Reproduced from IEA; Chart: Axios Visuals

A new International Energy Agency report highlights one big challenge facing China as the world's largest CO2 emitter begins implementing its national emissions trading system: The country's coal fleet is very young.

Why it matters: IEA's analysis this week warns that while newer facilities are far more efficient than older models, the average plant age "potentially locks in large amounts of CO2 emissions" for decades.

  • "More than 88% of CO2 emissions from coal-fired power plants in 2018 came from plants less than 20 years old," they find.

Threat level: The policy recommendations warn that the current design of the trading system’s allotment of emissions permits could hinder its effectiveness (in part due to large surpluses). It also says that eventual expansion of the system beyond coal- and gas-fired power will be important.

The big picture: "Entities can receive surplus allowances for their supercritical and ultra-supercritical [coal] plants, but currently receive no surplus by investing in low-carbon power technologies such as renewables," IEA notes.

  • "This situation may even have the perverse outcome of making the most efficient coal power plant more economically competitive than renewables."

Go deeper

Bryan Walsh, author of Future
Sep 23, 2020 - Technology

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