Daily on Energy: China’s coal use is soaring

Provincial governments in China greenlighted 46 gigawatts of new coal power plants in 2020, more than the previous three years combined, the environmental group Greenpeace reported today. New permits for coal ballooned last year after China eased its pandemic lockdowns and returned quickly to economic activity.

China generated 53% of the world’s total coal power in 2020 (compared to 44% in 2015), making it the only G-20 nation to significantly increase its coal-fired generation last year, according to a separate report yesterday from Ember, a London-based research group. Despite building hundreds of wind and solar plants, China’s power demand growth continued to outstrip new clean electricity, driving up coal use. Only a third of China’s increase in electricity demand was met from gains in wind and solar generation, Ember determined.

The reports on China’s continued coal use come after the country early this month released an underwhelming five-year plan that provided no evidence it plans to reduce fossil fuel consumption soon to get it on a path to reach its long-term target of carbon-neutrality by 2060.

The plan contained no absolute cap on carbon emissions by 2025, only a vow to reduce emissions intensity by 18%, a measure of energy use and emissions relative to GDP.

“The short-sighted behavior of a large number of coal-fired power plants approved by various provinces in 2020 is contrary to China’s mid- to long-term strategic needs for green and low-carbon development,” said Zhang Kai, one of the authors of the Greenpeace report on the growing coal power plant approvals this year.

The Biden administration is surely hopeful China will bring something new to the table at next month’s virtual climate summit, if Xi accepts the invitation and joins other world leaders from top emitting countries. But the new datapoints suggest China isn’t ready to offer serious proposals, such as banning new coal projects.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

FREE AT LAST: The container ship that had an extended stay in the Suez Canal is now free, sending oil prices down along with it.

The 200,000-ton behemoth known as Ever Given was dislodged this morning, hours after officials said they made some progress.

The Suez Canal is a major route for oil flows from the Middle East to Europe and the U.S., and the blockade prevented some tankers from moving through, creating pressure on supply.

“While today’s development in the Suez Canal is promising for the return of oil shipments through the water conduit, due to the large number of vessels that have accumulated, it could still be days or weeks until the canal is fully back to normal operations,” said Louise Dickson, oil markets analyst at Rystad Energy.

BIDEN’S TWO-STEP ECONOMIC RECOVERY STRATEGY: The Biden administration will split up its economic recovery plan into two parts, the White House confirmed yesterday, with the president planning to unveil the infrastructure component first on Wednesday in Pittsburgh.

White House press secretary Jen Psaki, in an interview on Fox News Sunday, said the president is willing to hear Republicans’ ideas on the infrastructure package, which is expected to include major investments in clean energy to address climate change.

Republicans will push for the package to be narrowly focused on traditional transportation like roads and bridges, so it’s hard to see the GOP getting on board.

The second component of the plan, to be introduced in April, will include measures related to healthcare, child care, and addressing the high rate of women who have left the workforce since the start of the coronavirus pandemic.

NORD STREAM 2 POLITICS: Secretary of State Antony Blinken yesterday seemed to lay the groundwork for acknowledging Russia’s nearly completed natural gas pipeline will be built, which has always looked like the inevitable outcome despite the administration sharpening its rhetoric of late.

When asked by CNN’s Dana Bash if the administration can stop the project, he replied: “Well, ultimately, that’s up to those who are trying to build the pipeline and complete it. We just wanted to make sure that our position, our opposition to the pipeline, was well understood.”

Blinken’s latest statement comes after he warned companies earlier this month to “immediately abandon” the project or risk U.S. sanctions, in a statement designed to appease Republican Sen. Ted Cruz, who was holding up two national security nominees.

Signal to Germany: But the Biden administration is being careful against pushing too hard in order to rehabilitate relations with Europe and Germany to present a united front against Russia.

Blinken yesterday said “the fact that we have a difference over this pipeline is not going to change that” Germany is “one our closest allies and partners anywhere in the world.”

SAUDI GREEN INITIATIVE: Saudi Arabia, the world’s top oil exporter, unveiled a plan to address climate change Saturday, vowing to planting 10 billion trees to absorb carbon and make half of the country’s power from renewable sources by 2030.

“As a leading global oil producer, the kingdom fully recognizes its share of responsibility in advancing the fight against the climate crisis. Just as the kingdom underpinned energy markets during the oil and gas era, it is going to become a global leader in forging a greener world,” said Mohammed bin Salman, Saudi Arabia’s crown prince, according to a statement issued by the Saudi Press Agency.

Saudi Arabia is contributing to a plan with other Arab states, called the “Middle East Green Initiative,” to plant a total of 50 billion trees, the world’s largest reforestation program. The new promises are part of Saudi’s “Vision 2030” plan to diversify the kingdom’s oil-reliant economy.

EPRI CEO CAUTIONS BIDEN TO FOCUS ON 2050, NOT 2035: Arshad Mansoor, CEO of the Electric Power Research Institute, is encouraging the Biden administration to broaden its view so it doesn’t compromise the end goal, reaching net-zero emissions across the economy by midcentury, by focusing too rigidly on a granular promise made on the campaign trail.

This was Mansoor’s message while in town meeting with members of the Biden administration’s climate team last week. One of the main questions he said he received from government officials is how to do the math to get down to net-zero emissions.

“Greenhouse gas doesn’t discriminate where it’s coming from. So if our goal is economywide reduction, let’s make sure we’re looking at all three sectors in a synergistic way,” Mansoor told Abby in a recent interview.

Mansoor said the most important climate legacy Biden can leave is ramping up electrification of transportation, allowing that sector to start making deeper emissions cuts this decade.

Electrifying transportation is “the biggest change that if we don’t see this decade, we will not be even close to our ambitious goal,” he added.

More from the interview in Abby’s story posted over the weekend.

WHITE HOUSE UNVEILS ENVIRONMENTAL JUSTICE ADVISORY COUNCIL: The White House Environmental Justice Advisory Council, established by Biden in his climate change executive order, will include prominent activists such as Robert Bullard, often referred to as the “father of environmental justice”; Catherine Flowers, founder of the Center for Rural Enterprise and Environmental Justice and a member of Biden’s campaign climate task force; and Peggy Shepard, co-founder and executive director of WE ACT for Environmental Justice.

See the full list of members announced by the White House this morning here. The council will hold its first meeting tomorrow, and its work will be funded by the EPA.

STATE DEPARTMENT KICKS OFF PROCESS TO RATIFY COOLANT DEAL: The State Department sent the White House Friday a so-called “transmittal package” seeking the Senate’s ratification of the Kigali Amendment to limit potent greenhouse gas coolants known as HFCs, a State Department spokesperson told Abby.

The transmittal package is the first step toward the U.S. potentially ratifying the Kigali deal, which was negotiated back in 2016 by the Obama administration. The Trump administration largely ignored the agreement, despite intense lobbying efforts from the appliance and chemical industries to get it to support the deal.

Biden, in his climate change executive order, had set a 60-day deadline for the State Department to prepare the transmittal package. The White House must be the one to send the transmittal package to the Senate, however, and the administration hasn’t said what its next steps will be.

Congressional dynamics: It’s possible the Kigali deal could earn some Republican support. More than a dozen GOP senators had previously urged the Trump administration to back the agreement, and at least some of those senators have said they still support it.

Congress also approved bipartisan legislation as part of last year’s spending bill that authorizes the EPA to issue regulations to put the U.S. on track to comply with the Kigali agreement’s targets.

BLACKROCK AND VANGUARD JOIN NET-ZERO INITIATIVE: The two major U.S. asset managers were among 43 global firms representing more than $22.8 trillion in assets that announced this morning they would join the Net Zero Asset Managers initiative and set new climate targets consistent with the Paris climate agreement.

Signatories to the initiative agree to set targets to reach net-zero financed emissions by 2050, as well as establish interim targets for 2030 within a year of joining the initiative. In total, 73 global asset managers have signed onto the initiative.

BlackRock unveiled its intent to align with a net-zero trajectory earlier this year, in CEO Larry Fink’s annual letter to clients. Vanguard, however, has been criticized for not addressing the financial risks from climate change, and its joining of this initiative represents its first major foray into the climate space.

“Climate change represents a long-term, material risk to our investors’ portfolios,” said Vanguard CEO Tim Buckley in a statement. “As a steward of our clients’ assets, we recognize the crucial role we and others play in driving real progress on climate risk over time.”

The Net Zero Asset Managers initiative is run by six investor networks: the Asia Investor Group on Climate Change, CDP, Ceres, the Investor Group on Climate Change, the Institutional Investors Group on Climate Change, and Principles for Responsible Investment.

TOOMEY SLAMS SAN FRANCISCO FED FOR ‘POLITICALLY-CHARGED’ RESEARCH: Sen. Pat Toomey, the top Republican on the Senate Banking Committee, is raising alarm at recent research efforts from the Federal Reserve Bank of San Francisco exploring the financial risks from climate change, as well as other issues, such as racial justice, that he argues go beyond its jurisdiction.

“The Federal Reserve may pursue mission creep or welcome itself to political capture. But such activities are inconsistent with its statutory responsibilities,” Toomey wrote in a letter this morning to Mary Daly, president and CEO of the San Francisco Fed.

Toomey is requesting a briefing from the San Francisco Fed no later than the week of April 12, and he is seeking memos and emails describing why the San Francisco Fed has decided to increase its focus on climate change and racial justice.

MASSACHUSETTS ENACTS BIG CLIMATE BILL: Gov. Charlie Baker, after vetoing a first version and back-and-forth with lawmakers on a second, signed a sweeping climate bill Friday to codify into law a goal to slash the state’s greenhouse gas emissions to net-zero by 2050.

Baker, a Republican, had vetoed the first version of the bill, raising concerns it would be too costly and increase energy prices for customers. Lawmakers accepted most of the revisions to the bill that Baker proposed, but they refused to budge on a provision requiring the state to cut emissions 50% below 1990 levels by 2030, according to the Boston Globe.

Under the bill, the Massachusetts secretary of energy and environmental affairs will set emissions limits for the state every five years, as well as individual limits for the power, transportation, industrial, natural gas distribution, and commercial and residential heating and cooling sectors. Those sector limits won’t be legally binding, though, if the state meets its overall emissions limit by 2030, a change from the original bill, the Globe said.

In addition to setting overall emissions targets, the climate bill bolsters protections for “environmental justice” regions, authorizes a new voluntary energy efficiency program for municipal buildings, and clears the way for the state to procure more offshore wind.

OIL STATE GOP SENATORS ASK EPA FOR RFS RELIEF: More than a dozen Republican senators, led by Toomey, are calling on EPA Administrator Michael Regan to waive or significantly reduce biofuels blending requirements under the Renewable Fuel Standard given the economic troubles many refineries have faced due to the pandemic.

“If relief is not provided in a timely manner, more refineries will be forced to shut down and place thousands of workers on the unemployment rolls just as the economy is beginning to roar back,” the senators wrote in a letter sent last week. The senators argue that waiving the requirements wouldn’t harm the biofuels industry because the renewable fuels for the 2020 compliance year “have already been produced and blended.”

Regan and the rest of Biden’s team face a tough challenge navigating the bitter feud between oil refiners and biofuels producers, especially since the Trump administration punted on issuing a rule setting the latest blending volumes for 2021.

The Biden administration has already said it will side with biofuels producers on one key issue, however — backing a federal appeals court ruling that sharply limits the EPA’s ability to exempt small oil refineries from the RFS requirements. The Supreme Court hears arguments next month in a challenge brought by several oil refiners to overturn that ruling.

MOVERS AND SHAKERS: Kiera O’Brien, founder and president of Young Conservatives for Carbon Dividends, is leaving the group to join the office of Republican Sen. Dan Sullivan of Alaska to work on energy and climate policy. George Behrakis will replace O’Brien as president.

Another one: Erik Olson, a climate and energy analyst at the Breakthrough Institute, is joining the Virginia Division of Energy as an emerging energy technology analyst. Olson will be assisting the state in meeting its 2045 power sector decarbonization target.

The Rundown

Bloomberg Biden team boosts effort to shield US power grid from hackers

New York Times How to clean up steel? Bacteria, hydrogen, and a lot of cash

Politico The ‘green energy’ that might be ruining the planet

Washington Post Block by block, he aims to fight injustice and save the planet

Politico Biden mulls giving farmers billions to fight climate change. Even farmers are unsure about the plan.

Calendar

WEDNESDAY | MARCH 31

12 p.m. CRES Forum will hold a virtual event titled “Driving Innovation: How can private and public sectors speed EV deployment.”