China eases power crunch with boost to coal production

A man crosses a road at an intersection in Beijing on October 28, 2021. Jade Gao / AFP

The world's biggest coal importer has battled widespread power cuts in recent months that have disrupted supply chains, due to strict emissions targets and record prices for the fossil fuel.

But the crisis is now winding down thanks to a boost in domestic coal output, according to a statement from China's top economic planning body late Sunday.

The National Development and Reform Commission said average daily coal production has risen to above 11.5 million tonnes since the middle of October, up by 1.1 million tonnes compared with the end of September.

The production surge comes as world leaders -- but not Chinese president Xi Jinping -- convene in Glasgow for COP26 talks to secure more ambitious global greenhouse gas emissions.

Xi, whose country is the world's largest emitter of planet-heating gases, has instead submitted a written statement to the summit.

In recent months, several Chinese factories were forced to halt operations due to power outages, raising concern about global supply chains.

The squeeze had also been exacerbated by Beijing's zero-tolerance Covid-19 policy that saw it all but close its borders to the outside world, hindering shipments of raw materials from overseas.

A trade tiff with Australia also heightened the drop in coal imports.

But at one point in late October daily output hit 11.72 million tonnes, a record in recent years.

Spot prices for the fuel are also "falling fast" with the main contract for thermal coal halving to 970 yuan per tonne over the previous eight days.

"Levels of coal storage ... have also risen rapidly with the gradual improvement of the supply-demand situation," the agency said.

China generates about 60 percent of its energy from burning coal.

Beijing submitted a renewed climate plan to the United Nations days before the COP26 climate summit, confirming its goal to achieve carbon neutrality before 2060 and slash its emissions intensity -- the amount of emissions per unit of economic output -- by more than 65 percent.