Cleaner Coal in China Cleaner Coal in China
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I N T E R N A T I O N A L ENERGY AGENCY Please note that this PDF is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/about/ copyright.asp Cleaner Coal in China Cleaner Coal in China China’s rapid economic growth has aroused intense interest around the world. Policy makers, industrialists, investors, environmentalists, researchers and others want to better understand the issues that this populous nation faces as it further develops an already thriving economy largely fuelled by coal. This study sheds light on the Chinese coal supply and transformation sectors. China’s coal, mined locally and available at a relatively low cost, has brought enormous benefits to energy consumers in China and to those outside the country who enjoy the products of its coal-based economy. Yet from another perspective, China’s coal use has a high cost. Despite progress, health and safety in the thousands of small coal mines lag far behind the standards achieved in China’s modern, large mines. Environmental degradation is a real and pressing problem at all stages of coal production, supply and use. Adding to these burdens, emissions of carbon dioxide are of concern to the Chinese government as it embarks on its own climate protection strategy. Technology solutions are already transforming the way coal is used in China and elsewhere. This study explores the context in which the development and deployment of these technologies can be accelerated. Providing a large amount of new data, it describes in detail the situation in China as well as the experiences of other countries in making coal cleaner. Above all, the report calls for much greater levels of collaboration – existing bi-lateral and multi-lateral co-operation with China on coal is found lacking. China’s growing openness presents many commercial opportunities. Establishing a global market for cleaner coal technologies is key to unlocking the potential of technology – one of ten major recommendations made in this study. -:HSTCQE=UY]VYU: (61 2008 24 1 P1) 978-92-64-04814-0 €100 INTERNATIONAL ENERGY AGENCY Cleaner Coal in China IEA member countries: Australia INTERNATIONAL ENERGY AGENCY Austria The International Energy Agency (IEA) is an autonomous body which was established in Belgium November 1974 within the framework of the Organisation for Economic Co-operation Canada and Development (OECD) to implement an international energy programme. It carries out a comprehensive programme of energy co-operation among twenty-eight Czech Republic of the thirty OECD member countries. The basic aims of the IEA are: Denmark n To maintain and improve systems for coping with oil supply disruptions. n To promote rational energy policies in a global context through co-operative Finland relations with non-member countries, industry and international organisations. France n To operate a permanent information system on international oil markets. n To provide data on other aspects of international energy markets. Germany n To improve the world’s energy supply and demand structure by developing Greece alternative energy sources and increasing the efficiency of energy use. n To promote international collaboration on energy technology. Hungary n To assist in the integration of environmental and energy Ireland policies, including relating to climate change. Italy Japan Korea (Republic of) Luxembourg Netherlands New Zealand Norway Poland ORGANISATION FOR Portugal ECONOMIC CO-OPERATION AND DEVELOPMENT Slovak Republic Spain The OECD is a unique forum where the governments of thirty democracies work together to address the Sweden economic, social and environmental challenges of globalisation. The OECD is also at the forefront of Switzerland efforts to understand and to help governments respond to new developments and concerns, Turkey such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting United Kingdom where governments can compare policy experiences, seek answers to common United States problems, identify good practice and work to co-ordinate domestic and The European Commission international policies. also participates in the work of the IEA. © OECD/IEA, 2009 International Energy Agency (IEA) 9 rue de la Fédération, 75739 Paris Cedex 15, France Please note that this publication is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/about/copyright.asp FOREWORD - 3 FOREWORD BY THE EXECUTIVE DIRECTOR OF THE IEA In 1999, the IEA Coal Industry Advisory Board (CIAB) reported on coal in China.1 Its recommendations focussed on coal sector reform and opportunities for co-operation. Today, much of that report is of merely historical interest, such is the rate of change in China over the last decade. Remarkable progress has been made in a sector that has fuelled China’s rapid economic growth, bringing with it a better life for many of China’s citizens. Today, coal production in China provides more energy to the world’s economy than the whole of Middle Eastern oil production. This report is a timely reminder that the use of coal on such a scale cannot be ignored – it is in everyone’s interest to ensure that the environmental concerns associated with coal can be managed, even in these times of economic uncertainty. It contains a wealth of information to guide those with an interest in engaging with China and helping to shape a cleaner future. Its recommendations are pragmatic. They offer opportunities for China to grasp, but only if developed countries show their commitment to clean energy by moving quickly to establish markets for technologies that are currently too expensive and not fully demonstrated. I am thinking in particular of carbon dioxide capture and storage – a critical technology for the world at large. The IEA has been fortunate to have the support of the National Development and Reform Commission, ably assisted by the China Coal Information Institute, and the UK Foreign and Commonwealth Office in carrying out this work. This allowed us to bring together a team of consultants, some based in China, others in Japan and the UK, to complete the project. Experts from China worked on secondment at the IEA in Paris and made site visits to Germany and the UK. Reciprocal visits were made to many facilities in China, of all ages and sizes. Such exchanges at a working level need to grow, and professional relationships established that can serve the aims and objectives of governments. This initiative has also highlighted some practical difficulties. Reliable information on China remains a much sought-after and valuable commodity. Likewise, China seeks better information on how other countries have implemented effective energy and environmental policies. Language remains a barrier to sharing information – we need more bilingual experts and analysts to collect, assimilate and disseminate information of benefit to Chinese policy makers and their counterparts elsewhere. In May 2008, the CIAB held a working meeting in Beijing for the first time. Participants made site visits to the Shendong coalfield in Inner Mongolia and heard the IEA Secretariat present a draft of this report to Chinese authorities. They were, without exception, encouraged by what they saw and heard. I wish to echo their sentiments and urge governments and corporations to accelerate their efforts in working with 2009 1. Coal in the Energy Supply of China, IEA Coal Industry Advisory Board, OECD/IEA, Paris, 1999. OECD/IEA, © 4 - CLEANER COAL IN CHINA China. Commercial activity, official government-to-government co-operation, research and development partnerships and personal relationships are all needed to make clean energy a reality. China itself has the opportunity to steal a lead in the development of cleaner coal technologies in response to a growing, global market. In that respect, my organisation is committed to promoting the competitive markets that we know are needed to win the environmental benefits of widespread deployment of cleaner technologies. The report and key recommendations have been developed by the project team and were subject to peer review by experts inside and outside of China, as well as within the Secretariat. Whilst our member countries have given helpful feedback on the report, it does not necessarily reflect the views or position of IEA member countries, or of any official Chinese body. It is published under my authority as Executive Director as part of the IEA aim to engage more closely with all major energy-consuming countries. Nobuo Tanaka Executive Director 2009 OECD/IEA, © FOREWORD - 5 FOREWORD BY THE CHIEF ENGINEER OF THE NATIONAL ENERGY ADMINISTRATION OF THE NDRC Energy is an essential element for human survival and development. Over the history of mankind, each and every significant step in the progress of civilisation has been accompanied by energy innovations and substitutions. The exploitation and utilisation of fossil energy has boosted enormously world economic development and society as a whole. However, large-scale exploitation and utilisation of fossil energy is also one of the major causes of ecological destruction and environmental pollution. As is well known, coal is China’s dominant source of energy. It accounts for about 70 percent of primary energy production and consumption. Furthermore, coal will remain the main energy source in China for a long period of time in the future. The proportion of coal in China’s energy mix is far higher than the world average, and coal exploitation and utilisation has become one of the major causes of environmental pollution. Therefore, clean coal technology is a strategic choice for energy development in China. The central government has adopted clean coal technology as a strategy for adjusting coal industry structure, increasing the commercial value of coal and coal-based products, improving the environment, and realising the sustainable development of the coal industry.