China’s carbon pledge sets path for deep energy changes

Beijing, 21 October (Argus) — China's transition to a low-carbon economy could require reducing coal's share of the energy mix to as little as 5pc by mid-century, while leaving little room for oil, according to the most aggressive scenarios drawn up by China's leading environmental institute. But even if that proves too ambitious, president Xi Jinping's pledge to achieve "carbon neutrality" by 2060 looks unachievable without major changes in energy policy.

A road map for the energy transition drawn up by Tsinghua's Institute of Climate Change and Sustainable Development, sets out four scenarios. The research was started after Beijing in 2017 set out a low-carbon strategy for 2050 and designed to support China's pledge under the UN Paris climate agreement for its CO2 emissions to peak by 2030.

The report, released by Tsinghua last week, has taken on extra significance after Xi's surprise announcement at the UN in September that China would become carbon neutral by 2060.

The scenarios cover two periods — from now to 2030, and then until 2050. In the ‘current policy' scenario, China is unable to meet its Paris commitments or its new 2060 pledge (see table).

China should follow a moderate but strengthened policy scenario under which carbon emissions peak before 2030, in line with current government policies and China's nationally determined contribution (NDC) target under the Paris deal. That would cut the share of coal in China's primary energy mix to 51pc by 2025 and 46pc by the end of this decade from 57pc now, while oil use declines only marginally, to 17pc.

The Tsinghua report also sets out two more ambitious scenarios following the end of the ‘transition period' in 2030. In the 2°C scenario, the share of non-fossil fuel energy surges to over 70pc of primary energy consumption and more than 90pc of electricity generation by 2050. This would require around 100 trillion yuan ($15 trillion) in investments in the energy system, equivalent to around 1.5-2pc of China's annual GDP.

An even more ambitious programme, in line with efforts to keep the global temperature increase to 1.5°C this century, would squeeze the combined share of oil, coal and gas to less than 14pc by 2050.

These targets will not win support from industrial or energy companies, an official at one of China's top state-owned oil companies says. Instead, projections for non-fossil fuels to account for around 50pc of the energy mix by 2050 — in line with Tsinghua's ‘strengthened policy' scenario — are more realistic, he says. Technologies such as carbon capture and storage (CCS) would play a big part in meeting the carbon targets, according to Tsinghua.

Any transition pathway requires a big increase in electricity's share of the total energy mix. Electricity currently accounts for only 25pc of end-use energy in China, but this will rise to 55pc by 2050, says He Jiankun, a professor at the Tsinghua institute. China must replace the use of thermal fuels in the industrial, transportation and construction sectors by electricity generated from non-fossil fuel sources, he says.

This would necessitate a wholesale transformation of China's coal-dominated power sector. Coal-fired power plants made up 51pc of total installed capacity and 62pc of total generation in 2019, official figures show. And the sector employs millions of workers, making any major restructuring a politically sensitive issue. Further details of China's energy strategy may emerge in its pending five-year plan for 2021-25, which is due to be discussed at a key government meeting next week.