China's Coal Conundrum: Uncovering the Truth Behind Overseas Investments
Four years after a landmark pledge, President Xi Jinping's commitment to halt China's funding for overseas coal projects is under scrutiny. A recent report by the Centre for Research on Energy and Clean Air (CREA) and People of Asia for Climate Solutions (PACS) reveals a complex situation. While progress has been made, a new challenge emerges: the rise of privately-owned, off-grid coal projects for industrial purposes, especially in Indonesia and Africa.
But here's the catch: these projects are slipping through the cracks. The report categorizes projects as cancelled, pre-permitted, permitted, under construction, operational, and a new addition, 'mothballed'—plants that can restart anytime without formal permits. Despite cancellations, the total capacity of overseas coal projects remains significant, with 31.4 GW in the pipeline as of July 2025.
And this is where it gets controversial: while cancellations have increased, operational projects have grown by 4.1 GW in 2025, indicating a race to complete construction before regulations tighten. The report highlights that once construction begins, cancellation is unlikely, with 12.1 GW still under construction, mainly in Indonesia, India, Laos, Zimbabwe, and Zambia.
The impact of these projects is staggering. China's overseas captive coal ventures have contributed an estimated 1.5 billion tonnes of lifetime CO₂ emissions, nearly half of all emissions from current operations. The report warns that ongoing projects could add a potential 3.4 billion tonnes of CO₂ emissions upon completion.
To address this issue, CREA and PACS offer policy recommendations. They suggest explicitly including captive coal in the pledge, promoting renewable alternatives, and establishing a dedicated agency to enforce regulations. By redirecting financing towards renewable energy and supporting host countries' transition strategies, China can accelerate the phase-out of overseas coal projects.
However, the question remains: will China tighten its grip on these elusive off-grid projects? The report's findings suggest a need for more stringent measures and a comprehensive approach. What do you think? Is this a missed opportunity or a complex challenge that requires further international cooperation?
