For China, One Overlooked Consequence of the Russia-Ukraine War
The China Project
The following is an excerpt from Taylah Bland's op-ed in The China Project. Taylah is a Schwarzman Fellow at the Asia Society Policy Institute's Center for China Analysis.
Russia’s invasion of Ukraine on February 24, 2022 triggered increased global instability and unrest. One of those ramifications has been surging energy prices. Countries around the world began to feel the impacts of increasing prices, but China, among the states most heavily reliant on Russia’s oil exports, felt it the most. On the one-year anniversary of Russia’s invasion, it’s important to consider the often-overlooked effects the war has had on China’s ability to meet its climate goals.
In response to newer threats to energy security post-invasion — such as price volatility, supply constraints, and general supply chain management — China turned its focus to prioritizing the protection of its own domestic energy supply. However, energy security in China was already a major concern. In 2021, China’s plans to accelerate its transition to cleaner energy by using more renewables were partly derailed when parts of the country experienced forced blackouts and load shedding. The combination of past negative experiences coupled with the heightened instability over energy supplies in light of the invasion meant that China doubled down on prioritizing its energy security. The increases in natural gas prices, necessary for utilizing renewable energy, meant China needed to reevaluate its energy mix.
But this focus on security came at the expense of China’s commitments to the path of decarbonization and its goals of 2030 peaking and 2060 net zero emissions: It returned to coal.
In the immediate aftermath of Russia’s invasion, Russian coal exports were steeply discounted. Russian coal at Baltic ports was being sold at discounts ranging from 41% to 67%. China saw this as an opportunity to capitalize amid growing uncertainty on the war’s progression and the potential ramifications of extended global instability. In May 2022, Russian coal exports to China rose 20% year-on-year (5.5 million tons). In June, it rose by 55% (6.2 million tons).
In conjunction with increased coal imports, China also looked to increase its coal mining to provide even greater domestic energy supply stores. In 2021, China increased coal plants by 25 GW and started construction on 33 GW of coal generation. Comparatively, the rest of the world only started 10 GW of coal plants. In February 2022, fossil fuels were still accounting for almost 60% of electricity generation. China’s focus on capitalizing on cheaper coal imports, coupled with increased coal mining domestically, meant that it was in a position to better ensure it would meet its domestic energy needs — at the expense of expanding renewables.