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Carbon Brief handpicks and explains the most important climate and energy stories from China over the past fortnight. Subscribe for free here.
Key developments
China needs record drop in CO2 emissions to meet 2025 target
RECORD FALL NEEDED: New analysis for Carbon Brief revealed that China’s carbon dioxide (CO2) emissions increased by 12% between 2020 and 2023, due to a “highly energy- and carbon-intensive response” to the economic slowdown during the Covid-19 pandemic. Total energy consumption grew 5.7% in 2023, “the first time since at least 2005 that energy demand has grown faster than GDP”, while CO2 emissions grew “at an average of 3.8% per year in 2021-23, up from 0.9% a year in 2016-20”, despite slowing economic growth. As a result, China’s carbon intensity – its emissions per unit of GDP – “has only fallen 5% in the 14th five-year plan period”, and CO2 emissions “would need to fall by 4-6% by 2025” to meet the carbon intensity target of 18% set in the 14th five-year plan.
OFF-TARGET: China is also “at risk” of failing to meet other key climate goals. Despite pledges to “strictly limit” coal demand growth and “strictly control” new coal power capacity, both “coal consumption and new coal power projects” accelerated “sharply” from 2020 to 2023. The share of China’s energy demand met by non-fossil sources “has increased by 1.8 percentage points from 2020 to 2023, against a target of 4.1 points by 2025”. The analysis concluded that government pressure to hit these targets – many of which are included in China’s most recent international climate pledge – means it is “more likely that China’s CO2 emissions will peak before 2025”.
OFFICIAL STATS: The head of the national energy administration (NEA), Zhang Jianhua, recently wrote in an article posted on the NEA’s official WeChat account that China’s annual growth of energy consumption between 2021 and 2023 was 1.8 times higher than annual energy consumption growth from 2016 to 2020 – and equalled the total annual energy consumption of the UK. He added that “solid growth” is expected for the foreseeable future, which will make it “more difficult to coordinate energy security guarantees and the low-carbon transformation”.
China plans ‘comprehensive green transformation’
‘GREEN TRANSFORMATION’: State news agency Xinhua reported that President Xi Jinping hosted a meeting of the central commission for deepening reform (CCDR, see below), during which policymakers passed the “opinions on promoting comprehensive green transformation of socioeconomic development”. The full text of the opinions has not yet been released. Xi also stated at the meeting that achieving this transformation “is the foundational policy to resolve problems around resources, the environment and ecology”, the outlet said. An Anhui News editorial republished by the state-run China Daily shortly after the meeting said that China should “incorporate the concept of green development into all aspects of economic and social development”.
POLITICAL HEAVYWEIGHT: The meeting of the CCDR, on the first day after the lunar new year holiday, underscores the importance of the legislation included. The CCDR, which was formed in 2013 and subsequently chaired by Xi, is the “primary mechanism for top-level policymaking and advancing reform and opening-up”, according to the state-supporting Global Times. The thinktank MERICS described it as a “supra-ministry used to accelerate priority reforms of the Xi leadership” that is the foremost of the existing leading small groups. According to MERICS, “policies passed by the CCDR are regarded as taking immediate effect [by ministries]”.
Climate policy momentum to pick up in 2024?
2024 GOALS: In the latter half of 2023, a “number of important environmental and energy policies have either set tighter and more specific targets or called out the need for faster progress towards existing goals”, a new paper by the Oxford Institute for Energy Studies (OIES) said. The reemergence of language to “cut carbon emissions, reduce pollution, expand green development and pursue economic growth” suggests that “these priorities have risen” for 2024, it added.
TURF WAR: While top-level directives favour bolder action on environmental policy, the picture is “complicated” by “bureaucratic fragmentation”, the report said. This is illustrated by the delays in operationalising China’s carbon markets due to frictions between the ministry of environment and ecology (MEE) and the national development and reform commission (NDRC) and national energy administration (NEA), in addition to “a sharp policy dispute” between the NEA and the MEE on transitioning from a policy of “dual control” of energy to dual control of carbon, it added.
LOCAL POLITICS: Meanwhile, despite the signals coming from central leadership, local governments may not be incentivised to similarly prioritise environmental protection, the OIES said. Instead, local officials may be “keen to boost investment in large infrastructure projects to support economic activity and maintain tax revenues, which can work against environmental goals”.
Reducing ‘dependency’ on China ‘could add 20%’ to transition costs
PRICE WAR: It could cost $6tn – an “additional 20% of the original energy transition bill” – to reduce “critical dependencies on China” for clean technology products, reported Quartz, citing new analysis from consultancy Wood Mackenzie. Industry players are “openly talking about” convincing consumers to pay more for non-Chinese minerals needed for powering electric vehicles, it added. In response to western countries seeking “greater diversity in supply amid a glut of Chinese imports” of clean-energy technologies, the vice-president of the world’s top solar panel manufacturer, Longi Green Energy Technology, warned that restrictions on Chinese companies would slow decarbonisation of European and US economies, in an interview given to the Financial Times. Dennis She stated that solar panels produced in the US without Chinese involvement would cost “double” and that EU protectionism would “kill most of the jobs [in] the [solar industry] downstream”.
SPLITS IN EUROPE: Meanwhile, another Financial Times article reported that a new Chinese solar panel factory being built in Ohio, US, by Longi is facing pushback by local residents suspicious of China’s “involvement”. The Financial Times – in an article carried on the frontpage of its international edition – also quoted senior US treasury officials as saying that “the US and its allies will take action if China tries to ease its industrial overcapacity problem by dumping goods on international markets”, with particular concerns around clean-energy sectors. EU climate chief Wopke Hoekstra warned of the bloc’s “problematic” dependence on China for clean-energy technology, reported Euractiv. European clients have asked battery suppliers in China to “to start producing in Europe as soon as possible”, according to Yicai, due to a new EU regulation “imposing significant obligations on battery manufacturers, importers and distributors”. Meanwhile, “splits” among EU countries are emerging on China, with France and Germany at odds on “everything” from solar energy and electric vehicles to trade deals and supply chains, reported the South China Morning Post. France is typically in favour of restricting Chinese imports of clean-energy technology, the outlet added, while Germany “strongly opposes such measures”. The UK’s Trade Remedies Authority announced that it is ready to “follow” Brussels on the issue of launching an investigation into Chinese electric vehicles, which have “flooded” the global market, reported the Guardian.
Spotlight
The Carbon Brief Interview: Prof Pan Jiahua
At COP28 in Dubai, Carbon Brief’s Anika Patel spoke with Prof Pan Jiahua, vice-chair of the national expert panel on climate change of China, about his ideas for how to move to a zero-carbon future.
China’s national expert committee on climate change, of which Prof Pan is vice-chair, is an advisory body under the national leaders group on climate change, energy-saving and emissions reduction.
He is also a member of the Chinese Academy of Social Sciences and director of its Research Center for Sustainable Development, as well as director of Beijing University of Technology’s Institute of Eco-Civilization Studies.
Below are highlights from the wide-ranging conversation, which covered coal phaseout, the usefulness of a global “loss-and-damage fund”, and prospects for distributed solar and power market reform in China. The full interview can be found on the Carbon Brief website.
New modes of thinking about climate
On the philosophy of ‘ecological civilisation’: “Human beings, for their own benefit – they ignored the benefit of nature. The welfare of nature. We expose nature, we deplete our natural resources…[Under ecological civilisation] the basic idea [is] that [if we can achieve] harmony with nature [and] harmony among our nations, then we can go long into the future.”
On the success of UN climate summits: “COP is the only thing that [has lasted] over 30 years…We have different views, different arguments, different interests but, all in all, we’ve come a long way…We agreed the Paris targets – in 1990 nobody would believe that [was possible].”
On the COP28 summit
On the ‘loss-and-damage fund’: “Losses and damages should be compensated, but not in a way that we divert our energy and resources for [the sake of] compensation. We should use all our energy, resources, spirits – everything – for the zero-carbon transition.”
On the ‘climate paradox’: “If you divert the limited resources for compensating losses and damages, then the zero-carbon transition would be delayed. And if you delay such a transition, there will be more and more losses and damages. I call this the climate paradox.”
On tripling renewable energy: “Tripling renewable energy is not enough. Why are we only tripling? Why not more and more, the more the better. Because look at China – [we] doubled and doubled and doubled [our renewable energy] all the time. This year we doubled installed capacity over the last year. Why shouldn’t we do more than just tripling?”
On western suspicion: “Why did China suddenly become number one in zero-carbon renewables? It’s simply because the United States and Europe used anti-dumping subsidies and section 301 investigations in 2010. Then the Chinese competitive products, solar panels, were not able to go to the world market, so we thought we should…install everything inside of China and immediately China became number one in the world. Now you see the United States and Europe again say ‘no, it’s [a question of] supply chain security’. Right? This is really self-conflicting. On one hand they say ‘climate security’, on the other they say their ‘own security’.”
Investing in renewable energy
On replacing energy infrastructure: “Renewables would not require a huge amount of investment in infrastructure. Fossil fuels, coal electricity generation – the investment is very capital intensive…right? Waste of money.”
On subsidies and industrial policy: “Like a plant – in the very beginning when it’s a seed then you need to take care of it. But when it grows and becomes mature, then it can stand on its own and be competitive.”
Accelerating the energy transition through ‘prosumerism’
On an alternative to a centralised electricity grid: “I use the term ‘prosumerism’. Production, consumption and storage all in one, right? You do not require a very capital intensive power grid…And also, this is consumer sovereignty – when you have your own system, you have a say and then…you are not totally reliant on the power grid.”
On the future of fossil fuels: “Fossil fuels are fossils. They are a thing of the past.”
On phasing out fossil fuels: “We want to have everything competitive enough to phase out fossil fuels, through the market process. Not command and control.”
On abating fossil fuels: “I think that abated fossil fuels is a false statement. Because abated is not compatible, they have no competitiveness. When you abate it, it is more expensive. You think the consumers are silly? They will simply vote for competitive[ly priced] electricity.”
On the challenges of power market reform: “Only the monopoly people will [call for] ‘reform’, and through reform they gain more power, they gain more monopoly. The prosumerism system will destroy such monopolies.”
On the urgency of ‘global boiling’: “Global warming is not global warming, it’s global boiling…Renewables are good for welfare, for wellbeing, for growing the economy, for a better environment. It’s for everybody and for the future. Fossil fuels are not for the future.”
Watch, read, listen
‘GREENING’ ASEAN: A new paper by the Grantham Research Institute found that China plays a positive role in the “development of supply chains for renewable energy technology” in the Association of Southeast Asian Nations (ASEAN) region.
CAPACITY VS GENERATION: Our World In Data deputy editor Hannah Ritchie wrote in her Sustainability by Numbers newsletter that, although China is building more coal-fired power plants, their “capacity factor…has been dropping over the last 15 years”.
ESG: The Environment China podcast discussed research on corporate climate disclosures in China, with authors Erica Downs, Ned Downie and Lou Yushan.
UN SPEECH: State broadcaster CCTV published a recording of Chinese UN permanent representative Zhang Jun’s speech that, to improve climate resilience and food security, the world must avoid “unilateral sanctions, decoupling and technological blockades”.
New science
Exploring phase-out path of China’s coal power plants with its dynamic impact on electricity balance
Energy Policy
New research into the impact of phasing out coal-fired power plants in China on electricity shortages identified the potential for electricity shortfalls of 6-12 terawatt-hours (TWh) per month before 2027 “if China phases out coal plants at their 30-years technical lifespan”. Instead, it said, under an accelerated phase-out pathway, China could “decrease its electricity consumption per GDP by at least 5%” through greater energy efficiency to avoid electricity shortages, or follow a flexible phase-out pathway to both reduce CO2 emissions and “significantly reduce the electricity shortage risk”.
Optimal carbon emission reduction path of the building sector: Evidence from China
Science of The Total Environment
Modelling of China’s building sector found that “in a business-as-usual scenario, building carbon emissions will peak at 6,393m tonnes of CO2 in 2041, missing the 2030 carbon peaking target”. Decarbonisation technologies will make the 2030 carbon peaking target “attainable, though at a considerably high cost”, the researchers said, with emissions “forecasted to peak in 2030 at 5,139m tons of CO2” in an “optimal” scenario.
China Briefing is compiled by Anika Patel and edited by Wanyuan Song and Simon Evans. Please send tips and feedback to china@carbonbrief.org
The post China Briefing 22 February: Interview with Chinese govt climate advisor; missing emissions targets; the cost of excluding China appeared first on Carbon Brief.
With the U.S. bombing Iran and the Strait of Hormuz closed, energy experts say countries transitioning to renewables will be more resilient in the “face of the shock.”
The United States’ war on Iran could fundamentally alter how countries consume and generate energy and hamper international progress in combating climate change, a panel of energy experts said today.
The Global Energy Supply in a Decade ‘Is Not a World We’re Going to Recognize’
One month into the US and Israel’s war on Iran, at least 60 countries have taken emergency measures in response to the subsequent global energy crisis, according to analysis by Carbon Brief.
So far, these countries have announced nearly 200 policies to save fuel, support consumers and boost domestic energy supplies.
Carbon Brief has drawn on tracking by the International Energy Agency (IEA) and other sources to assess the global policy response, just as a temporary ceasefire is declared.
Since the start of the war in late February, both sides have bombed vital energy infrastructure across the region as Iran has blocked the Strait of Hormuz – a key waterway through which around a fifth of global oil and liquified natural gas (LNG) trade passes.
This has made it impossible to export the usual volumes of fossil fuels from the region and, as a result, sent prices soaring.
Around 30 nations, from Norway to Zambia, have cut fuel taxes to help people struggling with rising costs, making this by far the most common domestic policy response to the crisis.
Some countries have stressed the need to boost domestic renewable-energy construction, while others – including Japan, Italy and South Korea – have opted to lean more on coal, at least in the short term.
The most wide-ranging responses have been in Asia, where countries that rely heavily on fossil fuels from the Middle East have implemented driving bans, fuel rationing and school closures in order to reduce demand.
‘Largest disruption’
On 28 February, the US and Israel launched a surprise attack on Iran, triggering conflict across the Middle East and sending shockwaves around the world.
There have been numerous assaults on energy infrastructure, including an Iranian attack on the world’s largest LNG facility in Qatar and an Israeli bombing of Iran’s gas sites.
Iran’s blockade of the Strait of Hormuz, a chokepoint in the Persian Gulf, is causing what the IEA has called the “largest supply disruption in the history of the global oil market”.
A fifth of the world’s oil and LNG is normally shipped through this region, with 90% of those supplies going to destinations in Asia. Without these supplies, fuel prices have surged.
Governments around the world have taken emergency actions in response to this new energy crisis, shielding their citizens from price spikes, conserving energy where possible and considering longer-term energy policies.
Even with a two-week ceasefire announced, the energy crisis is expected to continue, given the extensive damage to infrastructure and continuing uncertainties.
Asian crunch
Carbon Brief has used tracking by the IEA, news reports, government announcements and internal monitoring by the thinktank E3G to assess the range of national responses to the energy crisis roughly one month into the Iran war.
In total, Carbon Brief has identified 185 relevant policies, announcements and campaigns from 60 national governments.
As the map below shows, these measures are concentrated in east and south Asia. These regions are facing the most extreme disruption, largely due to their reliance on oil and gas supplies from the Middle East.
Nations including Indonesia, Japan, South Korea and India are already spending billions of dollars on fuel subsidies to protect people from rising costs.
At least 16 Asian countries are also taking drastic measures to reduce fuel consumption. For example, the Philippines has declared a “state of national emergency”, which includes limiting air conditioning in public buildings and subsidising public transport.
Other examples from the region include the government in Bangladesh asking the public and businesses to avoid unnecessary lighting, Pakistan reducing the speed limit on highways and Laos encouraging people to work from home.
Europe – which was hit hard by the 2022 energy crisis due to its reliance on Russian gas – is less immediately exposed to the current crisis than Asia. However, many nations are still heavily reliant on gas, including supplies from Qatar.
The continent is already feeling the effects of higher global energy prices as countries compete for more limited resources.
At least 18 European nations have introduced measures to help people with rising costs. Spain, which is relatively insulated from the crisis due to the high share of renewables in its electricity supply, nevertheless announced a €5bn aid package, with at least six measures to support consumers.
Many African countries, while also less reliant on direct fossil-fuel supplies via the Strait of Hormuz than Asia, are still facing the strain of higher import bills. Some, including Ethiopia, Kenya and Zambia, are also facing severe fuel shortages.
There have been fewer new policies across the Americas, which have been comparatively insulated from the energy crisis so far. One outlier is Chile, which is among the region’s biggest fuel importers and is, therefore, more exposed to global price increases.
Tax cuts
The most common types of policy response to the energy crisis so far have been efforts to protect people and businesses from the surge in fuel prices.
At least 28 nations, including Italy, Brazil and Australia, have introduced a total of 31 measures to cut taxes – and, therefore, prices – on fuel.
Even across Africa, where state revenues are already stretched, some nations – including Namibia and South Africa – are cutting fuel levies in a bid to stabilise prices.
Another 17 countries, including Mexico and Poland, have directly capped the price of fuel. Others, such as France and the UK, have opted for more targeted fuel subsidies, designed to support specific vulnerable groups and industries.
These measures are all shown in the dark blue “consumer support” bars in the chart below.
Such measures can directly help consumers, but some leaders, NGOs and financial experts have noted that there is also the risk of them driving inflation and reinforcing reliance on the existing fossil fuel-based system.
Christine Lagarde, president of the European Central Bank, spoke in favour of short-term measures to “smooth the shock”, but noted that “broad-based and open-ended measures may add excessively to demand”.
Measures to conserve energy, of the type that many developing countries in Asia have implemented extensively, have been described by the IEA as “more effective and fiscally sustainable than broad-based subsidies”.
So far, there have been at least 23 such measures introduced to limit the use of transport, particularly private cars.
These include Lithuania cutting train fares, two Australian states making public transport free and Myanmar and South Korea asking people to only drive their cars on certain days.
Clean vs coal
At least eight countries have announced plans to either increase their use of coal or review existing plans to transition away from coal, according to Carbon Brief’s analysis. These include Japan, South Korea, Bangladesh, the Philippines, Thailand, Pakistan, Germany and Italy.
These measures broadly involve delaying coal-plant closure, as in Italy, or allowing older sites to operate at higher rates, as in Japan – rather than building more coal plants.
There has been extensive coverage of how the energy crisis is “driving Asia back to coal”. However, as Bloomberg columnist David Fickling has noted, this shift is relatively small and likely to be offset by a move to cheap solar power in the longer term.
Indeed, some countries have begun to consider changes to the way they use energy going forward, amid a crisis driven by the spiralling costs of fossil-fuel imports.
Leaders in India, Barbados and the UK have explicitly stressed the importance of a structural shift to using clean power. Governments in France and the Philippines are among those linking new renewable-energy announcements with the unfolding crisis.
New renewable-energy capacity will take time to come online, albeit substantially less time than developing new fossil-fuel generation. In the meantime, some nations are also taking short-term measures to make their road transport less reliant on fossil fuels.
For example, the Chilean government has enabled taxi drivers to access preferential credit for purchasing electric vehicles (EVs). Cambodia has cut import taxes on EVs and Laos has lowered excise taxes on them.
Finally, there have been some signs that countries are reconsidering their future exposure to imported fossil fuels, given the current economics of oil and gas.
The New Zealand government has indicated that a plan to build a new LNG terminal by 2027 now faces uncertainty. Reuters reported that Vietnamese conglomerate Vingroup has told the government it wanted to abandon a plan to build a new LNG-fired power plant in Vietnam, in favour of renewables.
The post Iran war analysis: How 60 nations have responded to the global energy crisis appeared first on Carbon Brief.
Iran war analysis: How 60 nations have responded to the global energy crisis
Seven Senate Democrats launched the probe over controversial tax credits to the country’s largest exporter of liquefied natural gas.
Seven Democratic U.S. senators have launched a probe into a $370 million “alternative fuel” payout to Cheniere Energy, made earlier this year by the IRS, that critics say the liquefied natural gas export company never should have received.
US Senators Investigate $370 Million IRS Payout to Cheniere Energy
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