Format: Documentation
Date: 24 May 2022

Promoting regional coal just transitions in China, Europe and beyond

Europe-China dialogues on a just coal transition in 2021

#Coal phase-out

Preface
Key findings

Preface

Largely driven by the unexpectedly strong domestic demand for power and surging industrial activities, China’s coal consumption increased substantially by 4.6 percent in 2021, marking the highest record of annual growth since 2012.

The pandemic and its aftermath, together with the current geopolitical conflicts in Europe, have added more uncertainties to the energy transition agendas of China and the world. In particular, this may mean that coal-producing regions are seen as a source of energy security, which would potentially lead to delays in their transformation process. Therefore, more concerted endeavors are called on to move the just transition agenda forward for coal regions and coal-sector employees.

In 2021, Agora Energiewende and Energy Foundation China (EFC) co-organized three dialogues on a just transition for China’s coal-reliant regions. The series of dialogues discussed the challenges faced by coal-based corporations and by the communities affected by the coal transition in major coal-producing and coal-consuming regions, and proposed possible solutions that could help mitigate transition impacts in both China and Europe, along with wider policy relevant implications for other parts of the world.

This paper summarizes the key findings from the dialogues and identifies the differences and similarities of the challenges faced by the coal regions in China and Europe. The conclusions from this paper will support further in-depth research and bilateral conversations on promoting coal just transitions in China, Europe and beyond.

Key findings

Involving key stakeholders in coal phase-out discussions is essential for the success of just transition.

The transition out of coal involves a wide range of industries from upstream producers to downstream supply chains, together with their workers and investors. A policy package should cover all relevant key sectors and stakeholders of the coal value chain from the national to the regional level, aiming to distribute benefits and burdens as equally and positively as possible.
Appropriate balance between top-down and bottom-up approaches is a prerequisite for diversifying the economies of coal regions.

Regional governments are best positioned to understand local resources, capacities, and preferences. Therefore, more decentralized decision making coupled with far-sighted guidance from the central/federal government is key to stimulating new economic diversification and momentum in coal regions.
Financial and policy tools are key to facilitating profound transformation.

Compared with administrative orders or direct subsidies, market-oriented instruments have often proved to be more effective in delivering a just transition.