash their raw coal), and sub-optimal exploitation or, at worst, waste of resources. At the same time, small-scale mining is a sensitive issue that needs to be addressed in the wider context of the economic and social priorities of the town and village governments which most often operate them.

More information:
 Towards a Sustainable Coal Sector in China, June 2004 (660kb pdf)
 Energy and the Environment in East Asia and Pacific