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UNITED NATIONS — Five years after President Xi Jinping promised to stop financing overseas coal plants, China has scrapped most of the projects it once had on the table abroad. But the global coal phase-down is still moving far too slowly, and quiet gaps in Beijing’s pledge continue to allow new coal capacity to move forward.
As of Wednesday, Sept. 24, 2025, world leaders are gathered in New York for the U.N. General Assembly. Xi is absent from this week’s high-level debate, meeting U.S. President Donald Trump instead. Vice President Han Zheng is expected to address the assembly on Saturday, giving China’s 2021 coal pledge fresh relevance in the middle of climate week.
The timing matters because a new report released this week shows both progress and unfinished business.
The report, published by the Centre for Research on Energy and Clean Air, or CREA, and the People of Asia for Climate Solutions, or PACS, found that China has canceled 67% of the coal power capacity it had planned to build overseas back in 2021.
That means Beijing has walked away from roughly 61.5 gigawatts of coal projects. The authors estimate this will avoid about 6.4 billion tons of carbon dioxide over the lifetime of those plants.
That is a meaningful contribution from a country that was once the world’s largest overseas coal financier. When Xi announced the moratorium in 2021, it was the first time Beijing had extended its climate ambition beyond its own borders, according to Li Shuo, director of the Asia Society Policy Institute’s China Climate Hub.
“This marked the first time Beijing was willing to extend its emerging climate ambition beyond its borders,” Li said.
The canceled capacity is a bright spot in a global picture that has turned darker since the U.N. climate agency declared coal had been “consigned to history” after nearly 200 countries agreed to phase it down.
Two energy shocks — first from the Russia-Ukraine war, then from the Iran war and the closure of the Strait of Hormuz — forced many countries to scramble for reliable supplies. Southeast Asia, heavily dependent on fossil fuel imports from the Middle East, was hit early and hard. Several governments turned to coal simply to keep the lights on.
That reality has complicated the global energy transition and thrust the question of coal back into the center of climate diplomacy.
China’s position is difficult to ignore. It remains the world’s largest annual emitter of carbon dioxide, although the United States has emitted more carbon over the course of history.
Domestically, China’s coal use has slowly started to decline, but the country is still building more new coal infrastructure than anyone else. Coal has been a defining part of China’s industrial story for decades — in 1979, Americans arriving in Chinese cities found air that smelled sharply of burning coal, and soon saw the residue on clothes and skin.
Yet the country has also become the world’s largest producer of solar panels and wind turbines, and it dominates the global electric vehicle market. Beijing’s clean-energy industrial strength gives it outsized influence over how fast Asia and Africa move away from fossil fuels.
“The rapid expansion of clean energy, both in China and increasingly abroad, since the announcement of the coal moratorium should encourage Beijing to further prioritize renewable energy in its international energy strategy,” Li said.
The report’s authors also point out that canceling large amounts of coal capacity sends a signal to the market: Chinese institutions are no longer willing to bankroll every coal plant that asks for backing.
The biggest caveat, experts say, is that Beijing’s pledge never covered all Chinese money.
Syahdiva Moezbar, an industry analyst with CREA in Jakarta, said China has “somewhat delivered” on the promise, but “coal expansion hasn’t stopped because of the nature of the pledge itself, which still allows private Chinese companies to invest overseas.”
Indonesia is now the clearest example. Chinese-backed firms have been building “captive coal” plants — on-site power stations that supply energy directly to heavy industry, not to the national grid. Many of these plants serve nickel and aluminum smelters, part of a broader Chinese investment push into Southeast Asia’s metal supply chains.
According to the new report, Indonesia remains the top destination for China-linked coal investment, with 17.1 gigawatts of coal capacity still in the pipeline. Vietnam and Pakistan are distant second and third, each with less than 4 gigawatts under development.
Captive coal is especially hard to track because it is not part of national power planning. It can expand without being reflected in a country’s official electricity mix, and it is often justified as a fast solution for energy-intensive factories.
Wang Xiaojun, executive director of PACS, said there is a real risk that commercial interests will override Beijing’s climate messaging.
“When commercial interests take precedence over China’s broader green development commitments and the world’s climate security, the benefits of China’s remarkable clean-energy leadership are undermined,” Wang said.
The debate over Chinese coal finance is playing out against a deeper regional shift.
Southeast Asia is often described as China’s backyard. It is a major receiver of Chinese investment and infrastructure money, and it accounts for nearly 20% of global energy demand growth through 2035, according to the International Energy Agency.
The Iran war’s shock to Middle East oil and gas shipments pushed the Philippines, Thailand, Indonesia, and Vietnam to ramp up coal use. That emergency response has eased in part because governments also ramped up rooftop solar, electric vehicle incentives, and even nuclear exploration.
Still, coal remains central to the region’s energy mix. Renewable energy is expanding, but not fast enough to replace the region’s dependence on cheap thermal power.
Li Shuo warned that Southeast Asia’s desire for energy security could trigger a new wave of coal building.
“The growing desire among countries in Southeast Asia to secure reliable energy supplies could bring about another round of coal fever,” he said, describing the possibility as a test of Beijing’s commitment to its moratorium.
With Xi absent, all eyes will be on Han Zheng’s Saturday speech. The question is not whether he will repeat the 2021 pledge — most observers expect he will — but whether Beijing offers any new framework for limiting private Chinese investment in coal.
Analysts say the energy transition in Asia is a “two-party tango.” China alone cannot decide the region’s energy path; partner governments must also set policies that respect climate goals. Li put it simply: “This saga is far from over.”
The new CREA and PACS data gives climate advocates a useful benchmark. China has kept much of its promised distance from overseas coal. But as long as private capital and industrial-scale captive plants remain outside the scope of the pledge, the door to further coal expansion is not fully closed.
That mixed message is likely to define the conversation around China at this year’s U.N. gathering — and for years to come.
