This increase conflicts with China's clean climate goals announced in 2021, which aimed to control new coal-fired power generation projects and restrict coal consumption to limit carbon emissions. The surge in coal capacity approvals is attributed to the rise in peak power demand driven by air conditioner usage during heatwaves in 2021-2022. Despite efforts to reduce coal dependency, new coal projects in China have increased since 2022, reaching the highest level since 2015.
In the last two years, China approved a cumulative 218 GW of coal-fired electricity capacity, with 89 GW under construction by the end of 2023. This indicates a focus on enhancing domestic coal output, supported by robust industrial activities. China's coal production in 2023 reached a record high of nearly 4.65 billion metric tons, while total coal imports stood at 386.3 million metric tons, compared to 257.2 million metric tons in 2022.
Looking ahead, China's coal imports in 2024 are expected to remain similar to 2023 levels due to economic challenges such as municipal debts and the property sector crisis. Meanwhile, the average price of China-delivered global 5,500 kcal/kg NAR coal on CFR basis declined from $178.06/mt in 2022 to $120.26/mt in 2023, with a further decrease to $108/mt as of February 21, 2024.
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