Closing the Captive Coal Loophole: How China Can Fulfill Its Global Clean Energy Ambitions

Five years after Chinese President Xi Jinping pledged at the 2021 UN General Assembly that China would stop building new coal-fired power projects abroad and step up support for green energy, significant progress has been made. However, key implementation gaps remain. 

Early in 2020, ClientEarth, alongside the Belt and Road International Green Development Coalition (BRIGC) and supported by the National Climate Strategy Center (NCSC), submitted a key Recommendations Report to top Chinese state leaders advocating for an end to overseas coal. As a founding member of BRIGC, ClientEarth has actively tracked the pledge's progress, including reviewing the Center for Research on Energy and Clean Air's (CREA) latest five-year review.

China's overseas renewable energy footprint is expanding rapidly. According to CREA, 69.4 GW of China-linked renewable energy projects are operational overseas as of July 2026, generating 172 TWh annually and avoiding an estimated 1.9 billion tonnes of lifetime CO₂ emissions. In countries like Brazil, Tanzania, and the UAE, electricity generated from operational China-linked renewables already exceeds the potential generation of cancelled coal plants.

An additional 100.5 GW of renewable projects are under construction, with 280.8 GW in pre-construction. Once online, projects currently under construction will avoid an additional 3.3 billion tonnes of lifetime emissions and bring total annual overseas renewable generation to 246 TWh.

China has made substantial progress on its 2021 commitment to stop building new coal power projects abroad. Since the pledge, 67% of planned coal power capacity has been cancelled—totaling 61.5 GW across 129 units—avoiding an estimated 6.4 billion tonnes of lifetime CO₂ emissions. Indonesia, Vietnam, and Bangladesh lead globally in cancelled capacity.

Despite the progress, the ban has yet to reach full implementation. Over the past year, 3.3 GW of China-linked coal capacity entered construction overall, while 20.5 GW remains in planning without official cancellation, together representing roughly 2.8 billion tonnes of potential lifetime CO₂ emissions.

The primary loophole undermining the pledge is off-grid captive coal power plants, mostly funded by private Chinese companies to power industrial parks and mineral processing (such as nickel and aluminium) in Indonesia. Captive coal accounts for 60% of all post-2021 operational units (14.2 GW) and 42% of units currently under construction.

To demonstrate global climate leadership, China should work with partner countries to: 

1. Cancel or repurpose all unbuilt overseas coal projects, while developing retirement and renewable replacement pathways for operational plants.
2. Address the captive coal power loophole by enforcing the pledge on captive projects, applying China's "using green to make green" paradigm, integrating renewables into existing industrial parks, and developing new zero-carbon industrial parks
3. Strengthen governance by designating a specific high-level body (such as the Overseas State-owned Assets Management Bureau) to oversee compliance across contractors and private firms while increasing transparency.
4. Maximise renewable energy opportunities to support climate goals, electrification, energy security, and the global clean energy transition.

By strengthening oversight and closing these remaining loopholes, China can deepen climate cooperation and demonstrate true global climate leadership under its 15th Five-Year Plan. ClientEarth remains committed to working with Chinese and international partners to ensure outbound investments drive a clean, just energy transition globally.