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While China is progressing toward phasing out coal to meet climate goals, regions like Shanxi, where coal production and consumption are still increasing, face significant challenges that need to be addressed.
For these regions, early action supported by a strong policy framework can help ensure the transition is just and cost-effective, while also driving innovation and fostering economic diversification.
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The Just Energy Transition Index benchmarks progress of the transition from coal to clean energy, offering a quantitative framework to guide the development of tailored regional transition strategies.
Lessons learned from and international collaboration with other regions further along in their transition journey highlight areas where progress can be accelerated and provide valuable insights, resources and opportunities.
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A comprehensive policy framework, effective coordination and funding are vital for inclusive growth in Shanxi and other coal regions.
Prioritising policies that integrate sustainable economic development and social justice, such as investing in clean technologies and establishing a fund for coal community transformation, can drive structural change. Expanding China’s national leadership group on carbon peaking and neutrality to include human resource authorities and public, private and civil society stakeholders would enhance coordination and help ensure equitable outcomes.
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Chinese state-owned coal enterprises (SOEs) are key to driving regional just transitions.
Strategic government intervention can help align SOEs’ investment priorities and unlock their full potential to support the transition. Central and regional governments can facilitate collaboration with these resource-rich and influential SOEs to drive diversification and prioritise job creation in non-coal or even non-energy sectors. Local governments, in turn, can help by identifying market demand trends and opportunities for development, enabling SOEs to reduce coal dependency and advance carbon neutrality goals.
A just transition for coal regions: insights from Shanxi and Europe
Just Energy Transition Index, employment and economic diversification
Preface
Coal has historically been a significant energy source in both Europe and China. However, with ambitious climate goals on the horizon, the ongoing shift away from coal presents a unique opportunity to innovate, restructure energy systems and create sustainable growth. Central to this process is the concept of a "just transition", which ensures that the move to a low-carbon economy is fair, addressing the needs of workers, communities and industries impacted by the change.
This report was developed by Agora Energy Transition China, in collaboration with Agora Energiewende, Energy Foundation China and Shanxi Coshare Innovation Institute of Energy and Environment. Through an in-depth analysis of Shanxi, China’s largest coal-producing region, the report explores its progress toward a just transition. A new Just Energy Transition Index (JETI) forms the basis for the analysis, which compares Shanxi’s transition progress with that of five coal regions in Europe and offers actionable insights into supporting coal workers and communities, with a focus on employment and economic diversification strategies. Drawing on lessons learned from other countries and regions, the report highlights pathways for coal-dependent regions like Shanxi province to transition to clean energy while fostering economic resilience and social equity.
The report is available in Chinese, with an English version of the Executive Summary.
