Imagine a world where a global superpower vows to dial back its support for dirty energy projects abroad, promising cleaner skies and a healthier planet for all. But here's the twist: four years into that bold commitment, are we truly on the path to progress, or is a sneaky loophole undermining the whole effort? Let's dive into the latest insights from the Centre for Research on Energy and Clean Air (CREA) and the People of Asia for Climate Solutions (PACS) on China's overseas coal power ban, revealing both triumphs and troubling trends that could reshape how we think about international climate promises.
It's been over four years since Chinese President Xi Jinping made his groundbreaking announcement to halt funding for overseas coal initiatives, a move hailed worldwide as a step toward curbing climate change. Yet, as we approach mid-2025, this annual review paints a mixed picture: some victories are clear, but a growing worry emerges with the proliferation of privately financed, off-grid coal plants designed specifically for industrial purposes. These so-called captive projects, often tucked away in places like Indonesia and parts of Africa, cater to factories and mines without connecting to the broader power grid, making them harder to scrutinize. And this is the part most people miss: while many coal facilities have been scrapped, others are pushing ahead, exposing persistent cracks in how the ban is enforced.
To make sense of this for everyone, think of captive coal as plants built just for a single company's needs—say, powering a steel mill or cement factory—rather than supplying electricity to homes and businesses. They're off-grid, meaning they're not reliant on national utilities, which creates a gray area in regulations. The assessment breaks down projects into key stages: those cancelled outright, those in pre-permitted limbo, fully permitted ones, plants under active construction, and even operational sites. This year, they've added a new category for 'mothballed' facilities—plants that are dormant but could be restarted anytime without needing fresh permissions, like a sleeping giant ready to awaken.
As of July 2025, the total capacity of coal projects in China's overseas pipeline has shrunk to just 31.4 gigawatts (GW), a notable drop from nearly 50 GW back in 2024. Cancellations picked up steam in 2025, with 16.4 GW of new capacity axed after a lull the year before. Since Xi's 2021 pledge, a whopping 59.3 GW of projects have been called off, sparing the planet from about 6.1 billion tonnes of carbon dioxide (CO₂) emissions over their lifetimes. For context, that's like preventing the emissions from millions of cars driving around the globe indefinitely—imagine the cleaner air and reduced global warming that could mean for future generations.
But here's where it gets controversial: despite these wins, operational coal plants expanded by 4.1 GW in 2025 alone. Most of these were already in the pipeline or nearing completion by 2024, showing that once construction kicks in, stopping a project becomes incredibly tough. Critics might argue this highlights a flaw in timing—perhaps the pledge came too late for many sites already underway. The construction pace has eased this year, but a solid 12.1 GW of capacity is still being built across 14 projects, predominantly captive facilities in Indonesia, India, Laos, Zimbabwe, and Zambia. These are privately owned by Chinese firms and serve niche industrial demands, operating outside the main grid. This loophole is casting a long shadow over China's progress, potentially allowing coal to sneak through the cracks. For deeper dives, check the report's annex with on-the-ground studies.
To grasp the environmental stakes, China's existing overseas captive coal ventures have already pumped out around 1.5 billion tonnes of CO₂ over their lifetimes—that's nearly half of all emissions from currently active overseas plants. And the ones under construction? They could unleash another 3.4 billion tonnes if finished. For beginners, picture this: each tonne of CO₂ is like adding heat-trapping gas to the atmosphere, accelerating climate disasters like wildfires, floods, and extreme weather. It's a sobering reminder that unchecked coal can erase environmental gains faster than we realize.
Now, turning to solutions, CREA and PACS offer actionable advice to speed up Xi's vision of phasing out China-backed coal abroad. First, the pledge needs to explicitly include captive coal projects—no more gray areas. Approvals and funding should demand alternatives like renewables or hybrid systems, cutting-edge technology (often called best available technology or BAT), strict environmental checks, and firm timelines for plant shutdowns. Second, shift priorities by funneling money into clean energy: think vast solar farms, windy turbines, hydroelectric dams, energy storage solutions, and upgrading grids. In nations with early-stage projects, offer hands-on help with planning, securing land and power lines, and reforming energy markets to fast-track renewables and ditch coal reliance. Third, bolster support for countries transitioning away from fossil fuels—China and global allies could provide expert guidance and funding for national plans that keep economies strong and jobs intact during the shift. Finally, and this might spark debate, establish a specialized agency to oversee everything. Since 2021, no such body has been named, leading to inconsistent enforcement. A dedicated coordinator with real authority could ensure accountability and step in against shady or unlawful activities.
So, what do you think? Is this loophole in captive coal a deliberate oversight, or just an unintended consequence of global energy politics? Do you believe China's pledge is enough, or should international pressure ramp up? Share your views in the comments—let's discuss how we can close these gaps for a greener future!
