China’s Energy Game Plan Features a Giant Coal-Hauling Rail Line

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% 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.