China’s Anti-Pollution Drive Starts to Bite on Sales of Coal

Heavy Smog Arrives In Changde
Heavy smog the city of Changde, in Hunan, on January 15, 2015. Photographer: ChinaFotoPress/Getty Images

China’s push to ease its reliance on coal and the fossil-fuel pollution choking Beijing’s skies has started to hit sales of coal from the nation’s biggest supplier.

China Shenhua Energy Company Ltd.’s shipments dropped 24 percent in the first half of the year compared with a year ago, according to a statement released Monday. The company, which employs more than 90,000 people and has a market value of $59 billion, blamed falling consumption and “heightened pressure for environmental protection.”

President Xi Jinping’s drive to punish polluters “with an iron hand” is aimed at seeing greenhouse gas emissions peak around 2030 and removing the smog from the skyline of China’s biggest cities. The result is shifting more resources to renewable energy and starting to ratchet back on coal demand.

“To see that a lot is happening on coal in China right now is very encouraging and a positive signal in the right direction,” Niklas Hoehne, founding partner at the NewClimate Institute, said by phone. “The activities happening right now on coal in China have a significant impact. Since China is so big, it has an affect on global greenhouse gas emissions.”

China remains the biggest emitter of the pollution blamed for global warming, with the majority of its electricity generated from coal-fired plants, according to the International Energy Agency. The institution that advises industrial nations estimates China could cut that portion.

The coal consumption cuts may not be solely a product of environmental concerns.

“Coal is the one industry where China got worried about the corporate debt structure,” Colin Hamilton, global head of commodities research at Macquarie Group Ltd., said by phone. “Thermal coal consumption is down in our numbers at 4 percent year on year. Capacity has been pretty sticky, and there has been government pressure on Shenhua to keep production down.”

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