China energy plan sees coal-hauling rail line

Bloomberg

There’s nothing quite like a massive coal rail to demonstrate China’s loyalty to the dirtiest of fossil fuels.
Almost a decade in the making, the nearly $30 billion Haoji Railway will start around the end of this month and eventually haul as much as 200 million tons from key producing regions in the north to consumers in the south. That’s more than Japan uses in a year and could cut China’s domestic seaborne coal trade by 10 percent in the long run, Fenwei Energy Information Services Co forecasts.
In a world where governments and businesses are under pressure to leave the fossil fuel in the ground, the new rail is decidedly old-fashioned. China has pumped more money into renewable energy than any other country and is battling pollution by urging its population to burn gas instead.
Yet it continues to mine and burn half the world’s coal.
“Coal will remain a dominant source of power in the next 10 years, even though it’s being gradually replaced by new energy,” said Tian Miao, an analyst at Everbright Sun Hung Kai Co in Beijing.
One of the main reasons for building the nearly 2,000-kilometer (1,243-mile) long railway is to ease transportation bottlenecks in the domestic supply chain.
China is rich in coal — with its resource concentrated in the northern provinces of Inner Mongolia, Shanxi and Shaanxi — but the distribution is uneven.
The country is mainly served by trains hauling supply from the west to the east, including on the Daqin Railway.
Coal is delivered to ports such as Qinhuangdao and Caofeidian before getting dispatched on ships to users in the south.
To improve the efficiency of north-south transportation, China approved the construction of Haoji (previously named Menghua) in 2012, about the time its renewables growth accelerated. The country’s longest coal line will pass through Inner Mongolia, Shanxi, Shaanxi, Henan, Hubei, Hunan and Jiangxi, helping to save time and costs of moving supply over vast distances.
“The project was mulled at a time when coal was facing serious rail bottlenecks,” said Fenwei analyst Zeng Hao. “Demand for rail capacity has eased with the rise of renewable energy and environmental pressure. The rail line has more significance today as a strategic transportation channel.”