China cuts use of dirty coal by 40 percent, consultancy Wood Mackenzie says

Key Points
  • China's use of dirty coal has dropped 40 percent from 2012-2017, Wood Mackenzie said
  • That's due to government efforts to clean up air pollution, it said
  • Factories using inefficient boilers will likely switch to bigger, cleaner ones, rather than using more expensive gas, it said
Chinese residents wear masks for protection as smoke billows from a coal fired power plant in Shanxi, China.
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The Chinese government's efforts to clean up air quality are bearing fruit as use of dirty coal has likely dropped 40 percent over the last five years, said Wood Mackenzie.

According to data from the consultancy, the use of low-quality or dirty coal, known as sanmei, will fall to 469 million tons this year from 774 million tons in 2012. Over 80 percent, or 650 million tons of this coal, was used in the industrial sector in 2012.

The low-quality coal is mainly used in heating.

The reduction comes after the Chinese government steps since 2013 to reduce air pollution, a social and political hot potato.

The reforms included moves to close down inefficient and small-scale boilers and to switch to gas or electricity-powered heating for residences.

Wood Mackenzie projected the use of industrial sanmei would fall to 191 million tons by 2025, from 650 million tons in 2012. Its use will then fall to 100 million tons by 2035, Wood Mackenzie forecast.

The decline of Sanmei was further aided by China's transition toward a services-oriented economy, from a manufacturing-oriented one, leading to reduced usage of thermal coal in the industrial sector, added the consultancy.

"As a priority of the government's efforts to reduce sanmei use, many small, inefficient factories have been closed," added Wood Mackenzie in its note released on Tuesday.

In the capital city of Beijing, more than 1,300 factories were closed between 2013 and 2016, and another 500 are expected to be shut this year, it said.

Most of these factories, however, will not be switching to gas, which can cost three times as much as coal, it said. They will switch to larger, more efficient, cleaner coal boilers or power from public thermal plants, said the consultancy.