COVID-19 & Fossil Stimulus Spending: briefings for China, India, Indonesia & Poland

August 2020 as Working Draft Document v2

Executive Summary: 

China remains, by a significant margin, both the world’s top financier of coal investment and the world’s most prodigious coal consumer. China has showed signs of accelerating the construction timeline of up to 73GW of new coal-fired generation plants (to reach the 13th Five Year Plan self-imposed cap of 1100GW). Many of these plants are already economically uncompetitive compared to renewable energy alternatives.

Indian BAU public funding of coal is substantial. Support manifests in market subsidies, and in financing support for the operations and capital outlays of State-Owned Enterprises (SOEs). So far, public pandemic-induced stimulus measures have mainly focused on coal mining reform, coal import substitution, and large-scale capital injection into new coal enabling infrastructure (e.g. coal transport).

Polish BAU public support of coal mining and generation enables the continued operation of otherwise loss-making enterprises. Stimulus measures in the coming months are unlikely to provide significant support to coal mining, generation, transport, or the non-power coal sector. However, renewable and nuclear energy COVID-19 recovery narratives have both begun to emerge in Poland. Each are significant in potential size and impact.

Indonesia is the world’s fourth biggest coal producer and the biggest gas supplier in Southeast Asia. The Indonesian government is expected to fall far short on its national commitment to increase the renewable share of the energy mix by 2025. Recovery spending should leverage the nation’s vast renewable energy resource endowment to catalyse economic recovery in the short-term, establish new industry and jobs for the medium-term, and protect the climate in the long-term.