2023中国气候转型展望报告（英文版）-CREAVIP专享VIP免费

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China's Climate Transition: Outlook 2023

27 November 2023

Authors

Lauri Myllyvirta, Qi Qin, Chengcheng Qiu, Xinyi Shen

This report was published by the Centre for Research on Energy and Clean Air (CREA) with the

support of the Heinrich Böll Foundationʼs (Heinrich-Böll-Stiung) global head oﬀice in Berlin,

Germany.

Contributors

Xunpeng Shi, Muyi Yang, Shurui Wang

Editor

Kathryn Miller, Hannah Ekberg

Translator

Xiaoying You

Designer

Wendi Wu

Photo by Li Yang on Unsplash

Project coordinator

Ella Soesanto, Xinyi Shen

Acknowledgements

CREA gratefully acknowledges the support, feedback, and insight received from Dr. Paul

Kohlenberg and Jörg Haas. The views expressed in this report are those of the authors and should

not be attributed to any of the aforementioned.

About CREA

The Centre for Research on Energy and Clean Air (CREA) is an independent research organisation

focused on revealing the trends, causes, and health impacts, as well as the solutions, to air

pollution. CREA uses scientific data, research and evidence to support the eﬀorts of governments,

companies and campaigning organisations worldwide in their eﬀorts to move towards clean

energy and clean air. We believe that eﬀective research and communication are the key to

successful policies, investment decisions and advocacy eﬀorts. CREA was founded in 2019 in

Helsinki, Finland and has staﬀ in several European and Asian countries.

About the Heinrich Böll Foundation

The Heinrich Böll Foundation (Heinrich-Böll-Stiung) is a public funded institute in Germany for

green visions and projects with an international network encompassing partner projects in

approximately 60 countries. The Foundation's primary task is political awareness building in

Germany and abroad to promote democratic will, socio-political commitment and international

understanding. It is guided by the basic political values of ecology, democracy, solidarity, and

nonviolence. The Foundation currently has oﬀices in more than 30 countries around the world.

Disclaimer

This publication is produced by the Centre for Research on Energy and Clean Air (hereinaer referred to as ʻCREAʼ) headquartered in

Finland, in accordance with the local laws and regulations. CREA is a global research organisation focused on promoting clean energy

and studying solutions to air pollution.

CREA is politically independent. The designations employed and the presentation of the material on maps contained in this report do

not imply the expression of any opinion whatsoever concerning the legal status of any country, territory, city or area or of its authorities,

or concerning the delimitation of its frontiers or boundaries.

The content and expression of views and opinions expressed in this publication are based on those of the authors of the independent

scientific analysis and study during the time of research, and they do not necessarily reflect the oﬀicial policy or position, or represent

the views or opinions, of CREA, or its members and/or funders.

CREA does not guarantee the timeliness, accuracy and completeness of the information contained in this publication. This publication is

ONLY for the purposes of information sharing, environmental protection and public interests. Therefore, this publication should not be

used as the reference of any investment or other decision-making process. CREA assumes no responsibility or liability for any errors or

omissions in the content of this publication.

This report is originally written in English and translated into Chinese subsequently. In case of a discrepancy, the English version

prevails.

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2China'sClimateTransition:Outlook202327November2023AuthorsLauriMyllyvirta,QiQin,ChengchengQiu,XinyiShenThisreportwaspublishedbytheCentreforResearchonEnergyandCleanAir(CREA)withthesupportoftheHeinrichBöllFoundation’s(Heinrich-Böll-Stiftung)globalheadofficeinBerlin,Germany.ContributorsXunpengShi,MuyiYang,ShuruiWangEditorKathrynMiller,HannahEkbergTranslatorXiaoyingYouDesignerWendiWuPhotobyLiYangonUnsplashProjectcoordinatorEllaSoesanto,XinyiShenAcknowledgementsCREAgratefullyacknowledgesthesupport,feedback,andinsightreceivedfromDr.PaulKohlenbergandJörgHaas.Theviewsexpressedinthisreportarethoseoftheauthorsandshouldnotbeattributedtoanyoftheaforementioned.iAboutCREATheCentreforResearchonEnergyandCleanAir(CREA)isanindependentresearchorganisationfocusedonrevealingthetrends,causes,andhealthimpacts,aswellasthesolutions,toairpollution.CREAusesscientificdata,researchandevidencetosupporttheeffortsofgovernments,companiesandcampaigningorganisationsworldwideintheireffortstomovetowardscleanenergyandcleanair.Webelievethateffectiveresearchandcommunicationarethekeytosuccessfulpolicies,investmentdecisionsandadvocacyefforts.CREAwasfoundedin2019inHelsinki,FinlandandhasstaffinseveralEuropeanandAsiancountries.AbouttheHeinrichBöllFoundationTheHeinrichBöllFoundation(Heinrich-Böll-Stiftung)isapublicfundedinstituteinGermanyforgreenvisionsandprojectswithaninternationalnetworkencompassingpartnerprojectsinapproximately60countries.TheFoundation'sprimarytaskispoliticalawarenessbuildinginGermanyandabroadtopromotedemocraticwill,socio-politicalcommitmentandinternationalunderstanding.Itisguidedbythebasicpoliticalvaluesofecology,democracy,solidarity,andnonviolence.TheFoundationcurrentlyhasofficesinmorethan30countriesaroundtheworld.DisclaimerThispublicationisproducedbytheCentreforResearchonEnergyandCleanAir(hereinafterreferredtoas‘CREA’)headquarteredinFinland,inaccordancewiththelocallawsandregulations.CREAisaglobalresearchorganisationfocusedonpromotingcleanenergyandstudyingsolutionstoairpollution.CREAispoliticallyindependent.Thedesignationsemployedandthepresentationofthematerialonmapscontainedinthisreportdonotimplytheexpressionofanyopinionwhatsoeverconcerningthelegalstatusofanycountry,territory,cityorareaorofitsauthorities,orconcerningthedelimitationofitsfrontiersorboundaries.Thecontentandexpressionofviewsandopinionsexpressedinthispublicationarebasedonthoseoftheauthorsoftheindependentscientificanalysisandstudyduringthetimeofresearch,andtheydonotnecessarilyreflecttheofficialpolicyorposition,orrepresenttheviewsoropinions,ofCREA,oritsmembersand/orfunders.CREAdoesnotguaranteethetimeliness,accuracyandcompletenessoftheinformationcontainedinthispublication.ThispublicationisONLYforthepurposesofinformationsharing,environmentalprotectionandpublicinterests.Therefore,thispublicationshouldnotbeusedasthereferenceofanyinvestmentorotherdecision-makingprocess.CREAassumesnoresponsibilityorliabilityforanyerrorsoromissionsinthecontentofthispublication.ThisreportisoriginallywritteninEnglishandtranslatedintoChinesesubsequently.Incaseofadiscrepancy,theEnglishversionprevails.iiContentsExecutivesummary11Introduction42UnderstandingChina’sgreenhousegasemissions82.1Themeteoricriseofemissions82.2China’semissionsinaninternationalcontext113PathwaystocarbonneutralityforChinaandtheworld153.1Overview153.2Globalpathways173.2.1CentralBanksandSupervisorsNetworkforGreeningtheFinancialSystem(NGFS)173.2.2ClimateActionTracker(CAT)193.2.3InternationalEnergyAgency(IEA)193.3PathwaysforChina203.3.1InstituteofClimateChangeandSustainableDevelopment(ICCSD)233.3.2SchoolofEnvironmentandNaturalResources,RenminUniversity(SENR-RMU)233.3.3InstituteofAtmosphericEnvironment,ChinaAcademyofEnvironmentalPlanning(CAEP-IAE)andElectricPowerPlanningandEngineeringInstitute(EPPEI)243.3.4NorthChinaElectricPowerUniversity(NCEPU)andPekingUniversity(PKU)253.3.5EnergyFoundationChina(EFC)andCenterforGlobalSustainabilityattheUniversityofMaryland(CGS-UMD)254MeasuringandbenchmarkingChina’sprogress274.1TotalCO2emissions274.1.1Trendscomparedtobenchmarks294.1.2Policiesinplace294.1.3Datadisclosure354.2Non-CO2greenhousegases364.2.1Policiesinplace364.2.2Datadisclosure384.3Totalenergysupplyanddemand394.3.1Trendscomparedtobenchmarks394.3.2Policiesinplace:Actionforgreenandlow-carbonenergytransition454.3.3Datadisclosure494.4Electricitygenerationandcapacity504.4.1Trendscomparedtobenchmarks514.4.2Focuson:China’sCoalPowerSurge554.4.3Policiesinplace574.4.4Datadisclosure674.5Industry684.5.1Trendscomparedtobenchmarks694.5.2Policiesinplace:Peakingcarbondioxideemissionsinindustry744.5.3Focus:Ironandsteel804.5.4Datadisclosure844.6Buildings854.6.1Trendscomparedtobenchmarks864.6.2Policiesinplace:Peakingcarbondioxideemissionsintheresidentialsector884.6.3Datadisclosure904.7Transport904.7.1Trendscomparedtobenchmarks924.7.2Policiesinplace:Actionsforpromotinggreenandlow-carbontransportation954.7.3Datadisclosure984.8Provincialactions984.8.1Policiesinplace:China’sclimatetransitionrequirescollectiveeffortsonprovinciallevel984.8.2Recentadjustmentstotargets1045Expertsurveyandinterviews1065.1Totalemissionofcarbondioxide1085.2Consumptionofprimaryenergyandcoal1095.3Thepowersector1125.4Theindustrialsectors1135.5Thetransportationsector1155.6Newdynamics1166Conclusions119Appendix:Historicaldatasources122Abbreviations124ListoffiguresFigure1China’sreportedgreenhousegasemissionsin2014,themostrecentyearforwhichofficialdataareavailable.8Figure2China’sCO2emissionsfromenergyandcement,2000–September2023.10Figure3China’sfossilCO2emissionsbysector(1995–2021).10Figure4China’sfossilCO2emissionsbysector;withemissionsfrompowergenerationallocatedtoconsumingsectors.11Figure5China’sCO2emissionspercapita.12Figure6ComparisonofChina’sCO2emissionspercapitainrelationtoglobalandEU27emissions.13Figure7ComparisonofChina’sCO2emissionsperunitofGrossdomesticproduct(GDP)inrelationtootherregions.13Figure8CO2emissiontrajectoriesoffast-growingeconomies.14Figure9Emission,concentration,andwarmingpathwaysinChina.19Figure10TotalprimaryenergyconsumptioninChinain2050bypathway.22Figure11InstalledpowergenerationcapacityinChinain2050bypathway.22Figure12AnnualchangeinCO2emissionscomparedtoenergytransitionpathways.29Figure13IndicativeemissionspathwaysforChina.30Figure14AnnualchangeinChina’stotalenergyconsumptioncomparedtoenergytransitionpathways.39Figure15AnnualchangeinChina’scoalconsumptioncomparedtoenergytransitionpathways.40Figure16AnnualchangeinChina’soilconsumptioncomparedtoenergytransitionpathways.41Figure17AnnualchangeinChina’sgasconsumptioncomparedtoenergytransitionpathways.41Figure18AnnualchangeinChina’snon-fossilenergyproductioncomparedtoenergytransitionpathways.42Figure19Annualincreaseintheelectrificationratiocomparedtoenergytransitionpathways.43Figure20Energyconsumptiongrowthbysectorandfuel,from2017to2021,andadecompositionofgrowthinindustrybysubsector.44Figure21AnnualchangeinCO2emissionsfromelectricitycomparedtoenergytransitionpathways.51Figure22AnnualchangeinCO2intensityofelectricitygenerationcomparedtoenergytransitionpathways.52Figure23Annualaddednon-fossilpowergenerationcomparedtoenergytransitionpathways,withwind,solar,nuclearandhydropowercapacityaddedeachyearconvertedtoannualelectricityoutputusingaveragecapacityfactorsforeachtechnology.53Figure24Annuallyaddedthermalpowercapacitycomparedtoenergytransitionpathways54Figure25CoalpowerpipelineinChina;changesinprojectstatus,half-yearly.57Figure26China’scleanenergybasesenvisionedinthecentralandprovincialFive-YearPlans.60Figure27China’sNewPowerSystemRoadmap,fromBlueBookontheDevelopmentoftheNewPowerSystem.62Figure28Annualchangeintotalenergyconsumptioninindustrycomparedtoenergytransitionpathways.69Figure29Annualchangeincoalconsumptioninindustrysectorcomparedtoenergytransitionpathways.70Figure30Annualincreaseintheelectrificationratioinindustrycomparedtoenergytransitionpathways.71Figure31Annualincreaseinelectricityconsumptioninindustrycomparedtoenergytransitionpathways.71Figure32Annualchangeincoalconsumptioninironandsteelcomparedtoenergytransitionpathways.72Figure33Annualchangeinelectricityconsumptioninironandsteelcomparedtoenergytransitionpathways.72Figure34Annualchangeintheelectrificationratioinironandsteelcomparedtoenergytransitionpathways.73Figure35Annualchangeintheelectrificationratioinchemicalscomparedtoenergytransitionpathways.73Figure36China’ssteelproductionshareandEAF-steeloutputtargetby202582Figure37Newlyproposedironandsteelmakingcapacityannouncedthroughcapacityreplacementonahalf-yearlybasis,2017–2023H1.84Figure38Newironandsteelmakingcapacityadditionsbytheirestimatedcommisionyear.84Figure39Annualchangeincoalconsumptioninbuildingscomparedtoenergytransitionpathways.86Figure40Annualchangeingasconsumptioninbuildingscomparedtoenergytransitionpathways.87Figure41Annualincreaseintheelectrificationratioinbuildingscomparedtoenergytransitionpathways.87Figure42Annualchangeinoilconsumptionintransportcomparedtoenergytransitionpathways.92Figure43Annualchangeintheelectrificationratiointransportcomparedtoenergytransitionpathways.93Figure44Annualchangeinelectricityconsumptionintransportcomparedtoenergytransitionpathways.93Figure45Vehicleproduction;12-monthmovingsum.95Figure46Comparisonofprovincialtargetsonnon-fossilenergyconsumptionproportionby2025.99Figure47Comparisonofprovincialtargetsonnon-fossilenergyconsumptionproportionby2030.100Figure48Comparisonofprovincialtargetsforprojectedincreaseofnon-fossilenergyconsumptionproportionby2025withbaselinenumbersin2020.101Figure49NewlyinstalledpowercapacityofdifferentenergysourcesfortheleadingprovincesbetweenJanuaryandAugust2023.103Figure50Comparisonofprovincialtargetsonreductioninenergyconsumptionby2025(comparedtolevelsin2020).104Figure51ComparisonofprovincialtargetsonreductioninCO2emissionby2025(comparedtolevelsin2020).104Figure52ComparisonofprovincialtargetsonreductioninCO2emissionby2030(comparedtolevelsin2005).104Figure53Expertfieldsofexpertise(persons)107Figure54Expertindustries(persons)107Figure55Statusofaffiliatedinstitutes(persons)107Figure56ThepeakyearofChina'scarbonemissions108Figure57Carbonemissionpeak109Figure58YearofpeakprimaryenergyconsumptioninChina.110Figure59HasChina'scoalconsumptionpeaked?111Figure60NumberofresponsesfordifferentYearsofcoalconsumptionpeaking112Figure61PeakyearofcarbonemissionsinChina'spowersector113Figure62PeakyearofcarbonemissionsinChina'ssteelindustry114Figure63ThepeakyearofcarbondioxideemissionsinChina'scementindustry115Figure64PeakyearsofcarbondioxideemissionsinChina'stransportationsector116ListoftablesTable1Overviewoftheglobalscenariosincluded.17Table2OverviewoftheincludedscenariosbyChineseresearchers.20Table3CO2emissionsundertheICCSD1.5°C,1.5°Ctarget-orientedand2°Cpathways(Heetal.,2022).28Table4Selectedpoliciesrelatingtonon-CO2greenhousegases.38Table5Selectedpoliciesrelatingtototalenergyconsumptionandsupply.47Table6Annualcapacityadditionsofnon-fossilpowergenerationtechnologiesandcapacityfittedwithCCS(Heetal.,2021).51Table7Selectedpoliciesrelatingtotheelectricitysector.66Table8Selectedpoliciesrelatingtoindustry.74Table9Selectedpoliciesrelatingtothebuildingssector.89Table10Selectedpoliciesrelatingtotransportation.95Table11Totallengthoftherailwaylinesandurbanrailtransitinusefrom2005to2025(1,000km).98Table12SurveyresultsonChina'scarbonemissionpeakingyear108Table13SurveyresultsonthepeakyearforChina’stotalprimaryenergyconsumption109Table14SurveyresultsontheyearofpeakcoalconsumptioninChina110Table15SurveyresultsonthepeakyearofcarbonemissionsinChina'spowersector112Table16SurveyresultsonthepeakyearofcarbonemissionsinChina'ssteelindustry113Table17SurveyresultsonthepeakyearofcarbonemissionsinChina'scementindustry115Table18SurveyresultsonthepeakyearofcarbondioxideemissionsinChina'stransportationsector116Table19SurveyresultsontheimpactofChina'spost-pandemiceconomicsituationontheenergytransitionprocess117Table20SurveyresultsonviewsorrecommendationsregardingChina's"dualcarbon"strategyandgoals117Table21Historicaldatasources122ExecutivesummaryChina’ssuccessinmeetingandexceedingitscurrentclimatetargetsispossiblythesinglemostimportantfactorintheglobalfightagainstclimatechange.Currently,progressoncleanenergydeploymentisunderminedbycontinuedcoalcapacityexpansionandarapidgrowthofenergyconsumption.Tosuccessfullyachieveapeakingandrapiddeclineofemissions,Chinawillneedincreasedeffortsonenergyefficiency,asuccessfultransformationoftheeconomicgrowthmodel,orevenhigherinvestmentsintocleanenergy.China,theworld'slargestgreenhousegasemitterandthemainsourceofemissionsgrowthinthepasttwodecades,holdsacrucialroleinglobalclimateefforts.Toenableglobalemissionstopeakfastenough,Chinaneedstonotonlymeetbutexceeditscurrentemissionscommitments.Inthisseriesofannualreports,webreakdownChina'sprogresstobenchmarksfordifferentsectorsandvariablesthatcanbecomparedtoavailabledatafromChina.EachoneisbasedonasuiteofclimatetransitionscenariosfromChineseandinternationalinstitutions.InthissecondannualeditionoftheoutlookreportinNovember2023,wereassessChina’sprogresstowardsthecountry’sclimatecommitmentsandtowardsemissionspathwaysalignedwiththeParisAgreementgoals.Belowwehavehighlightedourkeyfindings.EmissionsreboundChina’scarbondioxide(CO2)emissionsreboundedforcefullyin2023.Theemissionsincreasewasnotreflectiveofastructuraltrendbutrathercausedbytwoextraordinaryfactors:acollapseinhydropowergenerationcausedbythehistoricallylowrainsthatdroveupcoal-firedpowergeneration.There-openingoftheeconomyafteralmostthreeyearsofzero-COVID-19policiescausedarebound,particularlyinoilconsumption.Inaddition,energyandmaterialsdemandformanufacturingcleanenergyandcleantransportationtechnologiesoffsetmuchofthefallindemandfromtherealestatesector.1CleanenergysurgeThemostimportantdevelopmentof2023isthatChina’sdeploymentofcleanenergygenerationhasreachedthescaleprojectedin1.5-degreescenarios,aremarkableachievementthatwaspredictedinourOutlooklastyear.Maintainingannualadditionsofcleanelectricityproductioncapacityatthe2023levelorincreasingthemfurtherwillenableChinatopeakanddeclineitsCO2emissionsinthecomingyears.Productionandsalesofelectricvehiclesarealsogrowinginlinewith1.5-degreescenarios.Electrificationofenergyuseintheindustrialandbuildingsectorsissimilarlyontrack.Electrificationwillenableemissionsreductions.ProgressinreformingthegrowthmodelChina’sclampdownonfinancialrisksandspeculationintherealestatesectorhasputanendtogrowthinsteelandcementoutput,whichwerethekeydriversofChina’semissionsgrowthformostofthepasttwodecades.Thisisanotherareawheretrendsinthecountryhavealignedwithclimatetransitionscenarios.CleantechnologymanufacturingboomChina’scleantechnology(‘cleantech’)manufacturingsectorisundergoingrapidexpansiontodelivernotjustanincreaseindemandinChinabutalsoanticipatedexponentialgrowthindemandfromtherestoftheworld.Thishasmeantanunprecedentedboomininvestment,makingcleantechamajoreconomicdriver,absorbinganestimated10%ofallinvestmentin2023andtheunderlyingreasonforthenetgrowthininvestment.ExpertsgrewmoreoptimisticTogaugetheviewsandexpectationsofpractitionersinthefield,Outlook2023surveyedanexpandedpoolof89expertsrepresentingdiversespecialisationsinthefieldofclimateandenergy.Theexpertsinthisyear'ssurveyaremoreoptimisticthanthoseinterviewedlastyear,with21%ofexpertsbelievingChina’sCO2willpeakbefore2025,upfrom15%in2022’ssurvey.ThepercentageofexpertsexpectingChina’sCO2emissionstorisemorethan15%abovetheir2020beforepeakingfellfrom69%to56%.Energyconsumptiongrowthandinvestmentsincoal-basedcapacityremainofftrackOverall,however,Chinaisn’tyetontracktostartreducingemissionsattheratesrequiredinclimatetransitionpathways.Thegrowthrateoftotalenergyconsumptionismuchfasterthaninthetransitionpathways,withconsumptioninindustry,buildingsandtransportationallrunningahead.Economicpoliciesduringthezero-COVID-19periodincreasedactivityintheenergyintensivepartsoftheeconomy,underminingreductionsinenergyintensity.Totacklethisissue,Chinawillneedincreasedeffortsonenergyefficiency,asuccessfultransformationoftheeconomicgrowthmodel,orevenhigherinvestmentsintocleanenergythanprojectedinthetransitionscenarios.Investmentsincoal-basedpowercapacityhaveaccelerated.Sincethestartof2022,Chinese2authoritieshavegrantedpermitsto152gigawatts(GW)andstartedconstructionon92GWofnewcoalpowercapacity.Evenifweassumeexistingcoalcapacitywillberetiredatanacceleratedpace,China’scoal-firedpowercapacityisstillontracktoincrease23%by2030fromexistinglevels.Itisentirelypossibleforemissionstofallwhilecapacityincreases,butthebuildupofnewcoalpowerplantsmakesemissionspeakingeconomicallyandpoliticallymorechallengingtoimplement.Investmentsincoal-basedindustrialcapacity,particularlyironandsteelcapacity,havecontinued.Withdemanddeclining,thesteelandbuildingmaterialssectorsareexpectedtohavepeakedtheiremissions.Topavethewayforcarbonneutrality,policiesrestrictingnewcarbon-intensivecapacityandincentivesforlow-carbontechnologyareneeded.Asaresult,ChinaisbadlyofftracktotwocommitmentsithasmadeundertheParisAgreement:‘strictlycontrolling’newcoalpowerprojectsduringthe2021to2025period,andreducingenergyintensity(energyconsumptionperunitofGDP)by13.5%from2020to2025.TheprogressonreducingCO2emissionsintensityisalsoofftrack,buttheexpectedsurgeincleanelectricitygenerationinthenexttwoyearsishighlylikelytoenableChinatomeetthetarget.HaltingprogressonpoliciesIntermsofpolicymaking,the2023focuswasonenablingpolicies,afterthepolicyframeworkwascompletedlastyear.Thisincludesthemonitoring,reportingandverificationofemissions,developmentofmarket-basedinstrumentssupportingemissionreductions,aswellaspowermarketreform.Stepsweretakentopromotegreenelectricitytradingandusetheemissionstradingsystemtopromoteemissionreductionsthroughcertifiedemissionsreductions(CCER).Coalpowercapacitypaymentmechanismwasestablished,incentivizinganincreaseincoalpowercapacityanddefermentofretirements.Policiespromotingthedeploymentofsolarandwindpowerprovedhighlyeffective,asdidindustrialpoliciesstimulatingnewcapacityinthesolar,battery,electricvehicleandothercleantechindustries.Emissionsmonitoringandreportingobligationswerestrengthenedforindustrialsectors,encouragedinpartbytheEuropeanUnion(EU)carbontariffsoncarbon-intensiveimports,whichcreateanincentiveforimprovedemissionsdata.Therewasunclearornoprogressonseveralotherareas:notimelinewasspecifiedforcontrollingtotalemissionsorfortheexpansionofthecarbonmarket.Forpowermarketreform,regulatoryworkcontinuedbutnonewmilestoneswerespecifiedbeyondthelong-heldaimofcreatingaunifiednationalmarketby2030.WhileChinahasrecentlyunveileditsnationalmethaneemissionreductionactionplanandhasdeclaredintentionsto“seektoestablishamonitoring,reportingandverification(MRV)systemformethane”,theactionplanstopsshortofsettingquantifiabletargetsformethaneemissionreduction.Progressinotherareasofnon-CO2greenhousegasemissionsremainsstalled.TherehasbeennoadvancementinimprovingtheMRVforthebroaderspectrumofnon-CO2emissions,norinthepublicreportingofenergyuseandemissionsatagranularlevel.31IntroductionIn2023,cleanenergyandcleantransportationtechnologiesbecameamajoreconomicdriverinChina.Capitalexpenditureonmanufacturingandsupplychainsforsolarpower,batteriesandelectricvehiclesdrovegrowthinoverallinvestment.Investmentincleanpowergenerationandhigh-speedrailreportedsomeofthehighestgrowthratesamongallinvestmentcategories.Thecleanenergyandcleantechnologyexpansionhassupportedaggregatedemandandindustrialactivitydespitetheweaknessinrealestate,contributingtotheeconomicrecoveryafterCOVID-19controlswereliftedinlate2022.Theexpansionhasalsocontributedtoincreasesinenergyconsumptionandcarbondioxide(CO2)emissionsduringtheyear,butthispartoftheemissionsincreasewillpaybackmanifoldinthecomingyears—bothasareductioninChina’sownemissionsandasreductionsinthosecountrieswhereChinaexportscleanenergyequipment,suchassolarpanels,batteriesandelectricvehicles.China’scleanenergytechnologyexportshavesurged,enablingtheenergytransitionintherestoftheworldbutalsocausingincreasingconcernsaboutexcessiverelianceonChina.ThisyearhasalsoseenareboundinoilandelectricityconsumptionaftertheremovalofCOVID-19controls,alongwithhistoricallyweakrainsandhydropowergeneration,whichmeantthatthecleanenergyexpansiondidn’tresultinanimmediatefallinemissions.China’sgreenhousegas(GHG)emissionsreboundedtotherecordlevelsof2021inthefirsteightmonthsof2023,afterfallingin2022.However,therearestrongreasonstobelievethatthelatestjumpinemissionswillbetemporarybecausetheimpressiveadditionsofcleanenergyandaninevitablerecoveryinhydropowergenerationwillpushemissionsdowninlate2023andin2024.Extremeweathereventswereobservedin2023.ThedrywinterinNorthernChinacontributedtosandstormsthatwerealsofeltinBeijingandotherlargecitiesinthenorth.TorrentialrainsinAugustheavilyaffectedricefarming,raisingconcernsonceagainabouttheimpactofclimatechangeonChina’sfoodsecurity.China’snationwidetemperaturerecordwasbrokeninJuly,asapartofanotherhistoricheatwave.Withoutglobalwarming,the2023heatwavewouldhavebeenaonce-in-250-yearsevent,butglobalwarmingmeansthatanequallysevereheatwaveisnowexpectedtooccureveryfiveyears1.SwissRe,theworld’slargestreinsurer,assessesthatChinaisamongthecountriesmostaffectedbytheeconomicandphysicalimpactsofclimatechange,rankingfaraboveregionssuchastheEuropeanUnion(EU)andNorthAmerica2.Atthesametime,astheworld’slargestgreenhousegasemitter,China’sownenergyandclimatepolicieshaveamajorbearingontheseverityoftheclimateimpactsthecountrywillface.Thecountry’semissionshavemorethanquadrupledoverthecourseofthepasttwodecades,making1WorldWeatherAttribution.(July2023).https://www.worldweatherattribution.org/extreme-heat-in-north-america-europe-and-china-in-july-2023-made-much-more-likely-by-climate-change/.Scientificblog.2SwissReInstitute.(2021).Theeconomicsofclimatechange.https://www.swissre.com/institute/research/topics-and-risk-dialogues/climate-and-natural-catastrophe-risk/expertise-publication-economics-of-climate-change.html#chapter-Physical-risks.Scientificpublication.4Chinatheprimarydriverofglobalemissionsgrowthovertheperiod.Emissionsgrowthin2000–2008waspredominantlyduetoanexport-drivenindustrialandinvestmentboom.After2009,emissionsgrowthwasmainlydrivenbyrealestate,infrastructureandindustrialexpansion.China’shighemissionsrelativetogrossdomesticproduct(GDP)areduetobothacoal-heavyenergystructureandaneconomicstructurerelyingheavilyonconstructionandenergy-intensiveindustry.Now,massivecleanenergyexpansionandtheprospectofaneconomictransformationawayfromheavyindustry-drivengrowthopenupthepossibilityofreversingthefactorsbehindChina’shighemissions.China’smotivationstoactonclimateChinahasastrongself-interestinclimateaction,duetopressingenvironmentalchallengesathomeaswellastheimpactsofclimatechangeonfoodsecurity,waterresources,theregionalsecurityenvironment,andotherkeyaspectsofnationalsecurity.ClimateactionalignswithChina’slong-termeconomicandindustrialgoals,includingtheambitiontobecomeatechnologicalandmarketleaderincoretechnologiesofthe21stcentury.Chinahasalsobeenabletouseclimateactionanddiplomacytomeetitsglobalagenda.Chinawantstobeseenasasteadypartnerandacrucialcontributortosolvingglobalenvironmentalissues.ClimatepolicyanddiplomacyhaveallowedChinatopursuemanyforeignpolicygoals–shapinginternationalrules,portrayingChinaasaresponsiblestakeholderandproviderofimportantpublicgoods,buildingamultipolarworld,andincreasingChina’sinfluenceandpresenceindevelopingandemergingmarkets.TheimpactsofclimatechangeonChinaincludeweakenedfoodsecurity,increasedriskofintenseflooding,andincreasedriskofotherextremeweathereventssuchascyclones.China’scoastlineincludeslow-lying,verydenselypopulatedareassuchasthemegacitiesoftheYangtzeRiverDeltaandTianjin,implyingthatthecostsofsealevelrisearemassive.Theriseinaverageannualtemperatures,orextendedperiodsofextremeheat,alsofacilitatesthespreadofvector-borneinfectiousdiseasessuchasmalariaanddengue.AccordingtotheChinaMeteorologicalAdministration,theincidenceoftorrentialrainsandextremeheatwaveshasalreadyincreasedinChina,ashasthestrengthoftyphoonslandingonthecoast3.Agricultureisaffectedamongothersectorsthroughincreaseddroughts,floodsandheatwaves.Warminghasalreadyincreasedthelikelihoodofcropfailures.Heatwavesinkeyagriculturalregionsriskbecomingsohotthatdaytimeworkinthefieldsbecomesphysiologicallyimpossible4.FoodsecurityisakeypriorityforChina,thereforeimpactsonagricultureareaparticularlyimportantreasonforthecountry’sdecision-makerstopayattentiontoclimatechange.Accordingtopublicsurveys,theChineseareamongthenationsthemostconcernedaboutclimatechange.InthefiftheditionoftheEuropeanInvestmentBankClimateSurvey,91%ofrespondentssaidthatclimatechangehasanimpactontheireverydaylives,ahigherpercentagethanintheEU(80%)ortheUnitedStates(67%)5.3ChinaMeteorologicalAdministration.(2021).BlueBookonClimateChangeinChina2021.http://www.cma.gov.cn/2011xwzx/2011xqxxw/2011xqxyw/202108/t20210805_582404.html.Officialdocument.4Kang,S.,Eltahir,E.A.B.NorthChinaPlainthreatenedbydeadlyheatwavesduetoclimatechangeandirrigation.NatCommun9,2894(2018).https://doi.org/10.1038/s41467-018-05252-y.Scientificpublication.5EuropeanInvestmentBank(EIB).(2022).EIBClimateSurvey.5However,thereisalsostrongoppositiontoclimateactionandreductioninfossilfueluseinChina,includingfromprovincesandstate-ownedenterpriseswithahighrelianceoncoalandcoal-relatedindustries.State-ownedenterprisesinthecoalpowerandsteelsectorscontinuetoinvestincoal-basedcapacity.ThesesectorsareChina’stwolargestemittersofCO2,andthereisnosignofinvestmentincoal-basedcapacitybeingscaledback.AcompleteshiftofnewinvestmentsintocleancapacityisneededtoputChinaontracktopeakCO2emissionsandavoidaglutofunneededpowerandindustrialcapacity.Yet,evenagainstthisbleakbackdrop,itisnonethelessnoteworthythatChinahasdemonstrateditsdeterminationtotackleclimatechangebyannouncingaCO2emissionspeakbefore2030andcarbonneutralitybefore2060(“dualcarbongoals”)6,aswellasaseriesofpoliciestosupportthesegoals.China’spoliciesandcommitmentsChinesePresidentXiJinpingreaffirmedChina’sdeterminationtorealisethe2030/2060goalsinJuly2023,statingthecommitmentissteadfast.Healsocalledforanaccelerationofthegreenandlow-carbontransformationofChina’sdevelopmentmodelandacceleratingtheconstructionofanewelectricitysystem7.Afterannouncingthetargetsin2020,theCommunistPartyandthegovernmenthasputinplaceapolicyframeworkforcarbonpeakandcarbonneutrality,knownas‘1+N’.“1”referstothelong-termapproachtocombatingclimatechange,whichiswell-documentedinTheWorkingGuidanceforCarbonDioxidePeakingandCarbonNeutralityinFullandFaithfulImplementationoftheNewDevelopmentPhilosophy,issuedon24October20218.Chinaaimstograduallyincreasetheshareofnon-fossilenergyconsumptiontoaround20%by2025,around25%by2030,andmorethan80%by2060.“N”referstosolutionstoachievepeakcarbonemissionsby2030,startingwiththeActionPlanforCarbonDioxidePeakingBefore2030,issuedon26October20219.Chinaofficiallyaddedthedualcarbongoalstoitsnationallydeterminedcontributions(NDCs)targetson28October202110,justbeforeCOP26inGlasgowin2021.Sincethen,“N”,aseriesofclimate-relatedpolicydocuments,hasbeensuccessivelyissuedasspecificimplementationplansforkeyareassuchasenergy,industry,constructionandtransport,andforkeysectorssuchascoal,electricity,ironandsteelandcement,coupledwithsupportingmeasuresintermsofscienceandtechnology,carbonsinks,financeandtaxation,andfinancialincentives.https://www.eib.org/en/surveys/climate-survey/5th-climate-survey/index.htm.Researchreport.6UNNews.(2020).‘Enhancesolidarity’tofightCOVID-19,ChinesePresidenturges,alsopledgescarbonneutralityby2060.https://news.un.org/en/story/2020/09/1073052.Newsarticle.7XinhuaNews.(July2023).XiJinpingemphasisedattheNationalConferenceonEcologicalandEnvironmentalProtection.https://www.gov.cn/yaowen/liebiao/202307/content_6892793.htm.Newsreport.8CentralCommitteeoftheCommunistPartyofChina,StateCouncil.(2021).WorkingGuidanceforCarbonDioxidePeakingandCarbonNeutralityinFullandFaithfulImplementationoftheNewDevelopmentPhilosophy.https://en.ndrc.gov.cn/policies/202110/t20211024_1300725.html.Policy.9StateCouncil.(2021).ActionPlanforCarbonDioxidePeaking.https://en.ndrc.gov.cn/policies/202110/t20211027_1301020.html.Policy.10NDCRegistryChina(2021)ChinafirstNDC(Updatedsubmission)https://unfccc.int/NDCREG.Officialdocument.6Atthetwo-yearanniversaryoftheannouncementofthedualcarbongoals,on22September2022,China’stopplannerNationalDevelopmentandReformCommission(NDRC),statedthatChinahasestablishedits“1+N”climatepolicyframework,includingsectoralandregionalplans11.TheCommissionpointedoutthatChinahasmadestableprogressinitsclimateactionsandisundertakingto:●Promoterenewableenergydevelopment.China’stotalrenewablepowerinstallationreachedover1100GWandChinahasbecometheworld’sleaderinrenewablepowerinstallations.●Promoteindustrialrestructuringandrestrictprojectswithhighenergyconsumptionandhighpollution.Comparedto2012,China’senergyintensity(totalenergyconsumptionperunitofGDP)droppedby26.4%in2021,andcarbonintensity(totalcarbonemissionsperunitofGDP)droppedby34.4%.●Promotethetransitionofconstructionandtransportationsectors.In2021,China’snewlybuiltgreenbuildingsreached2billionsquaremetres.TheretainednumberofnewenergyvehiclesinChinaaccountedforhalfoftheworld’stotal.AretheseeffortsenoughforChinatoachieveitscarbongoals?Inthisreport,wereviewedliteraturepublishedbyinternationalorganisationsandnationalresearchersandidentifiedindicatorsandbenchmarksfromChina.WecompiledthehistoricaldatafortheindicatorsandfuturedevelopmentprojectionstoassessChina’sprogress.WealsoconductedanexpertsurveytoevaluatetheirconfidenceinChina’semissionsoutlook.Chapter2presentsanoverviewofthesources,historyanddriversofChina’sgreenhousegasemissions.Chapter3introducesthedifferenttransitionpathwaysconsistentwiththeParisAgreementgoalstolimitglobalwarming,whichwewilluseasbenchmarksforChina’sprogress.Chapter4comparesChina’sprogressindifferentaspectsoftheclimatetransition,usingindicatorsandbenchmarksdevelopedfromthetransitionpathways.Chapter5presentsfindingsfromanexpertsurveythatgaugestheviewsandexpectationsofwell-informedandinfluentialindividualsintheenergyandclimatesectorstounderstandhowtheyinterpretcurrentpoliciesandtrends,andhowtheyexpectChina’semissionstodevelopoverthisdecade.OurfindingsandconclusionsaregiveninChapter6.11People’sDaily(22Sep.2022)NDRC:Thecountry’sworkonthe‘twocarbontargets’achievedagoodstartinthepasttwoyears.http://finance.people.com.cn/n1/2022/0922/c1004-32531849.html.Newsarticle.72UnderstandingChina’sgreenhousegasemissions2.1ThemeteoricriseofemissionsChinaistheworld’slargestgreenhousegasemitter,andthesecond-largesthistoricalemitter,aftertheUnitedStates.In2021,itproduced27%ofglobalgreenhousegasemissions12,witharound18%oftheworld’spopulationandGDP.China’sshareofglobalemissionsrosetothislevelfromlessthan10%in1990.Chinawasresponsiblefor73%oftheincreaseinglobalCO2emissionsfrom2010to2022andasoftheendof2022,wastheonlymajoremittertoincreaseemissionsafterthebeginningoftheCOVID-19pandemic,duetoarapidandcarbon-heavyrecoveryfromtheinitiallockdowns13.Thecountry’shighemissionsrelativetoGDPareduetobothacoal-heavyenergystructureandanenergy-intensiveeconomicstructurethatreliesheavilyonconstructionandsmokestackindustries.Asaresult,China’semissionsaredominatedbyenergyandindustrialprocesses,inparticulartheproductionofsteel,cement,andotherconstructionmaterials.Figure1China’sreportedgreenhousegasemissionsin2014,themostrecentyearforwhichofficialdataareavailable12AlfredoRivera,ShwetaMovalia,HannahPitt,andKateLarsen.RhodiumGroup.(Dec,2022).https://rhg.com/research/global-greenhouse-gas-emissions-2021/.Researchnote.13EnergyInstitute.2023StatisticalReviewofWorldEnergy.(2023).https://www.energyinst.org/statistical-review.Researchreport.8ChinahascommittedtoCO2emissionsandcleanenergytargetssincetheCopenhagenclimatesummitinDecember2009.Actionstoachievethetargetshavemadethecountrytheworldleaderindeployingrenewableenergyandnuclearpower,buthavenotbeensufficienttopeakCO2emissionsfromfossilenergyconsumption.ChinacommittedtopeakingCO2emissions“around2030”,intheObama–Xiclimatedeclarationin2014.In2020,PresidentXiJinpingpledgedthatChinawouldtargetcarbonneutralitybefore2060andpeakCO2emissions“before2030”14.TheincreaseinChina’semissionsinthe2000swasdrivenbyitsrapidindustrialandeconomicgrowthaftertheexportandinvestmentboomstartedbyWorldTradeOrganization(WTO)accession.Thisboomcametoaheadwiththeglobalfinancialcrisis,andin2008,leadershiprespondedwithanunprecedentedlylargeinfrastructurestimulusprogrammethatdroveevenfasteremissionsincreasesin2009–2012.Spendingwaspredominantlydirectedatthemostenergy-intensivepartsoftheeconomy:constructionandheavyindustry,particularlysteel,cement,andotherconstruction-materialsindustries.Whentheeffectofthestimulusprogrammestartedtowearoutin2013,coal,steelandcementconsumptionbegantofall.Thisfallwascompoundedbythe“waroncorruption”launchedbyPresidentXiJinping,curbinglocalgovernmentpermitsandenthusiasmforconstructionprojects.Theleadership’sinitialresponsetotheslowdownoftheindustrialeconomywastobrandthechangesasapartofan“economicnewnormal”inwhichhouseholdconsumption,services,andhigh-value-addedindustrieswouldbecomethekeydriversofgrowth.ThiswasalsothetimewhenPresidentsXiandObamaannouncedthe“climatedeal”betweenthetwocountries,includingChina’sCO2peakingcommitmentandpavingthewayfortheParisAgreement,whiletheairpollutioncrisisdominateddomesticheadlines,creatingauniquewindowofopportunitytolimitcoalconsumptionatleastinthemoreprosperouscoastalareas.However,fallingdemandandpricesforkeycommoditiesandheavyindustryproductsledtomajorfinancialdistressinstate-ownedenterprisestowardstheendof2015.Anewwaveofstimuluswaslaunchedinlate2015.Thisstimulus-drivengrowthcontinuedinthefollowingyearsandintensifiedasthegovernmentsoughttooffsettheeconomicimpactoftheCOVID-19pandemicwithsupply-sidestimulusmeasures.Asaresult,China’semissionssurgedinlate2020andearly2021,duetoeconomicrecoverypoliciesaimedatstimulatingconstructionandindustrialoutput,includingexportindustries.In2020,theGlobalCarbonProjectattributestwothirdsoftheincreaseinChina’semissionstoanincreaseinemissionsembeddedintrade15.COVID-19-relatedstimuluspoliciesintherestoftheworldboosteddemandforChina’sexports,whilethecountry’sownpoliciesboostedproductionwhiledoinglittletocreatedomesticdemand.Thesurgeinindustrialoutputreversedinmid-2021,duetoeconomicpoliciesaimedattampingdownrealestatespeculationandlow-valueconstructionprojects,strictCOVID-19controlpolicies,andclean14UNAffairs.(2021).Chinaheadedtowardscarbonneutralityby2060;PresidentXiJinpingvowstohaltnewcoalplantsabroadhttps://news.un.org/en/story/2021/09/1100642.Newsannouncement.15Friedlingstein,P.etal.(2022):GlobalCarbonBudget2022.EarthSystemScienceData,14,4811–4900,2022,https://doi.org/10.5194/essd-14-4811-2022.9energyexpansion.Arecordheatwaveanddroughtcausedemissionstoincreaseagaininlate2022andin2023,ashydropowergenerationplummetedandwassubstitutedbycoalintheshortterm.Inaddition,oilconsumptionreboundedaftertheremovalofzero-COVID-19policies.Figure2China’sCO2emissionsfromenergyandcement,2000–September2023Figure3China’sfossilCO2emissionsbysector(1995–2021)10China’sCO2emissionsareheavilydominatedbypowergenerationandheavyindustrysectors,withironandsteel,non-metallicminerals(cementandglass)andchemicalsbeingthelargestindustrialemitters.Notably,theentiretransportandhouseholdsectorsrankbelowtheseindustriesintotalemissions(Figure3).Whenemissionsfrompowergenerationareallocatedtothesectorsconsumingthepower(Figure4),thenon-ferrousmetalsindustry(e.g.aluminium,copperandnickel)standsoutasamajoremitterduetothesector’shighelectricitydemand.Figure4China’sfossilCO2emissionsbysector;withemissionsfrompowergenerationallocatedtoconsumingsectorsSatellite-basedestimatessuggestthatChina’smethaneemissionswereincreasingbyapproximately1.5%peryearfrom2010–2017,withincreasesacrossallemittingsectors(coal,oilandgas,riceandlivestockfarmingaswellaslandfillsandwastewater)16.However,emissioninventoriesbasedonactivitydata(e.g.coalproduction)suggestthatemissionsgrowthislikelytohavesloweddownorhaltedfrom2012–2018whencoalproductiongrowthwasslowornegative.Thereissignificantuncertaintyaboutemissionslevelsandtrends.172.2China’semissionsinaninternationalcontextChina’spercapitaemissionsfromfossilfuelusewithinthecountry’sbordersovertooktheworldaveragearound2005andthoseoftheEUin2013.16Zhang,Y.etal.(2022).ObservedchangesinChina’smethaneemissionslinkedtopolicydrivershttps://www.pnas.org/doi/10.1073/pnas.2202742119.Researcharticle.17Liu,G.etal.(2021)RecentslowdownofanthropogenicmethaneemissionsinChinadrivenbystabilizedcoalproductionhttps://pubs.acs.org/doi/pdf/10.1021/acs.estlett.1c00463.Researcharticle.11Whenemissionsareallocatedbasedonwheregoodsareconsumed,ratherthanbasedonwheretheyareproduced,China’semissionsareapproximately10%lower.Inotherwords,China'slargeexportindustrydoescontributetoitshighemissions,butlessthanisgenerallyperceived.China’sconsumption-basedemissionspercapitawereequalwiththeEUin2020.China’sconsumption-basedemissionsarehighrelativetothelevelofGDPbecauseoftheenergy-intensivestructureoftheeconomy.Themostenergy-intensivecommodities—steel,cementandnon-ferrousmetals—arepredominantlyproducedforthedomesticmarket.Furthermore,Chinaisalsoamajorimporterofemissions-intensivecommodities.Emissionsembeddedintradepeakedaroundthe2007globalfinancialcrisis,andhavebeenfallingsincethen.Inotherwords,netexportshavenotcontributedtoChina’semissionsgrowthsince2008.AmajorfocusofChina’sclimatetargetshasbeenreducingtheCO2intensityoftheeconomy,i.e.CO2emissionsperunitofGDP.Chinahasmaderapidprogressinthisregard,butfromaveryhighstartingpointcomparedtotheaverageofothernon-OrganisationforEconomicCo-operationandDevelopment(OECD)countries,letalonedevelopedeconomies.Incomparisontootheremergingeconomiesthathaveachievedrapideconomicgrowthinthepastfewdecades,ChinahasfollowedafarmoreCO2-intensivegrowthtrajectory,duetothehighshareofcoalintheenergymixandthehighlyenergyintensivestructureoftheeconomy.TheslowdowninCO2emissiongrowthsince2013hasproducedsomeconvergence,butemissionspercapitaremainmorethantwiceashighasthoseofmostotheremergingcountriesatthesamelevelofGDPpercapita.Figure5China’sCO2emissionspercapita12Figure6ComparisonofChina’sCO2emissionspercapitainrelationtoglobalandEU27emissionsFigure7ComparisonofChina’sCO2emissionsperunitofGrossdomesticproduct(GDP)inrelationtootherregions13Figure8CO2emissiontrajectoriesoffast-growingeconomies143PathwaystocarbonneutralityforChinaandtheworld3.1OverviewMeetingthegoaloftheParisAgreementtolimitglobalwarmingwellbelow2°Crequiresaddressingtheworld’senergysystems,industry,agricultureandlanduse,amongotherthings.Themosteffectiveandcost-efficientwaystoexplorewidespreadsystemschangecanbeprojectedusingavarietyofmodelsthatincorporateinformationaboutthedemandforgoodsandservices,productiontechnologies,andtheircosts,aswellasavailableresources.Mostimportantly,themodelsprovideconsistentandphysicallyandeconomicallyplausiblepathwaysformeetingtheneedsoftheglobaleconomyforenergy,goods,servicesandcommoditieswhilerespectingthegoalsoftheParisAgreement.TocapturetherangeofpathwaysandsolutionsavailableforChinaandtheworld,wehavecompiledasuiteofclimatetransitionscenariosconsistentwiththeParisAgreementpreparedbythefollowingresearchinstitutions:CentralBanksandSupervisorsNetworkforGreeningtheFinancialSystem(NGFS);ClimateActionTracker(CAT);InternationalEnergyAgency(IEA);InstituteofClimateChangeandSustainableDevelopment(ICCSD)ofTsinghuaUniversity;SchoolofEnvironmentandNaturalResources;RenminUniversity(SENR-RMU);InstituteofAtmosphericEnvironment;ChinaAcademyofEnvironmentalPlanning(CAEP-IAE)andElectricPowerPlanningandEngineeringInstitute(EPPEI);NorthChinaElectricPowerUniversity(NCEPU)andPekingUniversity(PKU);andEnergyFoundationChina(EFC)andCenterforGlobalSustainabilityattheUniversityofMaryland(CGS-UMD).Theseclimatetransitionscenarioscanserveasframeworkstosupportpolicymakersinevaluatingtheimpactsofdifferentpolicyapproachesontechnologychoicesandtheirimplicationsforenergyandemissionstrends.Wehaveidentifiedasetofindicators,suchasinstalledcleanenergycapacityortransportoilconsumption,thatcanbecomparedagainsthistoricaldataandusedtomeasureprogressinamuchmoregranularandforward-lookingfashionthanasimplelookattheannualchangeinemissionswouldpermit.Wehaveconvertedthescenariodataintobenchmarksforeachindicatorthatallowustoassesswhetherthatparticularindicatorisalignedwiththeclimatetransitionscenarios.Whiledifferentproposalsandscenariosdifferincertaindetails,therearealsoclearsimilarities.Inallscenarios,thebasicformulafordecarbonisingChina’senergysystemistoreplacemuchofthefossilfuelusedinindustry,transportandhouseholdswithelectricity,andtoproducethatelectricityfromcleanenergysources.This,inturn,requiresanenormousexpansionofcleanelectricityproduction.Themajorityofthisexpansionisdeliveredbywindandsolar.Allscenariosprojectonlyamodestexpansioningas-firedcapacity.Enhancementofforestcarbonsequestrationandotherlandcarbonsinksisalsoimportantacrossscenarios.Akeyunderlyingassumptionforemissionsscenariosistheassumedorprojectedrateofeconomicgrowth.Allpathwaysincludedinthisreportassumeanaveragegrowthrateof5.0–5.5%between2020and2030,makingthemdirectlycomparableinthisregard.Thisrateisslightlylowerthanthe6–7%15growththatChinareportedin2015–2019,butfasterthantheaveragefor2020–2023,giventhecurrentWorldBankprojectionfor2023of5.6%(andthereforetheaveragefor2020-2023wouldbe4.8%).18Globalpathways,intermsofIEA,NGFSandCAThaveupdatedclimatetransitionpathwaysadjustedforeconomicprojectionstothelatesthistoricalyearofpublication.Recently,however,China’sgrowthforecastshavebeenreviseddownduetothesluggishpost-reopeningrecovery.Forexample,theIMFprojects5.0%for2023,4.2%for2024,andlessthan4.0%for2027–2028,furtherloweringtheaverageprojectedGDPgrowthrate.19Thescenariosdifferintermsoftheirprojectionsoftotalenergydemandgrowth,andintheroleofnuclearpower,carboncaptureandstorage(CCS),biomass,fossilgas,andcoal-firedpower.TheICCSDseesalargersharefornuclearpowerthanotherscenarios,whiletheNCEPUandPKUincludemorethermalpowerthanotherscenarios.Someofthepathways,suchasthosepreparedbytheCAT,theCAEPandtheEPPEI,donotconsiderCCSatechnologicallymatureandcost-effectivesolutiontoreduceCO2emissions.Thatviewpointisincontrasttoothers,suchastheICCSD,NCEPU,andtheSENR,whoseeCCSappliedtofossilemissionsasoneoftheroutestodecarbonisethepowersector,aswellascarboncaptureandstorageappliedtobioenergyasawaytoachievenegativeemissionsandoffsetemissionsfromothersectors.TheinternationalscenariosfromtheIEAandunderlyingIntergovernmentalPanelonClimateChange(IPCC)worktendtoassumethatmuchoftheeconomicpotentialforenergyefficiencycanbeexploited,resultinginloweroverallenergydemand.ConsideringthatChinahadacceleratedcoalpowerapprovalsbetween2021and2022,theIEAincreasedtheshareofcoalpowergenerationtoadapttothenewrealityandprojectedthatChinawillnotfullyquitcoalpowerby2050aswasprojectedin2021’sedition.TheICCSDscenariosfactorinstructuralchangeintheeconomyandenergyefficiencypotential,resultinginlowprojectionsfortotalenergydemand.TheEFC&CGS-UMDscenariosbasedonsixdifferentmodelsproducedresultsoverawiderange,coveringtheresultsprojectedbytheotherscenarios.Amongthem,theAIM-ChinaandMESSAGEix−ChinamodelsweightedheavilyonnuclearpowerasthedominatingenergyforChina’spowergeneration,followedbysolarandwind,whicharethedominatingenergyintheothermodels.TheSENRscenariosseeasignificantroleforfossilgasoutsidethepowersectorinthenextdecade,withgasconsumptioncontinuingtogrowatthesamerateasinthepastfewyearsuntil2030.TheIPCCandIEAscenarios,incontrast,projectasharpslowdowningasconsumptiongrowthoverthe2020s.However,withineachscenariofamily,thescenariostargetinglowerglobaltemperatureincreaseshaveslowergrowthormorerapidreductioninfossilgasuse.ApartfromtheICCSD,mostscenariospublishedinChinadon’tcoverothergreenhousegasesbesidesCO2,orgivethemcursorytreatmentatmost.Ithasn’tbeenspecifiedwhetherthecarbonneutralitytargetshouldbeunderstoodtocoverallgreenhousegasesoronlyCO2,withofficialstatementsbeingmadebothways.Becauseofthesparsityofdatabothonemissionsandontheviabilityandcostsofmitigationoptions,estimatesoftheemissionsreductionpotentialvarywidely.It’sevidentthatatargetcoveringallgreenhousegaseswouldrequiredeeperreductionsinCO2emissionsbecauseitwon’tbeplausibletoreducetheemissionsoftheothergasestozeroandtherearenoforeseeable18TheWorldBank.(Jun2023).PriorityReformsKeyforSustainingGrowthandAchievingChina’slong-termgoals-WorldBankReport.https://www.worldbank.org/en/news/press-release/2023/06/14/priority-reforms-key-for-sustaining-growth-and-achieving-china-s-long-term-goals-world-bank-report.Researchreport.19InternationalMonetaryFund.(Oct2023).People’sRepublicofChina:CountryData.https://www.imf.org/en/Countries/CHN.Database.16solutionstoachievenegativeemissionsfortheothergaseswhoseconcentrationsintheatmospherearefarlowerthanthoseofCO2(seesection4.2onnon-CO2greenhousegases).3.2GlobalpathwaysSignificantresearchandmodellingisbeingconductedbyinternationalorganisationsanduniversitiestodeveloppathwaysunderdifferentscenariostoachievecarbonnetzeroemissions.WorkbyNGFS,CAT,andIEAhasbeenselectedforthisreport.TheNGFS’sdelayedactionscenariosforecastrapidcarbonreductionsafter2030,whichissimilartoChina’stwo-stagedevelopment(seesection3.3.1).DatafromCATandIEAaretheirprojectionsforChina.Table1OverviewoftheglobalscenariosincludedInstituteScenarioSourceIEAAnnouncedPledges(APS)WorldEnergyOutlook2022https://www.iea.org/reports/world-energy-outlook-2022NGFSDelayedtransitionhttps://www.ngfs.net/ngfs-scenarios-portal/data-resources/NGFSBelow2°Chttps://www.ngfs.net/ngfs-scenarios-portal/data-resources/NGFSNetZero2050CAT1.5degreeshttps://www.ngfs.net/ngfs-scenarios-portal/data-resources/CAT2degreeshttps://climateactiontracker.org/countries/china/;https://climateactiontracker.org/publications/paris-aligned-benchmarks-power-sector/https://climateactiontracker.org/countries/china/3.2.1CentralBanksandSupervisorsNetworkforGreeningtheFinancialSystem(NGFS)TheCentralBanksandSupervisorsNetworkforGreeningtheFinancialSystem(NGFS)isagroupthatcontributestothedevelopmentofenvironmentandclimateriskmanagementinthefinancialsector.AlongwithanacademicconsortiumfromthePotsdamInstituteforClimateImpactResearch(PIK),InternationalInstituteforAppliedSystemsAnalysis(IIASA),UniversityofMaryland(UMD),ClimateAnalytics(CA),ETHZürich(ETHZ),andtheNationalInstituteofEconomicandSocialResearch(NIESR),thegrouphasdevelopedasetofglobaltransitionpathwaysforanalysingclimateriskstotheeconomyandfinancialsystem.Thepathwaysaredividedintoeconomicsectorsandgeographicregionsandhavebeengeneratedwiththreewellestablishedintegratedassessmentmodels(IAMs),namelyGCAM,MESSAGEix-GLOBIOM,andREMIND-MAgPIE.ThescenarioswereincludedintheSixthAssessmentReport(AR6)oftheIntergovernmentalPanelonClimateChange(IPCC).TheNGFSprovidescountry-leveldataforsixdifferenttransitionscenariosbasedontheIPCCsocioeconomicpathwaysandthelatestInternationalMonetaryFund(IMF)economicforecasts.Thepathwaysdifferintheirlevelofambition,resultingindifferentlevelsofglobalwarming,andinhoworderlythetransitionis.Delayedactionscenariosseeaslowerstarttoreducingemissionsinthe2020sandconsequentlyrequiremuchmorerapidemissionsreductionsafter2030.Weusethedelayed17transitionscenario,compatiblewiththe2°Ctemperaturegoal,butnotwiththe1.5°Cgoal,asthebenchmarkforChina’stransition,asthispathwaymostcloselyresemblesChina’scarbonneutralityplan.Thescenarioassumesthatglobalemissionsdon’tfallbefore2030,andthenrequiresveryrapidreductionsafter2030topreserveamorethan50%chanceofstayingbelow2°C.Thescenarioisexpectedtoresultinapproximately1.6°Cwarmingbytheendofthedecade(90%confidenceinterval:1.2°Cto2.4°C).Chinahasnotmadeexplicitcommitmentsabouttherateofemissionsreductionsinthedecadesfollowingthepeak,otherthanreachingcarbonneutralityby2060,butthegoaloftheParisAgreementrequiresrapid,front-loadedreductionsafter2030.ThelatestsetofNGFSscenarioswaspublishedinSeptember2022,entailingupdatedscenariosadjustedfornewGDPprojections,newpolicypledgesandtargets,andnewmodelversionsonanumberoftechno-economicparameters20.Figure9Emission,concentration,andwarmingpathwaysinChina20NGFSClimateScenariosDatabase.(Sep2022).TechnicalDocumentationV3.1.https://www.ngfs.net/sites/default/files/media/2022/11/21/technical_documentation_ngfs_scenarios_phase_3.pdf.Database.183.2.2ClimateActionTracker(CAT)Usingthe1.5°CscenariointheIPCC2018specialreport,GlobalWarmingof1.5°C21,withtheInternationalEnergyAgency’s2015dataasthebaseyear,in2020,theClimateActionTrackerpublishedthereport,ParisAgreementCompatibleSectoralBenchmarks22,todefineandanalyseaseriesofbenchmarksfor2030and2050acrossfourmajorsectorsatthegloballevel:power,transport,industryandbuildings.SixcountriesandtheEUwereselectedforfurtheranalysis:Brazil,China,India,Indonesia,SouthAfrica,andtheUS.InSeptember2023,CATpublishedCleanelectricitywithinageneration:Paris-alignedbenchmarksforthepowersector23,inwhichitprovidesbenchmarkscompatiblewith1.5°Cforthepowersectorbothatthegloballevelandfor16selectedcountries.Chinaandtheother15countrieswereselectedbasedontheirshareofglobalpowergeneration,scaleofpowersectoremissions,geopoliticalimportance,andgeographicandeconomicdiversity.CATprovidesbenchmarksforthefuturesharesofcoal,fossilgasandrenewables,andemissionintensityinpowergeneration.ThebenchmarkswerederivedbydownscalingthelatestglobalpathwaysassessedbytheIPCC,andanin-depthliteraturereviewofnationalstudiesonpowersystemsmodelling.3.2.3InternationalEnergyAgency(IEA)TheInternationalEnergyAgency(IEA)assessmenthasafocusonenergybutalsocoversindustry,transport,andbuildingsectors.Thepowersectoristhesinglelargestsourceofenergy-relatedCO2emissions.Decarbonisingtheenergysystemisimportanttoachievethegoaloflimitingtheglobalannualaveragetemperatureincreaseto1.5°C.Atthesametime,decarbonisingothersectorsthroughelectrificationreliesonelectricityfromcarbon-freepowergenerationsources.TheIEAhaspublishedacollectionofreportsexaminingthetechnologiesandpoliciesneededforcountriesandregionstoachievenet-zeroemissionsinenergysystems.TheIEA’sflagshipreportWorldEnergyOutlook(WEO)analyseswhatwouldbeneededovertheperiodupto2030toputtheworldonapathtowardsnet‐zeroemissionsby205024.WeusetheWEOAnnouncedPledgesScenario(APS)asthebenchmarkforChinabecausethenetzeroscenariodoesnotincludedisaggregatedprojectionsforChina.APSassumesthatallaspirationaltargetsannouncedbygovernmentsaremetontimeandinfull,andthusisinlinewithChina’slong-termcarbonneutralitygoal.ComparedwithWEO2021,theprojectionofabiggeremissionsreductionisseenintheAPSofWEO2022,reflectingupdatedNDCsandannouncednetzeroemissionspledgesthathavebeenmadeoverthepastyear.21IPCC.(2018).GlobalWarmingof1.5°Chttps://www.ipcc.ch/sr15.Specialscientificreport.22ClimateActionTracker.(2020).ParisAgreementCompatibleSectoralBenchmarks.https://climateactiontracker.org/documents/753/CAT_2020-07-10_ParisAgreementBenchmarks_FullReport.pdfAnalyticalreport.23ClimateActionTracker.(2023).Cleanelectricitywithinageneration:Paris-alignedbenchmarksforthepowersector.https://climateactiontracker.org/documents/1159/CAT_2023-09-19_Briefing_ParisBenchmarks_PowerSector.pdf.Researchreport.24IEA.(2021).WorldEnergyOutlook.https://www.iea.org/topics/world-energy-outlook.Researchreport.193.3PathwaysforChinaTranslatingtheinternationalgoaloflimitingglobalwarmingto1.5°Ctoemissiontargetsandpathwaysforindividualcountriesisacomplex,andoftencontentious,challenge.Differentcountriesandresearchersemphasisecountries’currentpercapitaemissions,levelofeconomicdevelopmentandpercapitaincome,historicalresponsibility,andcapacitytoact,asthekeydeterminantsofhowlargearesponsibilitythedifferentcountriesshouldbeassigned.GivenChina’sshareofglobalemissions,almostone-quarter,andChina’sdominantroleintheincreaseofglobalemissions,peakingemissionsandreachingcarbonneutralityaremathematicalnecessitiesiftheglobalgoalsaretobemet.AftertheannouncementofthecarbonneutralitytargetinSeptember2020,numerousChineseresearchinstitutionshaveunveiledtheirproposalsorpathwaystomeetthetarget.We’vecompiledarepresentativeselectionofpathwaystoformthebasisforthisreport,showninTable2.ThefirstoneswerepublishedsoonaftertheinitialannouncementbyTsinghuaprofessorsHeJiankunandZhangXiliangandtheteam.Theirworkisbelievedtohaveinformedtheinitialdecisiontosetthecarbonneutralitytarget,andthechoiceofthetargetyear,whileChina’sclimateenvoyXieZhenhua,whowasinfluentialinconvincingtheleadershiptoadoptthetarget,actedasanadvisortotheproject.Assuch,thesescenariosaretheclosesttoanofficialplanthatexistedatthetimeoftheannouncement.NootherChineseresearchisascomprehensiveasthatoftheICCSDanditoftentendstofocusononesector.Morerecentworkreflectschangesinenergytrendsandthepolicyenvironmentsincetheannouncement.Table2OverviewoftheincludedscenariosbyChineseresearchersInstituteScenarioSource1.5degreesInstituteofClimateChangeChina’sLong-TermLow-CarbonDevelopmentandSustainableStrategiesandPathwaysDevelopment(ICCSD)https://www.efchina.org/Reports-en/report-lceg-20210711-enInstituteofClimateChange2degreesandSustainableChina’sLong-TermLow-CarbonDevelopmentDevelopment(ICCSD)StrategiesandPathwayshttps://www.efchina.org/Reports-en/report-lceg-20210711-enSchoolofEnvironmentand1.5degreesWangK(2021)ResearchonChina’scarbonNaturalResources(SENR),emissionspathwayunderthe1.5°CtargetRenminUniversityhttp://www.climatechange.cn/CN/10.12006/j.issn.1673-1719.2020.228SchoolofEnvironmentand2degreesWangK(2021)ResearchonChina’scarbonNaturalResources(SENR),emissionspathwayunderthe1.5°CtargetRenminUniversityhttp://www.climatechange.cn/CN/10.12006/j.issn.1673-1719.2020.228NorthChinaElectricPowerAcceleratedelectrificationPathwaysandPolicyforPeakingCO2EmissionsUniversity(NCEPU)andwithdiversepowermixinChina’sPowerSectorPekingUniversity(PKU)(shortenedtohttps://mp.weixin.qq.com/s/AUXybE5neN-jxCah“Accelerated”inthe7APZoAgraphs)20InstituteScenarioSourceNorthChinaElectricPowerContinuedelectrificationPathwaysandPolicyforPeakingCO2EmissionsUniversity(NCEPU)andledbynewenergyinChina’sPowerSectorPekingUniversity(PKU)(shortenedto“Newhttps://mp.weixin.qq.com/s/AUXybE5neN-jxCahEnergy”inthegraphs)7APZoAInstituteofAtmosphericBaselinescenario:highPathwaysofcarbonemissionpeakinChina'sEnvironment,ChinaAcademyelectricitydemand,electricpowerindustryofEnvironmentalPlanningenergymixtrendasthehttp://www.hjkxyj.org.cn/en/article/doi/10.1319(CAEP-IAE)and13thFive-YearPlanof8/j.issn.1001-6929.2021.11.24ElectricPowerPlanningandChina(FYP)EngineeringInstitute(EPPEI)InstituteofAtmosphericLowcarbonscenario:highPathwaysofcarbonemissionpeakinChina'sEnvironment,ChinaAcademyelectricitydemand,electricpowerindustryofEnvironmentalPlanningmaximiseRE,lowercoal(CAEP-IAE)andElectricPowerconsumptionhttp://www.hjkxyj.org.cn/en/article/doi/10.1319PlanningandEngineering8/j.issn.1001-6929.2021.11.24Institute(EPPEI)InstituteofAtmosphericStrengthenedscenario:PathwaysofcarbonemissionpeakinChina'sEnvironment,ChinaAcademylowelectricitydemand,electricpowerindustryofEnvironmentalPlanningmaximiseRE,lowercoal(CAEP-IAE)andElectricPowerconsumptionhttp://www.hjkxyj.org.cn/en/article/doi/10.1319PlanningandEngineering8/j.issn.1001-6929.2021.11.24Institute(EPPEI)EnergyFoundationChinaBasedonupdatedNDCSynthesisReport2022onChina'sCarbon(EFC)andCenterforGlobalNeutrality:ElectrificationinChina'sCarbonSustainabilityattheNeutralityPathwaysUniversityofMaryland(CGS-UMD)https://www.efchina.org/Reports-en/report-snp-20221104-en?set_language=en21Figure10TotalprimaryenergyconsumptioninChinain2050bypathwayFigure11InstalledpowergenerationcapacityinChinain2050bypathway223.3.1InstituteofClimateChangeandSustainableDevelopment(ICCSD)Sincethebeginningof2019,theInstituteofClimateChangeandSustainableDevelopment(ICCSD)ofTsinghuaUniversityhasbeencooperatingwithmorethantenChineseresearchinstitutestoundertakearesearchproject,China'sLong-TermLow-CarbonDevelopmentStrategiesandPathways,with18sub-projects.Theresultsweredeliveredasacomprehensivereportpublishedin202125.TheICCSDstudysplitsChina'slong-termlow-carbontransitionpathwayintotwostages.Thefirststage,from2020to2035,willfocusonimplementingandstrengtheningthenationallydeterminedcontributions(NDCs)totheParisAgreementofemissionreductioninlinewiththesocialandeconomicdevelopmentgoals.Thesecondstage,from2035to2050,willachievethegoalofdeepdecarbonisationofenergyandeconomyandbuildingastrongmodernsocialistcountrywhilealigningemissionreductionpathwayswithglobalwarmingcontroltargetsof2°Cand1.5°Cby2050.Thereportanalysedemissionsreductionpathways,technologysupport,cost,andpricesdrivenbythelong-termdecarbonisationgoal.Thestudywasbasedonfourscenarios,namely,policyscenario,reinforcedpolicyscenario,2°Cscenario,and1.5°Cscenario.Weselect1.5°Cscenarioand2°CscenariodataforthisreportwhichareinlinewiththeParisAgreementandglobalnetzerogoals.The2°Cscenarioisbasedonthegoalofcontrollingglobalwarmingtowithin2°CwithpercapitaCO2emissionsnotexceeding1.5tonnesby2050(downfrom8.4tonnesin2020).The1.5°Cscenarioisbasedonthegoalsoflimitingtheglobalannualaveragetemperatureriseto1.5°CandachievingnetzeroCO2emissionsanddeepreductionsofotherGHGsemissionsby2050.Both1.5°Cand2°CscenariosareidealscenariosrequiringarapidshiftinChina’senergysystemsandeconomicdevelopmentpatterntoalignwiththenear-termemissionreductionrates.Consideringpractical,economicandpoliticalchallengesinpeakingemissionsimmediately,theICCSDfurtherintroducestarget-oriented(laterpeak)variantsofthe1.5°Cand2°Cscenarios26,whichassumesthatCO2emissionsonlypeaklateinthedecadetoallowfortheprioritisationofeconomicgrowthduringthisdecadeandamoregradualshiftinthepatternofeconomicgrowth(termed‘two-stage’development).ThesepathwaysenvisionanenhancedversionofChina’scurrentParisagreementpledges(NDCs)until2030,acceleratingcarbonreductionandenergysystemstransitionfrom2030,andachievingnetzerocarbonemissionsby2050.3.3.2SchoolofEnvironmentandNaturalResources,RenminUniversity(SENR-RMU)Accordingtothedeepemissionsreductionrequirementsandtechnicalcharacteristicsofthe1.5°Ctarget,WangKeetal.attheSchoolofEnvironmentandNaturalResources,RenminUniversity,modifiedtheexistingenergysystemmodelPECE-LIU2020byaddinghydrogenandbioenergywithcarboncaptureandstorage(BECCS)energymodules.Usingtheupgradedmodel,theteamstudiedChina’slong-termCO2emissionsreductionrequirements,sectoralcontributions,andkeyemission25ICCSD,(2021).China'sLong-TermLow-CarbonDevelopmentStrategiesandPathways,ComprehensiveReport.https://link.springer.com/book/10.1007/978-981-16-2524-4.Studyreport.26He,J.etal.(2022).Towardscarbonneutrality:AstudyonChina'slong-termlow-carbontransitionpathwaysandstrategies.EnvironmentalScienceandEcotechnology,9,100134.https://www.sciencedirect.com/science/article/pii/S2666498421000582.Scientificarticle.23reductionmeasuresunder1.5°Cand2°Cscenarios27.Theconceptof1.5°Cand2°CscenariosalignwiththeIPCC.ButthepathwaysaresetbasedonChina’scircumstances.SimilartotheICCSD’stwo-stagetransition,underthe2°Cscenario,ChinawilltakeenhancedemissionsreductionmeasuresbasedontheexistingNDCtarget,strivetoachievepeakcarbonemissionsassoonaspossible,andstrengthenpoliciestoacceleratethedeclineofemissionstomeetChina’semissionsreductiontargetby2050.Underthe2°Cscenario,alreadymaturedanddemonstrationstagelow-carbontechnologies,includingelectricvehicles,windandsolar,willbedevelopedrapidly.Demonstrationofcarboncapture,utilisationandstorage(CCUS)technologywillbeacceleratedtopreparefordeploymentafter2030.Underthe1.5°Cscenario,toachieveamorestringentcarbonreductiontarget,Chinawillpeakcarbonemissionsassoonaspossibleandalsoacceleratecarbonreductiontothe1.5°Ctargetsby2050.Chinaneedstoacceleratetechnologyrenovationandinnovation,rapidlydevelophydrogenandBECCStechnologies,improveenergysystemefficiencyanddeepdecarbonisesteel,chemicalengineering,roadcargoandpowersectors.Both1.5°Cand2°CscenariosrequireChinatoenhancecarbonreductionandreachpeakcarbonbefore2025.Withreferencetothe2005milestone,73%and75%carbonreductionby2030areneededfor2°Cand1.5°Cscenarios,respectively.3.3.3InstituteofAtmosphericEnvironment,ChinaAcademyofEnvironmentalPlanning(CAEP-IAE)andElectricPowerPlanningandEngineeringInstitute(EPPEI)TheInstituteofAtmosphericEnvironment,ChinaAcademyofEnvironmentalPlanning,andChinaElectricPowerPlanningandEngineeringInstitutejointlyestablishedaprojectionmodelandinfluencingparameters/factorstostudythepathwayforChina’spowersectortopeakcarbonemissionsunderdifferentscenarios.Theinfluencingparametersincludeeconomicandsocialdevelopment,electricitydemand,powersourcestructureandstandardcoalconsumptionrateforpowergeneration.Threescenariosarelaidout28,asfollows.Baselinescenario:Thepowerstructurewillremainthesameasduringthe13thFive-YearPlan(FYP)period(2016–2020)tomeetahighrateofpowerdemandgrowth.Improvementinthethermalefficiencyofcoal-firedpowerplantsstopsandisfrozenatthecurrentlevel.Lowcarbonscenario:Tomaintainahighrateofpowergenerationgrowth,itisessentialtomaximisenon-fossilfuelenergypowergenerationwithinthelimitssetbythepotentialofdifferentelectricitygenerationsources,constructionperiod,energypricesandotherfactors.Thethermalefficiencyofcoal-firedpowerplantswillfallatthesamerateasduringthe13thFYPperiod,resultinginareductioninstandardcoalconsumptionof2g/kWhperyear.Takingintoaccountthemoreflexibleoperationofthermalpowerplantsrequiredtoaccommodatenon-fossilenergysources,whichtendstoreducethethermalefficiencyofgeneration,itisassumedthatcoalconsumptionforpowergenerationwillfallby27Wang,K.etal.(2022).ResearchonChina’scarbonemissionspathwayunderthe1.5°Ctarget.http://www.climatechange.cn/CN/10.12006/j.issn.1673-1719.2020.228.Researcharticle.28Wang,L.etal.(2022).PathwayofcarbonemissionpeakinChina′selectricpowerindustry.ResearchofEnvironmentalSciences,35,329–338.doi:10.13198/j.issn.1001-6929.2021.11.24.Researcharticle.241g/kWhannuallyandreach286,280,and275g/kWhin2025,2030,and2035respectively,downfrom289g/kWhin2020.Strengthenedscenario:Thethermalefficiencyimprovementsofcoal-firedpowerplantsfollowthelowcarbonscenario,andpowergenerationfromnon-fossilfuelsismaximised.Inaddition,measuresaretakentoreducethegrowthrateofelectricitydemand.3.3.4NorthChinaElectricPowerUniversity(NCEPU)andPekingUniversity(PKU)TransitionpathwaysdevelopedbytheNorthChinaElectricPowerUniversityandPekingUniversityarebasedontheunderstandingthatChinawillpeakCO2emissionsin2030andthepowersectoristhecriticalplayerinthismission.Combiningthetrendsofvariousmacroeconomicindicators,ProfessorYuanandhisteamestimatethatChina’snationalelectricitydemandfortheperiodof2021to2035willbedrivenbyelectrificationinthepower,industry,buildingandtransportsectors29.Tomeettheelectricitydemandunderdifferentelectrificationprocesses,threepathwaysaresetuptodiscussthepossiblesituationsthelowcarbonpowersystemtransformationmayfaceandpathwaysforthepowersectortopeakcarbonemissions.Thecarbonpeaktimeunderdifferentscenariosisprojected.Weselectedthe“Acceleratedelectrificationwithdiversepowermix”and“Continuedelectrificationledbynewenergy”pathwaysforourreport,shortenedto“Accelerated”and“NewEnergy”.NCEPandPKUrecommendthe“Accelerated”pathwayasthemosteffectiveapproachtopeakemissions.Undertheacceleratedelectrificationscenario,targetsofmorethan50%ofnon-fossilfuelintheelectricitymixand1200GWwindandsolarinstallationsby2030aremet.Coalpowergenerationwillpeakin2025at5,200TWh,upfrom4900TWhin2020.Theroleofcoalpowerchangesfromthemainstayofpowergenerationtoasupportingsourceofgenerationfornon-fossilenergy.Underthisscenario,carbonemissionsfromthepowersectorwillpeakaround2025.3.3.5EnergyFoundationChina(EFC)andCenterforGlobalSustainabilityattheUniversityofMaryland(CGS-UMD)LedbyEnergyFoundationChina,andcoordinatedbytheCenterforGlobalSustainabilityattheUniversityofMaryland,UnitedStates,withcontributionsfrom21expertauthorsfromnineresearchorganisations,themulti-teamresearchconducteddeepdivesintodecarbonizingtheelectricitysectortoachieveChina’scarbonneutralitytarget.IntheSynthesisReport2022onChina’sCarbonNeutrality:ElectrificationinChina’sCarbonNeutralityPathways30,theroleofelectrificationandassociatedelectricitysystemtransformationinachievingChina’s‘30/60’goalswereidentified,basedonsynthesisedanalysesonanumberofnationalandglobalmodels,includingChinaDREAM,China29Yuan,J.etal.(2021)PathwaysandpolicyforpeakingCO2emissionsinChina’spowersector.https://mp.weixin.qq.com/s/AUXybE5neN-jxCah7APZoA.Researcharticle[inMandarin].30EnergyFoundationChina.(Nov2022).SynthesisReport2022onChina'sCarbonNeutrality:ElectrificationinChina'sCarbonNeutralityPathways.https://www.efchina.org/Reports-en/report-snp-20221104-enResearchreport.25TIMES,GCAM-China,MESSAGEix-China,AIM-China,PECE_LIU_2021,andPECEV2.0.Twoscenarios,‘UpdatedNationallyDeterminedContribution(NDC)ToCarbonNeutrality’and‘OriginalNDCtoCarbonNeutrality’wereexploredinthisreport.Weusetheaverageoftheresultsfromthesevenmodelsasourbenchmark.UndertheUpdatedNationallyDeterminedContribution(NDC)toCarbonNeutralityscenariothatweincludedinourreport,netzerogreenhousegasemissionswillbeachievedby2060,andChina’semissionswillpeakbefore2030inlinewiththeupdatedNDCsubmittedbyChinainOctober2021.ItdiffersfromtheoriginalNDCscenariointhattheoriginalNDCscenarioassumesChina’sCO2emissionsdonotpeakearlierthan2030.264MeasuringandbenchmarkingChina’sprogressTobaseChina’sentireeconomyoncarbonneutralemissionswillrequireprogressonnumerousfronts:fromcleanelectricityproductiontoelectrification,frommoderatingenergydemandgrowthtoshiftsinproductionprocesses,andtransportmodes.Thetransitionpathwaysallowustotranslatethemassiveundertakingintomorespecificchangesrequiredineachkeyemittingsector.ThissectioncomparesthedevelopmentofChina’semissions,energymix,installedpowergenerationcapacity,electrificationratioandotheressentialindicatorstobenchmarksderivedfromdifferenttransitionpathways.Theapproachwetakeistoassesstheannualchangeineachindicatoragainsttherequiredrateofchangefrom2020to2030indifferentpathways.Weassesswhethertheindicatorsareeitheralreadyinlinewiththebenchmarksoraremakingprogresssothatthebenchmarksarelikelytobemet.Theassessmentisdesignedsothatwecanrepeatitannuallyandprovideanupdateofprogress.4.1TotalCO2emissions2023highlights●ThecentralgovernmenthasreleasedtheOpinionsonAdvancingtheTransitionfromDualControlofEnergyConsumptiontoDualControlofCarbonEmissions.●ThedevelopmentoftheCarbonEmissionMRV(Monitoring,Reporting,andVerification)andAccountingSystemisfundamentaltotheimplementationofDualControlofCarbonEmissions.●TheEcosystemCarbonSinkEnhancementPlanwaslaunchedtoassessChina’secosystemcarbonstoragebaseline,identifypotentialforincreasedcarbonsink,andestablishaninternationally-alignedcarbonsinkmeasurementsystem.●CarbontradingisexpectedtoexpandbeyondthepowersectortoincludeotherindustriesandCCERisexpectedtobere-launchedbytheendof2023.●Strongsupportforlowcarbonandzerocarbontechnologies.Tobeconsistentwiththe1.5°Cdegreetarget,evenassumingveryaggressiveemissionsreductionsafter2030,China’sCO2emissionsshouldreachtheirpeakby2025.Consideringpractical,economic,andpoliticalchallengesinpeakingemissionsimmediately,theICCSDfurtherintroduced“target-oriented”(laterpeak)variantsofthe1.5°Cand2°Cscenarios31,whichassumesthatCO2emissionsonlypeaklateinthedecadetoallowfortheprioritisationofeconomicgrowthduringthisdecadeandamoregradualshiftinthepatternofeconomicgrowth(termed“two-stage”development).ThesepathwaysenvisionanenhancedversionofChina’scurrentParisAgreement31He,J.etal.(2022).Towardscarbonneutrality:AstudyonChina'slong-termlow-carbontransitionpathwaysandstrategies.EnvironmentalScienceandEcotechnology9,100134.https://www.sciencedirect.com/science/article/pii/S2666498421000582.Scientificarticle.27pledges(NDCs)until2030,acceleratingthecarbonreductionandenergysystemstransitionfrom2030,andachievingnetzerocarbonemissionsby2050.These‘laterpeak’pathwaysarelessambitiousoverthenextdecadethanthe1.5°Cand2°Cscenarios.Forexample,theICCSD1.5°Ctarget-orientedscenarioseesCO2emissionspeakat10.4billiontonnesby2025,upfrom10.2billiontonnesin2020,andstayatthesameleveluntil2030,droppingsharplyto1.7billiontonnesby2050,almostconvergingtothe1.5°Cpathwayinthefollowingdecades,butwithhighercumulativetotalemissions(Table3).Forthe“ideal”1.5°Cand2°Cscenarios,CO2emissionsshouldpeakin2020at10.2billiontonnesandfallto7.4and1.5billiontonnesand9.4and2.9billiontonnes,respectively,by2030and2050.WiththehelpofCCUSandagroforestrycarbonsinks,thiswouldallownetzeroCO2emissionstobeachievedby2050.Table3CO2emissionsundertheICCSD1.5°C,1.5°Ctarget-orientedand2°Cpathways(Heetal.,2022)202020252030203520402045205010.29.34.22.71.51.5°C7.46CO2emissions,billiontCO21.5°Ctargetoriented10.210.410.47.7531.72°Cscenario10.210.19.48.16.44.32.91.5°C1.5°Ctargetoriented4.37.18.98.510.311.314.32°CscenarioAnnualdeclineofCO24.34.14.18.29.31010.4emissionsperunitofGDP,%4.35.56.17.28.410.710.11.5°C50.665.878.586.29295.698Declinefrom2005level,%1.5°Ctargetoriented50.660.368.481.3909597.62°Cscenario50.662.872.881.287.993.196284.1.1TrendscomparedtobenchmarksFigure12AnnualchangeinCO2emissionscomparedtoenergytransitionpathwaysChina’sCO2emissionsgreweveryyearfrom2016to2021,albeitatamuchslowerpacethanCO2emissionsupto2013.TheincreaseinCO2emissionsreversedinthesummerof2021,resultinginafallinCO2emissionsin2022,althoughthereisstilluncertaintyaboutthemagnitudeofthefall.Therewasanotherupswinginemissionsin2023duetoadropinhydropowergenerationduetodroughtsandareboundinemissionsfollowingCOVID-19.Alltransitionpathwaysrequireemissionstofallfrom2020to2030,implyingapeakwellbefore2030andemissionsreductionsthereafter.Inalltransitionpathways,emissionsreductionsneedtoacceleratesignificantlyfromtheratesprojectedfor2020–2030immediatelyafter2030tomeettheirtemperaturetargets.OurprojectedCO2emissionsgrowthratefor2022to2023isnear-zero,makingprogresstowardstheannualreductionsrequiredintheParisAgreement-alignedpathways.4.1.2PoliciesinplaceTheincreaseinCO2emissionsiscurrentlyconstrainedbytheCO2intensityandnon-fossilenergytargetsfor2025and2030,theenergyintensitytargetfor2025andthecommitmenttopeakCO2emissionsbefore2030.Thetargets,however,leaveroomforasubstantialincreaseinCO2emissionsfrom2020to2030,ofupto15%,assuminga5%averageGDPgrowthratein2021–2030.Emissionscouldincreaseevenmorebythelate2020sandthenfalltomeetthepeakingtargetandthe2030targets.Therearenonumericaltargetsinplacefortherateofemissionsreductionsafterthepeak,leavingthetrajectoryofemissionsfromthepeaktocarbonneutralitysometimebefore2060wide29open.TheabsenceoftargetsmakeitdifficulttopredictChina’scumulativeemissionsinthenextdecadesandtomeasurewhetherthecountryisontracktoachievethecarbonneutralitytarget.Figure13IndicativeemissionspathwaysforChinaDatasources:CO2emissionsuntil2020fromBPStatisticalReviewofWorld’sEnergy;CREAanalysis.China’scurrentclimatecommitmentsallowawiderangeofCO2emissionsoutcomes.Thepathwaylabelled“minimumrequiredbytargets”showsthehighestpossibleemissionspathwaythatChinacouldfollowwhilemeetingthe2025and2030CO2intensitytargetsandthecommitmenttopeakemissionsbefore2030.After2030,emissionsfallslowlyandgradually,requiringveryrapidreductionsinthe2040sand2050s.ThisdoesnotviolateChina’scommitmentsbutresultsinlargecumulativeemissionsanddoeslittletodemonstratethecommitmenttothelong-termgoaloverthenexttwodecades.The“consistenteffort”pathwayshowsapathtothecarbonneutralitytargetinwhichemissionsplateauuntil2025andstartfallingthereafter,avoidingalargechangeintheamountofeffortrequiredinthefollowingdecades.The1.5°Cpathwaywouldbeextremelychallengingtoachieve,butitiswhatChinaandothercountriesshouldstrivetowardsbasedontheParisAgreement.China'scumulativeCO2emissionsin2023-2060underthe1.5degreepathwaywouldbe160Gt,200Gtinthe“consistent”effortpathwayand270Gtinthe"minimumrequiredbytargets"pathway.Theremainingcarbonbudgetfora50%chanceofkeepingglobalwarmingbelow1.5degreesisestimatedat250GtasofJanuary2023.Thebudgetfora66%chanceoflimitingwarmingto2degrees30isanestimated940Gt.32Thismeansthatunderthe“minimumrequiredbytargets”pathwayChina’semissionswoulduseuptheentireremaining1.5-degreebudget,and29%ofthe2-degreebudget.Underthe1.5-degreepathway,Chinawouldemit64%oftheremainingglobal1.5degreebudgetand17%ofthe2-degreebudget.The17%sharecouldbeseenasChina’sfairshareasitcorrespondstoChina’sshareoftheworldpopulation.The1.5-degreepathwayforChinashowninthefigureincludesCO2concentrationovershootandnegativeemissions,whichiswhyChina’sshareoftheglobalemissionsbudgetisimplausiblylarge.CarbonEmissionsControlInJuly2023,theCentralCommitteefortheComprehensiveDeepeningofReformsapprovedtheOpinionsonAdvancingtheTransitionfromDualControlofEnergyConsumptiontoDualControlofCarbonEmissions33duringitssecondmeeting,althoughthecontentofthisdocumenthasnotbeenpubliclydisclosed.“DualControlofEnergyConsumption”managestotalenergyuseandintensity.Chinahasachievedprogressinthisregard,withacumulative26.4%decreaseinenergyconsumptionperunitofGDPfrom2012to2021,althoughtheenergyintensitytargetfor2020wasmissed.“DualControlofCarbonEmissions”focusesonregulatingboththetotalvolumeandintensityofcarbonemissions.Bothoftheseapproachesplaceconstraintsontheuseoffossilfuels.However,it’simportanttonotethatcontrollingtotalenergyconsumptionextendsbeyondjustfossilfuels.Italsoimpactsthedevelopmentofnuclearandrenewableenergysources(exemptionsfornewlyaddedrenewableenergyconsumptionsasoftheendof2022).Moreover,industrieslikepetrochemicalshaveinflexibleenergydemands,andoverlyrestrictivemeasuresduringthe“dualcontrolofenergyconsumption”maynotbereasonableorconducivetoeconomicdevelopment.Incontrast,“dualcontrolofcarbonemissions”considersboththequantityandintensityofcarbonemissions,allowingforgreaterflexibilityinutilisingrenewableenergy.Toimplementthisapproach,Chinaneedstoenhancethecarbonemissionsaccountingcapabilities,andallocatecarbonemissiontargetstovariousadministrativeregionsandkeysectors.“Carbonemissiondualcontrol”empowershigh-energy-consumingenterprisestoeffectivelymanageemissions,fosteringroomforgrowthandtransformation.Thisalignswiththetransitionfromfossilfuelstorenewableenergysources,supportingbotheconomicdevelopmentandenvironmentalsustainability.CarbonsinksBesidesemissionscontrol,Chinaisalsoseekingtoenhanceitsecosystems’carbonsinkcapacity.In2023,theChinesegovernmentlaunchedtheEcosystemCarbonSinkEnhancementPlan34.ThisplanaimstoassessChina’secosystemcarbonstoragebaseline,identifypotentialforincreasedcarbonsinkduringthe14thFYPperiod,andestablishaninternationally-alignedcarbonsinkmeasurementsystem.Theplanalsofocusesonkeyactions,includingenhancingforestsandgrasslandcarbonsinks,conservingandrestoringmarineandfreshwaterecosystems,bolsteringcarbonsinkcapacityinurban32Lamboll,R.D.,Nicholls,Z.R.J.,Smith,C.J.etal.Assessingthesizeanduncertaintyofremainingcarbonbudgets.Nat.Clim.Chang.(2023).https://doi.org/10.1038/s41558-023-01848-533CPCNews.(2023)ConstructingaNewSystemforaHigher-LevelOpenEconomytoGraduallyShiftfromEnergyConsumptionDualControltoCarbonEmissionDualControlhttp://cpc.people.com.cn/n1/2023/0712/c64094-40033549.html34MinistryofNationalResourcesofChina.(2023).EcosystemCarbonSinkEnhancementPlan.https://www.forestry.gov.cn/c/www/zyxx/367743.jhtml31andagriculturalareas,andrehabilitatingdegradedlands.AfforestationprogrammeshavemanagedtocontinuouslyincreaseChina’sforestcoveragesince2012.By2022,thenationalforestcoverratereached24%,withaforeststockvolumeof19.5billioncubicmetres35.Withthecontextofatop-levelgoalsettoreachaforestcoverrateof25%by203036,theNationalLandGreeningPlanningOutline(2022-2030)statedthatChinashouldimplement,amongotherthings,afforestationandgrasscultivationfor500millionmu(33.3Mha)ofland,controlandtransform100millionmu(6.7Mha)ofdesert,andincreasetheplantationcoveragerateto43%inurbanareasand32%inruralareas,duringtheperiodofthe14thFYP.Theecologicalcarbonsinkshouldhaveasignificantincreaseby203037.SupportingtoolssuchasGuidelinesforValidationandVerificationofForestryCarbonProjectsarealsopromulgated38.The14thFYPstatedthat“oceancarbonsinksshouldbeimproved”,althoughnofurtherdetailedpolicyhasbeenreleased.In2023,theindustrystandardOceanCarbonSinkAccountingMethods39wasofficiallyadopted,offeringasolutionforquantifyingoceancarbonsinks.Whilethereisnonational-levelpolicy,coastalregionshavemadelocalpolicies.Forexample,ZhejiangProvincehasreleasedtheGuidelinesforAdvancingOceanCarbonSinkCapacity40,aimingtocreateamodelforoceancarbonsinkdevelopment.Keygoalstoachieveby2025includeestablishingafoundationalresearchandmonitoringsystemforoceancarbonsink,restoring2,000hectaresofcoastalwetlands,addingmorethan200hectaresofmangroves,andrehabilitating74kmofcoastline.HainanProvincestatedthatitwillfinishanoceansinkbaselinescreeningandlaunchfiveoceansinkpilotprogrammesby2024,accordingtotheHainanProvincePilotWorkPlanforCarbonSinksinMarineEcosystems(2022-2024)41.ShandongProvincealsoincludedbaselinescreeningforitscoastalwetlands,ecologicalsystemrestorationproject,andseveralresearchprogrammesintheShandongProvincePlanforCombatingClimateChangeduring14thFYP42.35StateCouncilofChina.(2021)By2025ContinuousImprovementinUrbanandRuralLivingEnvironmentsinOurCountry,VillageGreeningCoverageRateReaches32.01%.https://www.forestry.gov.cn/main/586/20230313/091901658592486.htmlNews.36CentralCommitteeoftheCommunistPartyofChina,StateCouncil.(2021).WorkingGuidanceforCarbonDioxidePeakingandCarbonNeutralityinFullandFaithfulImplementationoftheNewDevelopmentPhilosophy.https://en.ndrc.gov.cn/policies/202110/t20211024_1300725.html.Policy.37NationalGreeningCommission.(2022).NationalLandGreeningPlanningOutline.(2022-2030).http://www.gov.cn/xinwen/2022-09/13/content_5709591.htm.Policy.38NationalForestryandGrasslandAdministrationofChina.(2021).GuidelinesforValidationandVerificationofForestryCarbonProjects.https://std.samr.gov.cn/gb/search/gbDetailed?id=D4BEFFF4EA85B241E05397BE0A0AF581.NationalStandard.39CCTV.(2023)ExpertsonOceanCarbonSinkAccountingMethods.https://eco.cctv.com/2023/01/17/ARTIwjUCbudMxobMJFHOyeKd230117.shtml40DevelopmentandReformCommissionofZhejiang.(2023)GuidelinesforAdvancingOceanCarbonSinkCapacity.https://zrzyt.zj.gov.cn/art/2023/3/22/art_1289955_59015480.html41HainanProvincialMinistryofNaturalResourcesandPlanning.(2022).HainanProvincePilotWorkPlanforCarbonSinksinMarineEcosystems(2022-2024).http://www.gov.cn/xinwen/2022-07/30/content_5703578.htm.Policy.42ShandongProvincialLeaders’GroupforAddressingClimateChange.(2022).ShandongProvincePlanforCombatingClimateChangeduring14thFYP.http://www.scio.gov.cn/xwfbh/gssxwfbh/xwfbh/shandong/Document/1722588/1722588.htm.Policy.32CarbonemissionstradingSince2011,Chinahasprogressivelylaunchedcarbonemissionstradingpilotprogrammesineightregions,includingBeijing,TianjinandShanghai.InJuly2021,thenationwidecarbonemissionstradingsystembegan,coveringthepowersector.Thetradingsystemdiffersfromthe“capandtrade”approachusedintheEUinthatit’snotdesignedtolimitthetotalCO2emissionsfromthepowersectorbutonlytodrivereductionsintheemissionsintensityofcoal-andgas-firedpowerplants,mainlythroughimprovementsinthermalefficiency.Itdoesnot,bydesign,encouragethereplacementoffossilfuelswithcleanenergy,oreventhereplacementofcoalwithgas.Toplayasignificantroleinpowersectordecarbonisation,thedesignoftheschemewouldthereforehavetoberevisedsignificantly;thiscanhoweverhappenquitefastifthepolicymakersdecidetodoit.Toensureastablepowersupply,theCarbonEmissionQuotaScheme43grantsexemptionstocompanieswithsignificantquotashortfalls.Thisyear,companieswithashortfallrateof10%ormore,andthosetemporarilyunabletocomplyduetooperationaldifficulties,canapplyforthepre-allocationofaportionofthe2023quotastomeettheircomplianceobligations.It’sunclearifthepolicywillcontinue.Thescopeofcarbontradingismeanttobeexpandedtocoverothersectorsbesidespowerand,potentially,carbonsinks.TheMEEhasreleasedaregulationdefiningtheenterprisesthataresupposedtobeincludedincarbonemissionstrading44,namelythosewithannualemissionsexceeding26,000tonnesofCO2equivalentinthepetrochemicals,chemicals,buildingmaterials,steel,non-ferrousmetals,paper,anddomesticcivilaviationsectors.Anotherhigh-levelpolicydocument,OpinionsfromOfficeofStateCouncilonEstablishingandImprovingtheMechanismforRealisingtheValueofEcologicalProducts,alsoemphasisesimprovingcarbonemissiontradingandcallsforestablishingcarbonsinktradingpilotprogrammes45.Aftermorethansixyearsofsuspension,thenationalcarboncreditprogramme(ChinaCertifiedEmissionReduction,CCER)isabouttorelaunchbytheendof2023.InOctober2023,theMEEreleasedtheManagementMeasuresforVoluntaryGreenhouseGasEmissionsTrading(Trial)46,optimisingthemanagementapproachforvariousaspectsofvoluntarygreenhousegasemissionsreduction,includingmethodologies,projects,emissionreductions,accreditingandverificationbodies,andtradingentities.ThesemeasuresserveasthefoundationalregulationstoensuretheorderlyoperationoftheCCER.CCERreferstothequantifiedverificationofgreenhousegasemissionsreductionsfromprojectslikerenewableenergy,forestrycarbonsinks,andmethaneutilisation.Thesereductionscanbeusedbyregulatedentitiestooffsettheircarbonemissions.43MinistryofEcologyandEnvironmentofChina.(2023).ImplementationPlanfortheTotalAllocationofCarbonEmissionTradingQuotasforthePowerGenerationIndustryin2021and2022Nationwide.https://www.mee.gov.cn/xxgk2018/xxgk/xxgk03/202303/W020230315687660073734.pdf44MinistryofEcologyandEnvironmentofChina.(2022).NoticeontheManagementofCorporateGreenhouseGasEmissionsReportingin2022.https://www.mee.gov.cn/xxgk2018/xxgk/xxgk06/202203/t20220315_971468.html.Policy.45OfficeoftheCentralCommitteeoftheCommunistPartyofChina,OfficeofStateCouncil.(2021).OpinionsonEstablishingandImprovingtheValueRealisationMechanismofEcologicalProducts.http://www.gov.cn/zhengce/2021-04/26/content_5602763.htm.Policy.46MinistryofEcologyandEnvironment.(2023).ManagementMeasuresforVoluntaryGreenhouseGasEmissionsTrading(Trial).https://www.mee.gov.cn/xxgk2018/xxgk/xxgk02/202310/t20231020_1043694.html.Policy.33Carbonemissionsmonitoring,reporting,andverificationandaccountingsystemRegardlessofthelimitednear-termimpactonemissions,theintroductionofthecarbontradingschemehasheraldedthecreationofaregulatoryframeworkandemissionsmonitoring,reporting,andverification(MRV)systemsthatmakeupthefoundationofaneffectivecarbontradingsystem,andeffectiveclimatepolicyingeneral.TheNoticeonCarryingOutGreenhouseGasEmissionReportingandVerificationforSelectedKeyIndustriesfortheYears2023-202547andtheGuidelinesfortheVerificationofCorporateGreenhouseGasEmissionsReport48arethemostrecentguidelinesforemissionMRV,withmanyreportingguidelinesthatarealsotakingeffect(accountingandreportingmethodsoftheseindustriesarereleasedintothreebatches,byNDRC)49,50,51.Inthetradingstage,MeasuresfortheAdministrationofCarbonEmissionsTradingisregulatingthetradingactivity52.InApril2022,NDRCwithothergovernmentdepartmentsjointlyissuedaplan53tocreateastandardisednationalandlocalcarbonemissionsaccountingsystem.TheNationalBureauofStatisticswastaskedwithdevelopingmethodsforthispurpose.Theplanalsoincludedannualcarbonemissioncalculations,improvingindustryandenterprisecarbonaccountingandenhancinggreenhousegasinventorymechanisms.Thegoalwastoestablishaunifiedandstandardisedcarbonemissionsaccountingsystemby2023.InNovember2022,theStateAdministrationforMarketRegulationissuedaplan54todevelopstandardsforcarbonemissionsmonitoring,accountingandverification,essentialforachievingcarbonpeakandneutrality.Theplanaimedtoestablishthemeasurementsystemby2025,coveringmajorindustries.InSeptember2023,MEEandNBSsignedaframeworkagreement55tocollaborateoncarbonemissionsaccounting.ThispartnershipaimstobuildaNationalGreenhouseGasEmissionFactorDatabase,strengtheningChina’sfoundationalsupportforcarbonaccountingandenhancingtransparencyforcomplianceoncarbonemissions.47MinistryofEcologyandEnvironment.(2023).TheNoticeonCarryingOutGreenhouseGasEmissionReportingandVerificationforSelectedKeyIndustriesfortheYears2023-2025.https://www.mee.gov.cn/xxgk2018/xxgk/xxgk06/202310/t20231018_1043427.html.Policy.48MinistryofEcologyandEnvironment.(2022)GuidelinesfortheVerificationofCorporateGreenhouseGasEmissionReport.https://www.mee.gov.cn/xxgk2018/xxgk/xxgk06/202212/t20221221_1008430.html49NationalDevelopmentandReformCommissionofChina.(2013).Accountingandreportingmethodsofgreenhousegasemissionforthe1stbatch-10keyindustries.http://www.gov.cn/zwgk/2013-11/04/content_2520743.htm.Policy.50NationalDevelopmentandReformCommissionofChina.(2014).Accountingandreportingmethodsofgreenhousegasemissionforthe2ndbatch-4keyindustries.https://www.ndrc.gov.cn/xxgk/zcfb/tz/201502/t20150209_963759.html?code=&state=123.Policy.51NationalDevelopmentandReformCommissionofChina.(2015).Accountingandreportingmethodsofgreenhousegasemissionforthe3rdbatch-10keyindustries.https://www.ndrc.gov.cn/xxgk/zcfb/tz/201511/t20151111_963496.html?code=&state=123.Policy.52MinistryofEcologyandEnvironmentofChina.(2020).MeasuresfortheAdministrationofCarbonEmissionsTrading.https://www.mee.gov.cn/xxgk2018/xxgk/xxgk02/202101/t20210105_816131.html.Policy.53NationalDevelopmentandReformCommission.(2022).ImplementationPlanforAcceleratingtheEstablishmentofaUnifiedandStandardisedCarbonEmissionAccountingSystem.https://www.ndrc.gov.cn/xxgk/zcfb/tz/202208/P020220819537055381532.pdf.Policy.54StateAdministrationforMarketRegulation.(2022).ImplementationPlanforEstablishingandImprovingtheCarbonPeakandCarbonNeutralityStandardMeasurementSystem.https://www.gov.cn/zhengce/zhengceku/2022-11/01/5723071/files/456978e8376e43fa80a0ce26ea6622c7.pdf.Policy.55MinistryofEcologyandEnvironment.(2023)MinistryofEcologyandEnvironmentandNationalBureauofStatisticsSignCooperationFrameworkAgreementonCarbonEmissionStatisticalAccountingWorkhttps://www.mee.gov.cn/ywdt/hjywnews/202309/t20230926_1041974.shtml.News.34LowcarbonandzerocarbontechnologiesTheMinistryofScienceandTechnology,alongwithotherdepartments,jointlyreleasedthe2022-2030ImplementationPlanforTechnologicalSupportforCarbonPeakandCarbonNeutrality56.Followingthis,severallocalgovernmentsincludingShanghai,JiangsuandHebeihaveintroducedtheirownplanstoachievedualcarbongoalswithtechnologicalbacking.ThesignificanceofindustrialandtechnologypolicyinChina’scarbonpeakandcarbonneutralitystrategyisgrowing.Theevidenceofthisisawaveofinvestmentinmanufacturingcleanenergytechnologies,especiallyinsolar,wind(detailsin4.5.2)andelectricvehicles(detailsin4.7.2).TheNDRCalsoclearlyspecifiedintheImplementationPlanforFurtherEnhancingtheMarket-DrivenGreenTechnologyInnovationSystem(2023-2025)57thatitintendstobolsterfinancialandtaxsupportforcleantechnologies.Currently,China’seffortsincarbonneutralitytechnologyfocusonkeyareassuchascleanandefficientcoalutilisation,renewableenergytechnologies,low-carbonutilisation,andcarboncaptureandstorage(CCUS).“Cleancoalutilisation”includestechnologiesthatmakeatmostamarginalcontributiontoreducingemissions,suchasunabatedcoalpowerplantsusingultra-supercriticalsteamcycles,aswellasonesthatparadoxicallyhavehighercarbonemissionsthanthetechnologiestheyreplace,especiallycoal-basedsynfuelsandchemicalsproduction(coal-to-chemicalsindustry).However,thesetechnologiesareoftenemphasisedbyofficialsasashowcaseofemissionsreductionachievements,asanalternativetolimitingnewcoalprojects.Technologiesrelatedtonetzerocarbon,suchasCCUS,arecurrentlyintheindustrialdemonstrationphaseandareassociatedwithrelativelyhighcosts.AccordingtotheChinaAnnualReportonCCUS2023,nearly100CCUSdemonstrationprojectsareoperationalorpermitted.Amongthem,morethanhalfhavebeenconstructedandputintoconstruction,withacapacitytocaptureapproximately4millionstonsofCO2peryear.Thereportsuggeststhatitlaysthefoundationforachievinglarge-scaleapplicationsinthenearfuture.4.1.3DatadisclosureThegovernmentcurrentlyreportsontheimprovementinCO2intensityeveryyear,whichcanbeusedtocalculatethechangeinCO2emissionsbasedonreportedGDPgrowth.However,thisisarudimentaryandnon-transparentwayofreportinganddoesn’tincludesinksornon-energyCO2emissions.ActualgreenhousegasemissionsdisclosureonlytakesplacethroughChina’snationalcommunicationstotheUnitedNationsFrameworkConventiononClimateChange(UNFCCC),themostrecentofwhichhasdatafor2014.Implementingdualcontrolofcarbonemissions(detailsin4.1.2)hingesonbuildingthenecessaryfoundationcapabilities,particularlyincarbonemissiondataaccounting.56MinistryofScienceandTechnologyofChina.(2022).Policy.2022-2023ImplementationPlanforTechnologicalSupportforCarbonPeakandCarbonNeutrality.https://www.gov.cn/zhengce/zhengceku/2022-08/18/5705865/files/94318119b8464e2583a3d4284df9c855.pdf.Policy.57NationalDevelopmentandReformCommission.(2022).ImplementationPlanforFurtherEnhancingtheMarket-DrivenGreenTechnologyInnovationSystem(2023-2025).https://www.ndrc.gov.cn/xxgk/zcfb/tz/202212/t20221228_1344205.html.Policy.354.2Non-CO2greenhousegases2023highlights●TheMethaneEmissionsControlActionPlanwaspublished,layingoutChina’sapproachtomethaneemissionmanagementandcontrol.BesidesrapidreductionsinCO2emissions,thetransitionpathwaysconsistentwiththe1.5°Ctargetrequiremoreeffortstocontrolothernon-CO2greenhousegases(NCGHGs).ThetotalreductionsinNCGHGswillreach30%ofthe2014emissionslevel(2,000MtCO2-eq)in2030and34%in2050inthe1.5°Cpathway.IntheICCSD1.5°Cpathway,non-CO2emissionspeakandfallbelowthe2020levelbefore2025.Emissionsstandat2.38GtCO2-eqin2025andfallto1.2GtCO2-eqin2050.TheICCSD’s2°Cpathwayprojectsthatnon-CO2GHGemissionswillpeakin2025at2.51billiontCO2eq,withanaverageannualincreaseof1.5%from2020to2025,beforefallingto1.76GtCO2-eqin2050,anannualrateofreductionsof1.4%.AfterCO2,methaneisthegreenhousegasthatChinaemitsthemostinCO2-equivalentterms.IntheICCSD2°Cpathway,methaneemissionspeakbefore2025at1,220MtCO2-eqandfallto1,180MtCO2-eqin2030.Underthe1.5°Cscenario,methaneemissionspeakatthesamelevelasthe2°Cpathwaybutaround2015andthenfallmorerapidlyto790MtCO2-eqby2030.TheICCSD1.5°CpathwayprojectsapeakinN2Oemissionsaround2020at580milliontCO2e,fallingto420milliontCO2ein2030.F-gasesemissionspeakin2030at730MtCO2-eqandfallto440MtCO2-eqin2050.TheICCSD2°CpathwayseesN2Oemissionsreachingapeakaround2020,butat650milliontCO2eanddroppingto570milliontCO2ein2030,whileF-gasemissionspeakatthesamelevelinthesameyearasthe1.5°Cpathwaybutdropto510milliontCO2ein2050.4.2.1PoliciesinplaceChinahaslongrecognizedtheneedtocontrolnon-CO2greenhousegases,asshownbytheinclusionofthisareaintheActionPlanforthe13thFYP,publishedin2016.However,morespecificpolicieswerenotissued.Inthe14thFYP,thiswasspecifiedas“strengthencontrollingofmethane,HFCsandPFCs”.IntheChinaNationalImplementationProgressReportonNDC(2022)58Chinaoutlineditscommitmenttodevelopandexecuteanactionplanformanagingnon-CO2greenhousegasemissions,andtoimprovemonitoringandreportingtechniquesfortheseemissions.However,theactionplanisyettobepublished,andotherpolicieshavenotincludednumericaltargets.ThereisalsonoreportingonNCGHGemissionsthatwouldallowtheassessmentofemissionstrendsafter2014,theyearcoveredbythelatestofficialemissionsinventory.It’scurrentlynotclearwhetherthe“carbonneutrality”targetshouldbeunderstoodtocoverallgreenhousegasesoronlyCO2.China’sSpecialEnvoyforClimateChangeAffairs,XieZhenhua,has58MinistryofEcologyandEnvironmentofChina.(2022).ChinaNationalImplementationProgressReportonNDC(2022).https://www.mee.gov.cn/ywgz/ydqhbh/qhbhlf/202211/W020221111760730462299.pdf.Governmentdocument.36repeatedlystated59tothemediathatChina’scarbonpeakreferstothepeakofCO2emissions,andthecarbonneutralityby2060referstotheneutralityofallgreenhousegases.China’sNDCtargetsdonotincludeemissionsofgreenhousegasessuchasmethane.However,thecarbonneutralitygoalencompassesemissionsofgreenhousegasesacrosstheentireeconomy,notjustCO2.Thisincludesmethane,hydrofluorocarbons,andothernon-CO2greenhousegases.Asofnow,Chinahasnotofficiallydocumentedthesespecificsinanofficialgovernmentdocument.China’smethaneemissionsaccountformorethan14%oftheglobaltotal,makingittheworld’slargestmethaneemitter.Methaneaccountedfor10.4%ofChina’stotalGHGemissionsin201460.Coalbedmethaneemittedfromcoalminingisresponsibleformorethan90%oftheenergysector’smethaneemissions.TheNationalEnergyAdministrationofChina(NEA)releasedapolicyin2020regulatingcoalbedmethaneandencouragingitsutilisation,specifyingthatitshouldbeextractedandutilisedfromdepositswithmethanevolumeconcentrationsover8%inthetrappedgas,andextractionisencouragedindepositswithaconcentrationbetween2%and8%61.Theremainingemissionsarerestrictedbyanon-trialEmissionStandardforCoalbedMethane62,promulgatedbytheMEE.Thereisalsoadischargestandardthatregulatesmethaneemittedfrommunicipalwastewatertreatmentplants63.Atthe2021COP26,theUSandChinaagreedinJointGlasgowDeclaration64toenhancemethanemeasurementandreduction,targetingfossilandwastesectorsandintroducingincentivestocurbagriculturalmethaneemissions.Inlinewiththesecommitments,November2022sawtheMEEreleasereferencestandards65forclimateinvestment,supportingprojectsthataimtoreducemethaneemissions.InOctober2023,measures66wereintroducedfortradingvoluntarygreenhousegasemissionreductions,includingmethanereductioninitiatives.59XieZhenhua.(2021).http://www.ncsc.org.cn/xwdt/gnxw/202107/t20210727_851433.shtml.Speech.60MinistryofEcologyandEnvironmentofChina.(2018).ThePeople’sRepublicofChinaSecondBiennialUpdateReportonClimateChange.https://www.mee.gov.cn/ywgz/ydqhbh/wsqtkz/201907/P020190701765971866571.pdf.Report.61NationalEnergyAdministrationofChina.(2020).NoticeonFurtherStrengtheningtheManagementofEnvironmentalImpactAssessmentofCoalResourcesDevelopment.http://www.nea.gov.cn/2020-12/03/c_139560035.htm.Policy.62StateEnvironmentalProtectionAdministrationandothers.(2008).EmissionStandardofCoalbedMethane/CoalMineGas(ontrial).https://www.mee.gov.cn/ywgz/fgbz/bz/bzwb/dqhjbh/dqgdwrywrwpfbz/200804/t20080414_121137.shtml.NationalStandard.63StateEnvironmentalProtectionAdministrationandothers.(2002).Dischargestandardofpollutantsformunicipalwastewatertreatmentplant.https://www.mee.gov.cn/ywgz/fgbz/bz/bzwb/shjbh/swrwpfbz/200307/t20030701_66529.shtml.NationalStandard.64USDepartmentofState(2021)U.S.-ChinaJointGlasgowDeclarationonEnhancingClimateActioninthe2020s.https://www.state.gov/u-s-china-joint-glasgow-declaration-on-enhancing-climate-action-in-the-2020s/.Governmentdocument.65MinistryofEcologyandEnvironmentofChina.(2022).ReferenceStandardsforLocalClimateInvestmentandFinancingProjectsundertheClimateInvestmentandFinancingPilotProgram.https://www.mee.gov.cn/xxgk2018/xxgk/xxgk06/202211/W020221117316973946868.pdf.Standard.66MinistryofEcologyandEnvironmentofChina.(2023).ManagementMeasuresforVoluntaryGreenhouseGasEmissionReductionTrading(Trial).https://www.mee.gov.cn/xxgk2018/xxgk/xxgk02/202310/t20231020_1043694.html.Measures.37ThelatestdevelopmentcameinNovember2023,whentheMEEpublishedtheMethaneEmissionsControlActionPlan67,settingoutmethanemanagementstrategiesfortheupcoming14thand15thFYP.Theactionplansetsanaimtodeveloppolicy,technologyandstandards,aimingtoboostmethanecaptureandutilisation,particularlyinagricultureandwastemanagement.It“seekstoestablish”amonitoring,reportingandverification(MRV)systemformethaneandsetsadirectionfortheoilandgasindustrytoendroutineflaring.However,itlacksemissionsreductiontargetsandfirmtimelinesforthemostimportantsteps,suchasregularreportingofmethaneemissions,onlycallingfor“improvement”inemissionsmonitoringduringthe14thand15thFive-YearPlanperiods.Table4Selectedpoliciesrelatingtonon-CO2greenhousegasesPolicynameRelease2025TargetsTargetsfor2030andbeyonddateMethaneEmissionControlApolicy,technology,andstandardssystemThepolicy,technology,andstandardsActionPlan(Ministryof2023-11-07systemformethaneemissionscontrolEcologyandEnvironment)formethaneemissionscontrolwillbewillbefurtherperfected.Thebasicgraduallyestablished.Thefoundationalcapabilitiesformethaneemissionscapabilitiesformethaneemissionsmonitoring,reportingandverificationmonitoring,reportingandverificationwillwillbesignificantlyimproved,andthebeeffectivelyenhanced,andpositivecontrolcapacityandmanagementlevelprogressintheutilisationofmethaneofmethaneemissionswillberesourcesandemissionscontroleffortswilleffectivelyelevated.Thelevelofcoalbeachieved.Therewillbeasteadyminegasutilisationwillbefurtherreductioninmethaneemissionsintensityenhanced,andmethaneemissionperunitofagriculturalproductintheintensityperunitofagriculturalplantingandbreedingindustries,andaproductintheplantingandbreedingcontinuousincreaseintheresourcesectorswillbefurtherreduced.utilisationrateofmunicipalsolidwasteandFollowingthis,theoilandnaturalgastheharmlessdisposalrateofurbansewageextractionindustrywillstrivetosludge.progressivelyachievezeroroutineflaringinonshoreoilandgasextraction.4.2.2DatadisclosureEmissionsdisclosurefornon-CO2greenhousegasesonlytakesplacethroughnationalcommunicationstotheUNFCCC,themostrecentofwhichhasdatafor2014,whichisamajorshortcominginbothtrackingemissionstrendsandtheeffectofpoliciesandinChina’sabilitytosetemissionstargetsforthesegases.67MinistryofEcologyandEnvironment.(2023).MethaneEmissionsControlActionPlan.https://www.mee.gov.cn/xxgk2018/xxgk/xxgk03/202311/W020231107750707766959.pdf384.3Totalenergysupplyanddemand2023highlights●Additionalconsumptionofrenewableenergyelectricityissubtractedfromthetotalenergyconsumptionbutisstillincludedintheassessmentofenergyconsumptionintensity.Inmosttransitionpathways,emissionspeakingreliesheavilyonenergyefficiencymeasuresandstructuralchangesintheeconomythatslowdownenergydemandgrowth,withtotalenergydemandgrowthbetween0and2%.OnlytheSchoolofEnvironmentandNaturalResources-RenminUniversityscenariosprojectgrowthatover2%.Forexample,theICCSD1.5°Cpathwayseestotalprimaryenergyconsumptionenteringaplateauof5.3Gtceby2025,upslightlyfrom5.2Gtcein2021,andthendeclininggraduallyto5.0Gtcein2050.Theshareofnon-fossilenergyintheprimaryenergymixincreasesfrom16.6%in2021to38.7%by2030and86.1%in2050,whiletheshareofcoaldropsfrom56%in2021to35.4%and5.4%,respectively.4.3.1TrendscomparedtobenchmarksFigure14AnnualchangeinChina’stotalenergyconsumptioncomparedtoenergytransitionpathways39China’stotalenergydemandhasbeengrowingatanaverageof3.3%peryearoverthepastfiveyears,with2021seeinggrowthatover5%.Thegrowthratesaremuchfasterthanprojectedinthetransitionpathways,whichisthemainreasonthatChina’senergy-relatedCO2emissionshavekeptincreasingdespiteworld-leadinginvestmentincleanenergy.In2022,growthslowedtoapproximately1%,butacceleratedin2023,forprojected4%growth.Structuralchangeintheeconomy,withreducedrelianceonconstructionandheavyindustryasgrowthdrivers,aswellasaslowerrateofoveralleconomicgrowth,promisestoslowdowntotalenergydemandgrowthinthe2020s.Fasterimprovementinenergyefficiencycanalsomakeabigcontribution.However,ifenergydemandgrowthcontinuesatcurrentlevels,muchfastercleanenergygrowththanprojectedinthetransitionscenarioswillberequiredtopeakanddeclineemissions.Figure15AnnualchangeinChina’scoalconsumptioncomparedtoenergytransitionpathways40Figure16AnnualchangeinChina’soilconsumptioncomparedtoenergytransitionpathwaysFigure17AnnualchangeinChina’sgasconsumptioncomparedtoenergytransitionpathways41Thetransitionpathwaysrequireareductionincoalconsumptionthroughoutthe2020s.Inthepastsevenyears,coalconsumptiononlyfellin2016,withsignificantincreasesthereafter.PeakinganddecliningcoaluseinasustainedwayremainsChina’sgreatestchallenge.Oilconsumptiongrowthslowsdowninthe2020sinallscenarios,butonlysomescenariosrequireanabsolutereductionfrom2020to2030.However,China’soilconsumptiongrowthwasfasterthaninthetransitionpathwayseveryyearfrom2016to2021,including2020,thefirstyearoftheCOVID-19pandemic.Oilconsumptiononlyfellin2022duetoCOVID-19controlmeasures,andreboundedin2023.Alltransitionpathwaysincludeincreasesingasconsumptionuntil2030,butthegrowthratesvarywidelyfrom6–8%intheSENRscenariosto2–3%intheIEAandIPCCpathways.Overall,fossilgasdemandgrowthinthepastfiveyearsiswellwithintherangeofthetransitionpathways,andgrowthappearstohavesloweddownin2022–2023duetohighgaspricesandreversalofpoliciesfavouringgasuseovercoal.Figure18AnnualchangeinChina’snon-fossilenergyproductioncomparedtoenergytransitionpathwaysIn2016–2020,theaveragegrowthrateofnon-fossilenergyproductionremainedbelowthelowendofthetransitionpathways.In2021–2022,forthefirsttime,theannualchangeinnon-fossilenergyproductionreachedthelowendofthosepathwaysduetostronggrowthinwindandsolargenerationandstronghydropowercontributionattimes.Only35%oftotalenergydemandgrowthwasmetbynon-fossilenergysourcesin2016–2021,dueto42thefactthattotalenergydemandwasrisingmuchfasterthaninalloftheexaminedpathways.ToachievepeakcarbonanddecreaseCO2emissionswillrequirenon-fossilenergygrowthrateandtotalenergydemandgrowthratetoriseabove100%,meaningthatcleanenergygrowthratesneedtotripleortherateofenergydemandgrowthneedstofalltoone-thirdoranycombinationofthetwo.Plannedcleanenergyexpansionuntil2025issufficienttomeetelectricitydemandgrowthofupto4%peryearandtotalenergydemandgrowthofupto2%peryear.Ifgrowthratesarebelowtheselevels,emissionsfromthepowersectorandthewholeeconomy,respectively,willpeak.Figure19AnnualincreaseintheelectrificationratiocomparedtoenergytransitionpathwaysInthetransitionscenarios,theshareofelectricityinfinalenergyconsumptionrisesfrom25%in2020to30%in2030.ElectrificationhasbeenprogressingfasterthanthisinChina,atmorethan1%peryear,creatingtheconditionsforemissionsreductionswhentheelectricityisproducedfromcleansources.Currently,theincreaseinelectricitydemandhasdrivenincreasesinpowersectoremissionsbecausecleanenergygenerationgrowthhasnotbeensufficienttocoverthegrowthindemanddespitetherapidincreaseinwindandsolarpowerinstallations.Analysingthecausesoffaster-than-projectedenergydemandgrowthThemainreasonthatChina’sCO2emissionskeptincreasinguntil2021isfasteroverallenergydemandgrowththanprojectedinthetransitionpathways.It’simportanttoanalysewhatisresponsiblefortheovershoot.43Inthe2015–2019period,reportedGDPgrowthwasslightlyfasterthanassumedinthetransitionpathwaysforthe2020–2030period.However,in2020–2022,averageGDPgrowthwasbelowtherateinthetransitionpathways,butenergyconsumptionandemissionsgrowthcontinuedabovetheratesinthetransitionpathways,implyingthatGDPgrowthrateisn’tanexplanationoratleastnottheonlyexplanation.Figure20Energyconsumptiongrowthbysectorandfuel,from2017to2021,andadecompositionofgrowthinindustrybysubsectorNotethatelectricityhasbeenconvertedtoprimaryenergyusingtheaverageheatrateofcoal-firedpowergeneration.Datasource:IEAWorldEnergyBalances2020.44Theovershootcanbeattributedtorapidincreasesinenergydemandinindustryandbuildings.Growthinelectricityconsumptioninthesesectorsledtoincreasesincoaluseforpowergeneration(seeFigure20).Intheindustrialsector,thelargestincreasesinenergydemandtookplaceintheironandsteel,andchemicalandpetrochemicalindustries.Thereasonthatindustrialenergydemandhasgrownfasterthanprojectedintheindustrialsectorisrapidgrowthintheoutputofthemostenergyintensiveindustrialsectors.Whilerapidprogresswithelectrificationaccountsfortheincreasesincoaluseinthepowersector,itcannotexplainthefaster-than-projectedgrowthinoverallcoaluse,aselectrificationshiftscoalconsumptionfromothersectorstothepowersectorbutdoesn'tincreasetotalcoalconsumption.4.3.2Policiesinplace:Actionforgreenandlow-carbonenergytransitionEnergyefficiencyandnon-fossilfuelconsumptionarehighlightedasthe“mainobjectives”forthetop-levelImplementationPlanforCarbonDioxidePeakingandCarbonNeutrality68.Theoverarchingtargetsfortheplanaresetinthe14thFYP:●Targetsby2025:○EnergyconsumptionperunitofGDPwillbeloweredby13.5%fromthe2020level;○Carbondioxide(CO2)emissionsperunitofGDPwillbeloweredby18%fromthe2020level;○Theshareofnon-fossilenergyconsumptionwillhavereachedaround20%.●Targetsby2030:○CO2emissionsperunitofGDPwillhavedroppedbymorethan65%comparedwiththe2005level;○Theshareofnon-fossilenergyconsumptionwillhavereachedaround25%.Tosupportthesetop-levelgoals,targetshavetrickleddownandarebeingrepeatedinavarietyofpolicies.14thFive-YearPlanforModernEnergySystem69istheoverarchingpolicydirectingthedevelopmentoftheenergysystem.Besidesadoptinggoalsfromthetop-levelobjectives,italsoestablishedadditionalgoalsintheenergysystem(Table4showsonlytheenergyefficiencyandtransitiongoals).GuidingOpinionsonHigh-QualityDevelopmentoftheCoalIndustryin14thFYP70setsuptheexpectationforthecoalindustry:coalconsumptionisprojectedtobeabout4.2billiontonnes,withanaverageannualgrowthof1%.TheBenchmarkofcleanandefficientutilisationofcoal(2022edition)71was68CentralCommitteeoftheCommunistPartyofChina,StateCouncil(2021).WorkingGuidanceforCarbonDioxidePeakingandCarbonNeutralityinFullandFaithfulImplementationoftheNewDevelopmentPhilosophy.https://en.ndrc.gov.cn/policies/202110/t20211024_1300725.html.Policy.69NationalDevelopmentandReformCommissionofChinaandothers.(2022).14thFive-YearPlanforModernEnergySystem.https://www.ndrc.gov.cn/xxgk/zcfb/ghwb/202203/t20220322_1320016.html?code=&state=123.Policy.70CoalIndustryAssociationofChina.(2021).GuidingOpinionsonHigh-QualityDevelopmentoftheCoalIndustryin14thFYP.http://www.coalchina.org.cn/index.php?m=content&c=index&a=show&catid=9&id=129818.IndustryDocument.71NationalDevelopmentandReformCommissionofChinaandothers.(2022).Benchmarkofcleanandefficientutilisationofcoal(2022edition).https://www.ndrc.gov.cn/xxgk/zcfb/tz/202205/t20220510_1324482.html?code=&state=123.Policy.45createdinApril2022,basedontheNationallevelimplementationplan(asoutlinedintheIndustrysectionbelow)72.Itdrawsthelinebetween“benchmarklevel”and“baselinelevel”efficiencybenchmarksforcoalmining,coalheatingfurnace,andcoalgasificationindustries.InAugust2022,anoticeforamending“ThreeBatches”ofenergyefficiencyandflexibilitystandardsforcoal-firedplantswasreleasedbytheNEA73.“ThreeBatches”refersto:1)By2023,amendbindingstandardsforenergyefficiencyassessment,withtheintegrationofcurrentstandardsforgeneral74andCHP75(combinedheatandpower)coalpowerplants,andalsoaddingCFBplantsintostandardenforcement;2)by2023,enactoramendcalculationandassessmentstandards;and3)amendsupportingpolicies.Withupdatedemissionsstandards,theImplementationPlanfortheRetrofittingandUpgradingofCoal-firedPowerPlantswilldirecttheretrofittingandupgradingofcoal-firedfleets76.By2025,theaveragecoalconsumptionintensityofcoalpowergenerationshouldfallbelow300gce/kWh(gramscoalequivalentperkilowatt-hour,equivalenttoathermalefficiencyof41%onalowerheating-valuebasis).Additionally,atleast350GWofcoalpowerplantsneedtoberetrofittedforimprovedthermalefficiency,and200GWretrofittedtoincreasetheirflexibility.Theaveragecoalconsumptionratehadalreadyfallenfrom305.5in2020to301.5in2022,potentiallyachievingthistargetaheadofschedule.Inthe2023EnergyWorkGuidance77,thereisanemphasisongraduallyraisingcoalwashingrates.Coalwashingandprocessingareessentialforimprovingandstabilisingcoalquality,which,inreturn,booststheefficiencyofcoalutilisation.Bytheendof2022,China’srawcoalwashingratehaddroppedfrom74.1%in2020to69.7%.Thedeclinemightbecausedbytwofactors:1)Partoftherawcoalisshiftedfordirectburninginpowerplantsperrequestbythegovernmenttoensuresufficientsupplyofelectricity;2)Gradualclosureofthecoalminesinmiddle-eastandsouth-westareas,whichleadtotheshortageofrawcoalsupplyforcoalwashing78.72NationalDevelopmentandReformCommissionofChinaandothers.(2022).ImplementationGuidelinesforEnergyConservationandCarbonReductionRetrofittingandUpgradinginKeyAreasofHighEnergy-consumingIndustries(2022).https://www.ndrc.gov.cn/xwdt/tzgg/202202/t20220211_1315447.html?code=&state=123.Policy.73NationalEnergyAdministrationofChinaandothers.(2022).Noticeonfurtherimprovementofcoalpowerefficiencyandflexibilitystandards.http://www.gov.cn/zhengce/zhengceku/2022-08/30/content_5707362.htm.Policy.74StandardizationAdministrationofChina.(2017).Thenormofenergyconsumptionperunitproductofageneralcoal-firedpowerset.https://std.samr.gov.cn/gb/search/gbDetailed?id=71F772D817D5D3A7E05397BE0A0AB82A.NationalStandard.75StandardizationAdministrationofChina.(2017).Thenormofenergyconsumptionperunitproductofcombinedheatandpowergeneration.https://std.samr.gov.cn/gb/search/gbDetailed?id=71F772D823CED3A7E05397BE0A0AB82A.NationalStandard.76NationalDevelopmentandReformCommissionofChinaandothers.(2021).ImplementationPlanfortheRetrofittingandUpgradingofCoal-firedPowerPlants.https://www.ndrc.gov.cn/xxgk/zcfb/tz/202111/t20211103_1302856_ext.html.Policy.77NationalEnergyAdministration.(2023).2023EnergyWorkGuidance.http://zfxxgk.nea.gov.cn/2023-04/06/c_1310710616.htm.Governmentdocument.78ZhongtaiSecurities.(May2023).Mid-termstrategyforthecoalindustryin2023.https://www.vzkoo.com/read/2023051298edc37d7524d4f2e04e7661.html.Sectoralanalysis.46Thedevelopmentofnon-fossilfuelenergyistheotherfactorthatdeterminestheprogressoftheenergytransition.The14thFive-yearplanforrenewableenergydevelopmentisapromisingblueprintthatdepictsthefuturevisionforrenewableenergydevelopment79.InNovember2022,NDRCissuedNoticeonFurtherImprovingtheWorkRelatedtoExcludingtheConsumptionofNewlyAddedRenewableEnergyfromtheTotalEnergyConsumptionControl80,clarifyingthattheadditionalconsumptionofrenewableenergyelectricityaresubtractedfromthetotalenergyconsumptionineachregionbutarestillincludedintheassessmentofenergyconsumptionintensity.Currently,renewableenergysourcesnotconsideredinthetotalenergyconsumptionprimarilyincludewindpower,solarpower,hydropower,biomasspower,andgeothermalpower.Astechnologyadvancesanddevelops,additionalmeasurabletypesofrenewableenergysourceswillbeprogressivelyintegrated.MoredetailsaboutrenewableenergywillbediscussedintheElectricitysection,below.Table5SelectedpoliciesrelatingtototalenergyconsumptionandsupplyPolicynameRelease2025TargetsTargetsfor2030anddatebeyond14thFive-YearPlanfor2022-03-22Duringthe“14thFive-YearPlan”period,Theproportionofnon-fossilModernEnergySystemcarbondioxideemissionsperunitofGDPenergyconsumptionwillreach(NationalDevelopmentanddroppedby18%infiveyears.By2025,the25%in2030.ReformCommissionandproportionofnon-fossilenergyothers)consumptionwillincreasetoabout20%;theproportionofnon-fossilenergypowergenerationwillreachabout39%;thelevelofelectrificationwillcontinuetoimprove;andelectricitywillaccountforabout30%offinalenergyconsumption.Significantresultswillhavebeenachievedinenergyconservationandconsumptionreduction,withacumulativereductionof13.5%inenergyconsumptionperunitofGDPoverthefiveyears.By2025,theproportionofflexiblepowersupplywillreachabout24%,andthepowerdemandsideresponsecapacitywillreach3%to5%ofthemaximumelectricityload.OpinionsonImproving2022-02-10Duringthe“14thFive-YearPlan”period,theBy2030,thebasicfoundationsofInstitutions,Mechanismsbasicfoundationforaninstitutionalacompletesystem,includingaandPolicyMeasuresforframeworkforpromotinggreenandpolicysystemforgreen-energyGreenandLow-Carbonlow-carbonenergydevelopmentwillbeandlow-carbondevelopment,TransitioninEnergySector,established.willbeestablished.(NationalDevelopmentandReformCommissionandothers)Benchmarkofcleanandefficientutilisationofcoal2022-05-10--(2022edition),(National79NationalDevelopmentandReformCommissionofChinaandothers.(2021).14thFive-YearPlanforrenewableenergydevelopment.https://www.ndrc.gov.cn/xwdt/tzgg/202206/t20220601_1326720.html?code=&state=123.Policy.80NationalDevelopmentandReformCommision.(2022).Policy.FurtherImprovingtheWorkRelatedtoExcludingtheConsumptionofNewlyAddedRenewableEnergyfromtheTotalEnergyConsumptionControl.https://www.ndrc.gov.cn/xxgk/jd/jd/202211/t20221116_1341436.html47PolicynameRelease2025TargetsTargetsfor2030anddatebeyondDevelopmentandReformCommissionandothers)ImplementationPlanforthe2021-11-03By2025,theaveragecoalconsumptionRetrofittingandUpgradingofintensityofcoalpowergenerationshouldCoal-firedPowerPlants,decreasebelow300gce/kWh;duringthe-(NationalDevelopmentand“14thFive-YearPlan”period,350GWcoalReformCommissionandpowerplantsshouldberetrofittedtoincreaseothers)theirflexibility.NoticeonFurtherImprovementofCoalPowerEfficiencyandFlexibility2022-08-30--Standards,(NationalEnergyAdministrationandothers)GuidingOpinionsonBytheendofthe“14thFive-YearPlan”,theHigh-QualityDevelopmentofdomesticcoaloutputwillbecontrolledattheCoalIndustryinthe“14th2021-06-03about4.1billiontonnes,andnationalcoal-consumptionwillbecontrolledatabout4.2Five-YearPlan”,(ChinaCoalbilliontonnes,withanaverageannualIndustryAssociation)consumptiongrowthofabout1%.14thFive-yearplanfor2022-06-01By2025,non-fossilenergyconsumptionwillBy2030,non-fossilenergyrenewableenergyreach20%intheenergymix;renewableconsumptionwillreach25%inthedevelopment,(Nationalenergywillreach1000Mtce(milliontonnesofenergymix;solarandwindpowerDevelopmentandReformcoalequivalent);renewableenergywilltakecapacityreach1200GW.Commissionandothers)over50%ofprimaryenergyconsumptiongrowth;renewablepowergenerationwillreach3300TWhforpowergeneration;windandsolarpowergenerationshoulddouble.MediumandLong-termPlan2022-03-23HydrogenproductionfromrenewableenergyBy2030,arelativelycompletefortheDevelopmentofwillreach100,000-200,000tonnes/year,andhydrogenenergyindustryHydrogenEnergyIndustryachieveacarbondioxideemissionreductiontechnologyinnovationsystem,(2021-2035),(Nationalof1-2milliontonnes/year.cleanenergyhydrogenproduction,DevelopmentandReformandsupplysystemwillbeformed.Commission)By2035,ahydrogenenergyindustrysystemwillbeformed,andadiversifiedhydrogenenergyapplicationsystemcoveringtransportation,energystorage,industry,andotherfieldswillbebuilt.NoticeonFurtherImprovingtheWorkRelatedtoExcludingtheConsumptionofNewlyAddedRenewableEnergy2022-11-16--fromtheTotalEnergyConsumptionControl(NationalDevelopmentandReformCommission)48PolicynameRelease2025TargetsTargetsfor2030anddatebeyondActionPlanforAccelerating2023-03-23OilandgasareusedtopromotetheefficienttheIntegrationofOilandGasdevelopmentofnewenergysources,meetExplorationandDevelopmentrisingelectricitydemandinoilandgasfields,withNewEnergyandreplaceself-consumedoilandgasinDevelopment(2023-2025)explorationanddevelopment.Thishas(NationalEnergyresultedinanadditional4.5billioncubicAdministration)metersofnaturalgassupply.Furthermore,measureslikeincreasedpressureandproductionhavecontributedtoanadditional3billioncubicmetersofnaturalgasproduction.Establish"low-carbon"and"zero-carbon"oilandgasfields.Integrateonshoreoilandgasoperationswiththeconsumptionofwindandsolarpower,bothonshoreandoffshore.4.3.3DatadisclosureDataontotalenergyconsumptionandconsumptionofthemainenergysources(coal,oil,gas,andnon-fossilenergy)isreleasedannuallyattheendofFebruaryintheStatisticalCommuniqueonEconomicandSocialDevelopment.MoredetaileddataaremadeavailableintheChinaEnergyStatisticalYearbookwithadelayof1–2years.QuarterlynumbersaresometimespublishedbytheNationalEnergyAdministration(NEA),butthisvariesfromquartertoquarter.Theseoccasionaldisclosureshowevershowthatthegovernmenthasthedataavailableinternally.MoresystematicanddisaggregatedmonthlyorquarterlydisclosurewouldgreatlyimprovethetimelinessofinformationaboutthedevelopmentofChina’senergysector'sCO2emissions.494.4Electricitygenerationandcapacity2023highlights●TheWholeCountyDistributedSolarInitiativeandLargeScaleCleanEnergyBaseshavemadesubstantialcontributionstothedevelopmentofrenewableenergyelectricityinChina.Nevertheless,thesetwomajorprojectsalsoencountervariouschallengesduringtheirimplementation.●Chinaoutlinedathree-phaseroadmapforitsNewPowerSystem.●In2023,bothGreenElectricityTradingandGreenCertificateTradingwitnessedsignificantgrowth,thankstotheimplementationofvariouspoliciesdesignedtostimulateGreenElectricityConsumption.TherangeofGreenCertificateissuancehasbeenexpanded.●Theconstructionoftheelectricityspotmarketisprogressing,withacapacitypaymentmechanismforcoalpowerintroducedinNovember2023.TheenergysectoristhelargestemitterofCO2,andelectricitygenerationisthelargestsourceofenergy-relatedCO2emissionstoday.China’selectricitydemandhasbeengrowingandwillcontinuetogrow,evenastotalenergydemandslowsdown,asenergyuseinallsectorsiselectrified.Thepowersectoristaskedwithnotjustreplacingcurrentfossilfuel-basedpowergenerationwithcleanenergy,butalsoexpandingthesupplyofelectricitytoallowthefossilfueluseinothersectorstobereplacedwithcleanelectricity.Therefore,powersectordecarbonisationandtheexpansionofcleanpowergenerationmakeupthebackboneoftheenergytransition.Chinahastheworld’slargestpowergenerationsector,withasubstantialcoalpowerfleetthatposesamajorchallengetoitspowersectortransitionandachievingcarbonzero.Thepowersectoristhelargestcontributortoemissioncutsinthetransitionpathways.Forexample,intheICCSD’s1.5°Cpathway,powersectorCO2emissionsfallsharplyfrom4,060milliontonnesin2020tonetnegativeemissionsof150milliontonnesin2050withtheaidofbioenergywithcarboncaptureandstorage(BECCS).Underthe1.5°Cand2°Cscenarios,thepowersectorseesitsemissionspeakat4.21billiontonnesin2023.Raisingtheshareofnon-fossilfuelenergyandphasingoutcoalarethemaincontributorstoreachingzero-carbonelectricityproduction.UndertheICCSD1.5°Cscenario,theinstalledcapacityofwindandsolarreaches5100GWby2050,upfrom635GWin2021.ThetotalinstalledcapacityofChina’spowersystemwillreach6300GW,upfrom2400GWin2021.91%ofpowerwillbegeneratedfromnon-fossilfuels,withwindandsolartakingup63%.End-useelectrificationandgreenhydrogenproductionwillincreaseelectricitydemandsignificantly.Forexample,intheICCSD1.5°Ctarget-orientedscenario,electricitydemandwillalmostdoublefrom2020to2050,reaching14270TWh.Thedeploymentofemissionsreductiontechnologiestakesplaceinphasesbasedonthecostandmaturityofthetechnologiesandtherequirementsofprogressivelystringentemissionreductions.Cost-effectiveandmaturetechnologies,particularlywind,solar,andenergystoragearescaleduprapidlyalreadyinthe2020sandcontinuetogrowuntil2050,whilethedeploymentofcarboncaptureandstorage(CCS)andothermoreexpensiveorlessmaturesolutionsbeginsinearnestafter2030(Table6).Costandrawmaterialresourceshinderbiomasspowergenerationfromplayingamajorrole50inemissionreductions,andthepotentialforfurtherhydropowerexpansionisalsoverylimited.Forexample,undertheICCSD1.5°Cscenario,powergenerationwithCCSstartstoscaleuparound2030andachievesacapacityof149GWwith600milliontonnesofCO2capturedin2050.DeploymentofBECCSwillbeginaround2040andreach48GWby2050,with280milliontonnesofCO2captured.Table6Annualcapacityadditionsofnon-fossilpowergenerationtechnologiesandcapacityfittedwithCCS(Heetal.,2021)Technologycapacitygrowth,GW/year2020-20302030-2050Wind7191Solar4287Hydropower30Nuclear810Biomass11BiomasswithCCS01.6FossilfuelswithCCS03.44.4.1TrendscomparedtobenchmarksFigure21AnnualchangeinCO2emissionsfromelectricitycomparedtoenergytransitionpathways51Powergenerationfromcoalgrewbyanaverageof4.0%overthepastfiveyears.Thetransitionpathwaysrequirecoalpoweroutputtofallby0.5–3.0%peryearfrom2020to2030.Year-to-yearchangeshavebeenvolatile,especiallysincethebeginningoftheCOVID-19pandemicin2020.Coal-firedpowergenerationincreased8%fromJanuarytoAugust2023incomparisontothesameperiodin2022,averysharpincrease.Thisjumpwas,however,mainlyduetotheseveredroughtsthataffectedhydropoweroutputfromAugust2022toJuly2023.Whentheinformationoncoal-firedpowergenerationiscorrectedforweathervariationsaffectinghydropower,windandsolarpoweroutput,thereappearstobeaslowingtrendin2022–2023.Whenhydropowergenerationreturnstotypicallevelsandtheincreaseincleanpowergenerationfromtherecordsolarpowerinstallationsof2023isrealised,powergenerationfromcoalislikelytofall.Thecontinuedincreaseincoalpowergenerationisinpartduetoelectrificationofenergyuse,particularlyinindustry,whichisprogressingmuchfasterthanprojectedinthetransitionpathways.Electrificationshiftsmoreofthecoalusetothepowersectorwithoutincreasingoverallcoalconsumptionorcarbonemissions,andcreatesconditionsfordecarbonisationaselectricitysupplybecomescleaner.Figure22AnnualchangeinCO2intensityofelectricitygenerationcomparedtoenergytransitionpathwaysTheCO2intensityofpowergenerationinChinafellbyanaverageof13g/kWhperyear,from570g/kWhin2018to520g/kWhin2023.In2023,CO2intensityimprovementsloweddowntothelowestratesince2015,butthiswasduetothecollapseofhydropowergeneration.Onaweather-correctedbasis,steadyimprovementscontinued.ThetransitionpathwaysrequireCO2intensitytofallto300–400g/kWhby2030,ortwotothreetimesasfastastheaverageofthepastfiveyears.CO2intensityhasfallenslightlyfasterin2020–2023thanin2017–2019,butfurtheraccelerationisneededtoalignwiththemajorityof52thetransitionpathways.Figure23Annualaddednon-fossilpowergenerationcomparedtoenergytransitionpathways,withwind,solar,nuclearandhydropowercapacityaddedeachyearconvertedtoannualelectricityoutputusingaveragecapacityfactorsforeachtechnologyTheadditionsofcleanelectricitygeneratingcapacityaregoingtoreachanewrecordin2023,withover200GWofsolarpowerinstallationsexpected.Thepreviousannualsolarpowerinstallationsrecordwas87GWin2022.Tocontrolforyear-to-yearvariationsinthecapacityfactorsofdifferentpowergenerationtechnologies,weconvertaddedwind,solar,nuclearandhydropowercapacitytoaddedannualgenerationusingaveragecapacityfactorsforeachtechnology.Onthisbasis,theaddedannualnon-fossilpowergenerationin2023willreachover400TWh,andexceedtheaverageannualgrowthintotalelectricitygeneration.Thismeansthatifcleanenergygrowthismaintainedandelectricityconsumptiongrowthisatorbelowthehistoricalaverage,powersectoremissionswillpeakinthenextfewyears.Addednon-fossilgenerationhasbeenintherangeprojectedinthetransitionpathwaysduringthepastfiveyears,andin2023,additionsarelikelytorisetotheupperendoftherangeinthepathways.Furthermore,amappingofplannedwindandsolarpoweradditionsin2021–2025byprovincialgovernmentsandthecentralgovernment,showsthatatotalof870GWwillbeaddedifthetargetsaremet81,takingcombinedwindandsolarinstalledcapacityin2025to1400GW.Thisadditionisfarahead81InternationalEnergyNetwork(2022).874.037GW!30provinces’windandsolarinstallationtargetsduringthe14thFive-YearPlanperiod.https://www.in-en.com/article/html/energy-2319588.shtml.Newsarticle.53ofChina’sheadlinetargetof1200GWwindandsolarby2030.CombinedwiththenationalFYPtargetfornuclearpowerandexpectedexpansionofhydropower,theaddedtotalnon-fossilpowergenerationwillmeettherangeofcapacityadditionsinalmostalltransitionscenarios,withtheexceptionoftheNGFSNetZero2050scenario,theonewiththemostambitiousoverallemissionpathway.Inonesense,thisshouldalreadyputChina’selectricitysectoronapathwaycompatiblewiththeglobaltemperaturegoals.However,therapidincreaseinpowergenerationmeantthatnon-fossilpowergenerationprovidedonlyhalfofadditionalpowergenerationin2017–2022,withtherestprovidedbyfossilfuels.Figure24AnnuallyaddedthermalpowercapacitycomparedtoenergytransitionpathwaysUntil2022,China’snetadditionsofthermalpowercapacity,mainlycoalandfossilgas,averagedalmost50GWperyear,oralmostonelargepowerplantperweek.Thisisamuchhigherratethaninthetransitionpathways,whichseeeithersmallnetadditionsorsignificantreductionsfrom2020to2030.Yet,2023sawasharpaccelerationinnewcoalcapacityasaresultofpermitsandrestartsofpreviouslysuspendedprojectsthatstartedin2020.Permittingnewcoal-firedpowerplantsacceleratedfurtherin2022and2023.In2020,Chinabecameoneofthefirstmajordevelopingcountriestocommittobecomecarbon54neutral.Sincetheannouncement,oneofXiJinping’scentralmessages82was“strictlycontrollinghigh-energy,high-emissionsprojects”,andinApril2021hepledgedspecificallythatChinawould“strictlycontrol”newcoalprojects83attheLeadersSummitonClimate84.4.4.2Focuson:China’sCoalPowerSurgeHowdidChinagofrompledging“strictcontrol”in2021toamajorsurgeinnewcoalprojectsin2022?Theturningpointwereconcernsoverelectricityshortagesintheautumnof2021andsummerof2022whichledtoapolicyreversal.Thefocusofenergypolicyhassinceshiftedfromdiscouragingandcontrollingnewcoalpowerprojectstopushingforacceleration,withtheregulatorssetting85atargetinSeptember2022tosharplyaccelerateconstructionstarts,andpushing86profitablecoalminingfirmstoinvestincoalpowergeneration.Whilethepowercruncheshavebeenthetriggeroftherecentcoalspree,theshiftingovernmentpoliciesoncoalhavechangedtheexpectationsofutilitiesandprovincialofficials,andthereareseveralcontextualandsystemicdrivers:●Inflexiblegridoperation:coalpowerisfarfromtheinevitableoptiontorespondtopowershortagesinChina.Aflexibleelectricitysystemwouldmakebetteruseofexistingpowerplantsandtransmissioninfrastructure.Thiswillfacilitateinter-provincetransmission,demand-sideresponseandelectricitystorage,whichreduceoreliminatetheneedfornewcoalpowerplantsaltogether.Yetreformshavebeenslowandpatchyatbest.●Self-reinforcing“coalrush”spiral:TheChinesegovernment’spropensityforabruptshiftsinpolicy,bestmanifestedbythehastydismantlingofthezero-COVID-19policy,haspromptedofficialsandcompaniesaliketoengageinan“enjoywhileitlasts”mindset.Whenalargenumberofpermitsarehandedout,marketparticipantsexpectthatthegovernmentwillclampdownontheexcesses,whichbecomesareasontosecureasmanypermitsaspossible.Thisdynamicplayedoutduringthecoalplantpermittingwaveof2015–2016,whichwaspromptlyfollowedbyaclampdownfirstonnewpermitsandthenonalreadypermittedprojectsin2017.●Entrepreneurialinstinctsofstate-ownedenterprisesandprovincialofficials:Ononehand,state-ownedenterprisesseethelooseningscrutinyoncoalasanopportunitytoobtainmarketsharebybuildingcapacity;ontheotherhand,provincesareseizingtheopportunitytoboosttheirpowercapacity.Coastalprovincesprefertogeneratepower82MinistryofEcologicalEnvironment.(2021).GuidingOpinionsonStrengtheningEcologicalEnvironmentalManagementinHighEnergy-ConsumptionandHigh-EmissionProjects.https://www.mee.gov.cn/xxgk2018/xxgk/xxgk03/202105/t20210531_835511.html.Governmentdocument.83XinhuaNews.(April2021).RemarksbyChinesePresidentXiJinpingatLeadersSummitonClimate.http://www.xinhuanet.com/english/2021-04/22/c_139899289.htm.News.84TheWhiteHouse.(April2021).LeadersSummitonClimateSummaryofProceedings.https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/23/leaders-summit-on-climate-summary-of-proceedings/.Governmentdocument.85JiemianNews.(Oct2022).Chinaacceleratestheapprovalprocessforcoal-firedpowerplants.https://news.sina.cn/gn/2022-10-13/detail-imqqsmrp2477197.d.html.Newsreport.86BeijixingNews.(Jan2023).In2022,theNationalDevelopmentandReformCommissionpromotedtheco-operationofcoalandcoal-firedpower,aswellascoal-firedpowerandnewenergy.https://m.bjx.com.cn/mnews/20230118/1283977.shtml.Newsreport.55locallyinsteadofrelyingonimportsfrominland,whileinlandprovincesarecountingonpowerexportstocoastalprovincestojustifytheircoalpowerinvestment.Bigenergyprojectsareatriedandtestedwaytoboostlocaleconomicactivity.Afterthecommitmentto“strictlycontrol”newcoalpowerprojects,theNationalEnergyAdministration(NEA)introducedapolicy87thatsetstrictconditionsfornewcoalpowerprojects.Newplantswillnotbeallowedforthepurposeof“bulkpowergeneration”,butonlyfor“supporting”roles:supportinggridstabilityandintegrationofvariablerenewableenergyintothegrid.However,thereisnoeffectiveenforcementoftheNEApolicythatismeanttoimplementthepledgeto“strictlycontrolnewcoalpower”.CREAassessmentofcoalpowerprojectsapprovedin2022–2023showsthatthemajorityoftheprojectsdidnotmeettherequirementsoftheNEApolicyandfoundthat:●Theprovincesbuildingmostnewcoalarenotusingitto“support”acorrespondinglylargebuildoutofcleanenergy.●Themajorityofprojectsareinprovincesthathavenoshortageofgeneratingcapacitytomeetdemandpeaks.●Mostnewprojectlocationsalreadyhavemorethanenoughcoalpowerto“support”existingandplannedwindandsolarcapacity.BetweenJanuary2022andJune2023,Chinapermitted152gigawatts(GW)andstartedconstructionon92GWofnewcoalpowercapacity.Thisiseighttimestheamountofcapacityenteringconstruction,andmorethantentimesthecapacitypermitted,intherestoftheworldduringthesameperiod.Another25GW,atleast,waspermittedinChinaJulytoSeptember202388.ThesituationhighlightstheneedtoreformChina’sgridoperation.Makinggridoperation,particularlyinter-provincetransmission,moreflexibleisthekeytoavoidingthekindsofelectricityshortagescurrentlybeingseen,reducingtheneedforcoal-firedpowercapacityandfacilitatingtheintegrationofvariablerenewableenergy.AnanalysisbyDraworldEnvironmentResearchCenterandCREA89foundthatgreaterflexibilitywouldreducetheneedforcoal-firedpowerasabackupduringthetransitiontoalower-carbongrid,avoidingtheneedfor30GWofcoal-firedcapacityintheEastChinagridalone.87NationalEnergyAdministration.(2021).SummaryoftheReplytoProposalNo.0481oftheFourthSessionofthe13thNationalCommitteeoftheChinesePeople'sPoliticalConsultativeConference(CPPCC).http://zfxxgk.nea.gov.cn/2021-08/27/c_1310486070.htm88AnnouncementscompiledfromPolarisNetworkreporting,whichisnotacompletelistinghttps://huodian.bjx.com.cn/yw/89CREA.(2022).Powersystemadequacyand“NewPowerSystem”developmentinChina.https://energyandcleanair.org/publication/power-system-adequacy-and-new-power-system-development-in-china/.Researchreport.56Figure25CoalpowerpipelineinChina;changesinprojectstatus,half-yearlySource:CREAanalysisofGlobalCoalPlantTrackerdata.4.4.3PoliciesinplaceRenewableenergyandnuclearpowerThe14thFive-YearPlanforrenewableenergydevelopment90istheoverarchingpolicythatcomprehensivelyenvisionsthedevelopmentofrenewableenergyinthisdecade.Itsetsmultiplegenerationandconsumptiontargetsby2025:●Theconsumptionofrenewableenergyisexpectedtogrowto1Gtce,coveringmorethan50%ofthegrowthinprimaryenergyconsumption.●Annualelectricitygeneratedfromrenewableenergyshouldreach3300TWh.Theadditionofrenewablesshouldmakeupmorethanhalfofnewlyaddedcapacity,andsolarandwindcapacityshoulddoubleduringthe14thFYPperiod.●Thequotasforrenewableelectricityconsumptionshouldberaisedto33%oftotalelectricityuse,withthenon-hydroconsumptionquotareaching18%.●Non-electricityusagesuchasgeothermal,biomassheatingandfuel,andsolarenergyheatingshouldgrowabove60Mtce.90NationalDevelopmentandReformCommissionofChina.(2022).RenewableEnergyDevelopmentPlanningduringthe14thFYP.https://www.ndrc.gov.cn/xwdt/tzgg/202206/t20220601_1326720.html?code=&state=123.Policy.57The14thFive-YearPlanfortheModernEnergySystemsetsthetargetsfortheexpansionofnuclearpowercapacityfrom50GWin2020to70GWin2025,andhydropowercapacityfrom340GWin2020to380GWin2025,excludingpumpedstorage.TheChinaNuclearEnergyDevelopmentReport(2023)91predictsthatChinaispoisedtobecometheworld’sleadingcountryintermsofoperationalnuclearpowercapacityby2030.Additionally,itforecaststhatby2035,nuclearenergywillmakeupapproximately10%ofChina’stotalelectricitygeneration.Intermsofmorespecificpolicies,OpinionsonPromotingtheDevelopmentofNon-HydroRenewableEnergyPowerGeneration,providesguidanceonthenon-hydrorenewableenergysubsidies92.Italsoinitiatedworkonashiftfromtariffsubsidiesramp-downmechanismtotheGreenElectricityCertificateforelectricitytradingastheinstrumentsupportingrenewableelectricitybuildout.Meanwhile,theMediumandLong-termPlanfortheDevelopmentoftheHydrogenEnergyIndustry(2021-2035)93drawstheroadmapwith2025,2030,and2035targetsforthehydrogenindustry.InAugust2023,nationalguidelines94forthehydrogenenergyindustrywerereleased,aimingtocreateacomprehensivestandardsystem.Over30provincesandcitieshaveincludedhydrogenenergydevelopmentintheir14thFYPs,withdetailedimplementationplansinplaceslikeBeijing,Hebei,SichuanandInnerMongolia.Accordingtothe2023ChinaHydrogenEnergyIndustryDevelopmentBlueBook95,in2022,Chinahadahydrogenproductioncapacityof41milliontons/year,yielding37.81milliontons/year.By2023,inlinewithcarbonpeakgoals,Chinaaimstosurpass50milliontons/yearinhydrogenproduction.TheDevelopmentPlanforBiologicalEconomyalsohighlightedbiomassenergyasoneofthe“exampleprojects”andencouragedsubsidisingbiomass96.ConsumptionofRenewableEnergyElectricityIn2019,theNDRCandtheNEAjointlyissuedtheNoticeonEstablishingandEnhancingtheMechanismtoEnsuretheConsumptionofRenewableEnergyElectricity97,outliningtheestablishmentoftheconsumptionquotamechanismofrenewableenergyelectricityinvariousprovincial-levelregions.Thesequotasrepresentthetargetproportionofrenewableenergyelectricityinthetotalelectricity91ChinaNuclearEnergyAssociation.(2023).ChinaNuclearEnergyDevelopmentReport(2023).https://www.china-nea.cn/site/content/43211.html92MinistryofFinanceofChina.(2020).SeveralOpinionsonPromotingtheHealthyDevelopmentofNon-WaterRenewableEnergyPowerGeneration.http://www.gov.cn/zhengce/zhengceku/2020-02/03/content_5474144.htm.Policy.93NationalDevelopmentandReformCommissionofChina.(2022).MediumandLong-termPlanfortheDevelopmentoftheHydrogenEnergyIndustry(2021-2035).MediumandLong-termPlanfortheDevelopmentoftheHydrogenEnergyIndustry(2021-2035).https://www.ndrc.gov.cn/xxgk/zcfb/ghwb/202203/t20220323_1320038.html?code=&state=123.Policy.94NationalStandardizationAdministrationofChina.(2023).GuidelinesfortheConstructionoftheHydrogenEnergyIndustryStandardSystem(2023Edition)https://www.gov.cn/zhengce/zhengceku/202308/content_6897986.htm95BeijingKingzoneGeneralOil&GasConsultingCo.(2023).ChinaHydrogenEnergyIndustryDevelopmentBlueBook(2023)https://3cst.cn/mobile/information/yNUz0BNkITGS11ea8d6300163e0473d896NationalDevelopmentandReformCommissionofChina.(2021).TheDevelopmentPlanforBiologicalEconomy.https://www.ndrc.gov.cn/xxgk/zcfb/ghwb/202205/t20220510_1324436.html?code=&state=123.Policy.97NationalDevelopmentandReformCommissionofChina.(2019).NoticeonEstablishingandEnhancingtheMechanismtoEnsuretheConsumptionofRenewableEnergyElectricity.https://www.gov.cn/xinwen/2019-05/16/content_5392082.htm58consumptionofeachprovince.Thenoticeclearlyspecifiesthatpowersuppliersandpowerconsumingcompaniesarejointlyresponsibleforrenewableenergyelectricityconsumptionrequirements.Inpractice,however,mostprovincescurrentlyrelyongridcompaniestoensurethefulfilmentoftheseconsumptionquotas.Startingin2020,theNDRCandNEAhaveannuallyreleaseddocumentsspecifyingthesequotasforeachprovinceforthecurrentyearandexpectedtargetsforthefollowingyear.In202398Sichuan,Qinghai,andYunnanstandoutwiththehighestquotaat70%,andtheyarealsomajorhydropowerproducers.Fornon-hydropower,Qinghai(27.2%),Ningxia(24.5%),andJilin(23.5%)havethehighestquota,andtheyareprominentinsolarandwindpowergeneration.WholeCountyDistributedSolarInitiativeInJune2021,theNationalEnergyAdministrationlaunchedthe“wholecountydistributedsolar99”pilotprogrammeforrooftopsolarinstallationsatthecounty(city,district)level.By2023,distributedsolarconstitutedhalfoftheunprecedentedincreaseinsolarpowercapacity,highlightingthesuccessofthemodel.Centraltothisinitiativeistheleadershipofcountygovernments,whichspearheadtheimplementationprocessintheirjurisdictions.Theyoverseetheentirelifecycleofdistributedsolarprojects,includinginvestment,financing,construction,operationandmaintenance.Thisapproachofcounty-led“centraliseddevelopmentofdistributedsolar”hasenabledrooftopsolaratavastscale.Initially,676areaswereselectedforthisinitiative,withspecificinstallationtargetsforgovernmentbuildings(50%),publicbuildings(40%),industrialandcommercialfacilities(30%),andresidentialrooftops(20%)inthepilotcounties.Theprogrammeaimedtobecompletedineachprovincebytheendof2023.Thisinitiativehasdramaticallyboosteddistributedsolardevelopment,withdistributedinstallationsaccountingfor53%nationalsolarcapacityin2021,surpassingcentralisedsolarpowerstations.By2022,thisproportionhadgrownto58%andremainedabove50%inthefirsthalfof2023evenasoverallsolarcapacityadditionsincreasedby150%.TheprogrammehasthereforebeenanessentialdriverofChina’srapidscale-upofsolarinstallations.However,asofApril2023,progresshasbeenuneven.Only22%oftheplannedcapacityhadbeenachievednationwide,withsomeprovinceslikeHenanandShandongexceeding30%whileotherslaggedbelow15%.Theentryoflargestate-ownedenterprisesintothemarketcrowdedoutprivateenterprisesbutfacedchallengesindealingwithlocalgovernments,commerce,andresidents,causingdelaysinprojectimplementation100.Large-scaleCleanEnergyBasesChinaispursuingbothdistributedandcentralisedrenewableenergydevelopment.The14thFYPfortheModernEnergySystememphasisestheneedtoacceleratelargewindandsolarpowerprojectsindesertareasandotherregions,aswellasbuildcleanenergybasesinareasliketheupperYellowRiver,98NationalDevelopmentandReformCommission.(2023).NoticeontheConsumptionResponsibilityWeightsforRenewableEnergyElectricityin2023andRelatedMatters.https://www.ndrc.gov.cn/xxgk/zcfb/tz/202308/t20230804_1359101.html99NationalEnergyAdministration.(2021).NoticeRegardingtheSubmissionofPilotSchemesforDistributedSolarPowerontheRoofsofWholeCounties(Cities,Districts).https://www.gov.cn/zhengce/zhengceku/2021-09/15/content_5637323.htm100ChinaPower.(2022).LatestDevelopmentofWholeCountryDistributedSolarInitiative.http://mm.chinapower.com.cn/zx/hyfx/20220819/163598.html59Xinjiang,andnorthernHebei.InFebruary2022,theNDRCandtheNEAissuedthePlanforLargeWindandSolarPowerBasesinDesertAreas.Thisambitiousplansetsatargetof455GWofwindandsolarcapacityby2030.Thefirst97GWofprojectsareunderway,butprogressisslowerduetogridintegrationandunclearpolicyframeworks.AsofJuly2023,only30GWareoperational.Theselarge-scalecleanenergybasesfacechallengesinbalancingcleanenergywithcoalpower.Theytypicallyrequirethermalpowerbackup,butthelowutilisationhoursofsuchbackupcanleadtolosses,especiallywhencoalpricesarehigh.Thishasledtoalackofenthusiasmamongpowergenerationgroupstoprovidesupportivepowersourcesfornewenergyprojects.Paradoxically,despitetheintentiontoreducecoalpower’sshare,theprevailingapproachhasnotsignificantlyreducedtherelianceonthermalpower.Furthermore,inthefirstbatchofthelarge-scalecleanenergybaseprojects,thebalancebetweenconsumptionwithintheprovinceandtransmissiontootherprovincesisroughlyequal,whilethesecondbatchofprojectsfocusesmoreonexternalpowertransmission.However,thecostsassociatedwithbuildingpowersourcesandequippingthemwiththermalpowerandenergystorage,alongwiththehighcostofultra-high-voltagetransmissionlines,makeituncertainwhethertheelectricitysenttoeasternregionscancompetewithlocalcoalpowerpricesandlocalrenewableenergyprices.Figure26China’scleanenergybasesenvisionedinthecentralandprovincialFive-YearPlans101.MapbyTomPraterforCarbonBrief101MyllyvirtaandZhang(May2022).Analysis:WhatdoChina’sgiganticwindandsolarbasesmeanforitsclimategoals?CarbonBrief.https://www.carbonbrief.org/analysis-what-do-chinas-gigantic-wind-and-solar-bases-mean-for-its-climate-goals/60EnergystorageAsconfirmedbyNDRCandNEA’sGuidingOpinionsonAcceleratingtheDevelopmentofNewEnergyStorage102,energystoragetakesa“keysupportingrole”incarbonpeakingandcarbonneutralityintheenergysector.Itencouragesadevelopmentofenergystorageonmultiplelevels,includingmakingnationalandprovincialleveldevelopmentplans,promotingenergystorageprojectsintegratedwithelectricitygeneration(generation-side)andelectricitydistribution(grid-side),aswellassupportingbuilding-level(behindthemetre)storage.InFebruary2023,theNEAreleasedguidelinestograduallyestablishanewenergystoragestandardsysteminlinewithChina’scontextandinternationalstandards.Asthecapacityofvariablerenewableenergysourceslikewindandsolarpowergrows,theneedforextendedenergystoragecapacityhasbecomecritical.Nearly30provincesinChinahaveintroducedplanstopromote“renewableenergycombinedwithenergystorage”toalleviatepeakpowersupplychallenges.Thesepoliciesmandatethatrenewableenergysourcesbeaccompaniedbyenergystoragesystems,typicallyaccountingfor10%to20%oftheinstalledcapacityandrequiringatleastfourhoursofenergystoragedurationwhilekeepingcostslow.However,thesemandatoryrequirementshavealsoimposedfinancialburdensonrenewableenergygenerationcompanies.Andenergystoragetechnologyapplicationsontheusersideoftenofferbettervalue.NewPowerSystemInJune2023,NEAreleasedtheBlueBookontheDevelopmentoftheNewPowerSystem103.Itoutlinesathree-phaseroadmap(Figure27)forthenewpowersystem.●AccelerationTransformationPhase(presentto2030):Thisphaseacceleratesthetransitiontoanewpowersystem,promotinglow-carbonenergyadoptionacrossindustrieswithagoalofachievinga25%non-fossilenergyconsumptionshare.Italsofosterscentralisedanddistributedrenewableenergysourceswhileencouragingindustriestomovefromtheeasttothecentralandwesternregions.●GeneralFormationPhase(2030to2045):Duringthisperiod,thenewpowersystemtakesshape,withevolvinginfrastructureandtechnology,establishingthefoundationsofthenewenergylandscape.●ConsolidationandImprovementPhase(2045to2060):Thisfinalphasefocusesonrefiningandstabilisingthenewpowersystem.102NationalDevelopmentandReformCommission.(2021).GuidingOpinionsonAcceleratingtheDevelopmentofNewEnergyStorage.https://www.ndrc.gov.cn/xxgk/zcfb/ghxwj/202107/t20210723_1291321.html.Policy.103NationalEnergyAdministration(2023)BlueBookontheDevelopmentoftheNewPowerSystem.http://www.nea.gov.cn/download/xxdlxtfzlpsgk.pdf.Researchreport.61Figure27China’sNewPowerSystemRoadmap,fromBlueBookontheDevelopmentoftheNewPowerSystemTheBlueBookalsooutlinesthedevelopmentroleofcoalpower.Itclearlystatesthatintheneartomediumfuture,thereremainspotentialforgrowthinbothcoalpowercapacityandelectricitygeneration.Theexpansionofcoalpowerisprimarilyintendedtoaddresspeakelectricitydemandandprovideemergencybackupcapacity.GreenElectricityTradingandGreenCertificatesTopromotetheuseofcleanenergyinChina,agreencertificatesystem104wasestablishedin2017.Underthissystem,renewableenergycompaniescanearnandsellgreencertificatesbasedontheirelectricitygeneration.However,duetothevoluntarynatureofthesystemandtheinabilitytoconveytheenvironmentalbenefitstoend-users,greencertificatetradingwasinactive.Toaddressthisissueandencouragegreenenergyadoption,inAugust2021,theNDRCandNEAlaunchedapilotprogrammeforGreenElectricityTrading105.ItdefinestheframeworkofChina’sgreenelectricitytradinginseveralaspects:●Definitionof“greenelectricity”:startedwithwindandsolar,andqualifiedhydropowermaybeincludedlater.●TradingFramework:pilotwithannualormulti-monthstradingagreements,andalsoencourageslong-termpowerpurchaseagreements.●Priorityprinciple:greenelectricityshouldbeprioritisedineachstageofthetrading,coveringorganising,executionandsettlement.104NationalDevelopmentandReformCommissionofChina.(2017).NoticeontheTrialImplementationoftheRenewableEnergyGreenPowerCertificateIssuanceandVoluntarySubscriptionTradingSystemhttps://www.ndrc.gov.cn/xxgk/zcfb/tz/201702/t20170203_962895.html105NationalDevelopmentandReformCommissionofChina.(2021).GreenElectricityTradingPilotWorkPlanhttp://www.gov.cn/xinwen/2021-09/07/content_5636072.htm.News.62●Format:directpurchasefromgenerators,orpurchasefromgrid.●Pricingmechanism:non-restrictive,andalsoencouragesthepricetobehigherthanfeed-intariff(FIT)and/orpurchasepricefromgridto“reflectthevalueofgreennessandenvironment”.●Expectationfortransitionandfuturedevelopment:greenelectricitytradingshouldremainprioritised,andencouragingintegrationwithothercarbonregulationssuchasrenewableenergyconsumptionquotas,andChinaCertifiedEmissionReductionfromthecarbontradingmarket.“Greenelectricitypriority”isafundamentalprincipleofthepilotprogramme.InJanuary2022,NDRCandNEAissuedguidance106emphasisingtheimportanceofdeterminingtheenvironmentalvalueofgreenelectricitythroughmarketmechanisms,encouraginguserstodirectlypurchasegreenelectricityandurginggridcompaniestoprioritisedirectgreenelectricitytransactions.InMay2022,theStateCouncilreleasedanimplementationplan107highlightingtheneedtoprioritisegreenelectricityintradingorganisation,gridmanagementandprice-settingmechanisms.Later,NDRCandNEAissuedanotice108regardingthesigningandperformancesoflong-termelectricitycontractsin2023,andsaidgreenelectricityprioritiesintheabovefields“mustbeagiven”.Furthermore,thegovernmenthasissuedmultipledocumentstoboostdemandforgreenelectricitytradingandexpandthemarket.InJanuary2022,theGreenConsumptionImplementationPlan109wasreleasedtoencourageindustryleaders,largestate-ownedenterprises,andmultinationalcorporationstoleadinconsuminggreenelectricity.Itenforcesmandatoryrequirementsforhigh-energy-consumingenterprisestousegreenelectricity,withlocalauthoritiessettingminimumproportions.Italsoestablishesamechanismlinkinggreenelectricitytradingwithrenewableenergyconsumptionquotas,allowingpowerconsumingcompaniestofulfiltheirrenewableenergyconsumptionquotabypurchasinggreenpowerorgreencertificate.February2023,governmentdepartmentsissuedanotice110,promotingcomprehensiveparticipationofsubsidisedprojectsingreenelectricitytrading.InSeptember2023,ElectricityDemand-SideManagementMeasures(2023Edition)111wasjointlyissuedbyvariousgovernmentdepartments,promotinggreenelectricityusage,particularlywithinnewinfrastructure,andencouraginglocalgreenelectricityconsumption.Additionally,there’sanemphasisonkeyregionsandenterprisesincreasingtheirgreenelectricityconsumptionshare.Greencertificatesserveasindirectevidenceofgreenenergyconsumption,whilegreenelectricitytransactionsofferdirectproof.Initially,thegreencertificatetradingmarkethadverylowtradingvolumes,butitbecamemoreactiveinearly2022.InAugust2023,governmentdepartmentsjointly106NationalDevelopmentandReformCommissionofChina.(2022).GuidanceonAcceleratingtheConstructionofaUnifiedNationalElectricityMarketSystem.https://www.ndrc.gov.cn/xxgk/zcfb/tz/202201/t20220128_1313653.html107StateCouncilofChina.(2022).ImplementationPlanforPromotingHigh-QualityDevelopmentofNewEnergyintheNewEra.https://www.gov.cn/zhengce/content/2022-05/30/content_5693013.htm108NationalDevelopmentandReformCommissionofChina.(2022).ContractSigningandPerformanceintheLong-termElectricityMarketfor2023.https://www.ndrc.gov.cn/xwdt/tzgg/202212/t20221222_1343757.html109NationalDevelopmentandReformCommissionofChina.(2022).GreenConsumptionImplementationPlan.https://www.ndrc.gov.cn/xwdt/tzgg/202201/t20220121_1312525.html110IdeaCarbon(2023).SurplusfromGreenElectricityTradingtoOffsetNationalSubsidiesortoBeOwnedbytheStatehttps://www.ideacarbon.org/news_free/59010/?pc=pcNews.111NationalDevelopmentandReformCommissionofChina.(2023).ElectricityDemand-sideManagementMeasures(2023Edition).https://www.ndrc.gov.cn/xxgk/zcfb/ghxwj/202309/t20230927_1360902.html63issuedanotice112,clarifyingthatgreencertificatesarethesoleproofofenvironmentalattributesforChina’srenewableenergyelectricityvolume.Theissueofgreencertificateshasexpandedtoencompassallregisteredandapprovedrenewableenergygenerationprojects,achievingfullcoverage.Tradablegreencertificatescanserveasproofofrenewableenergyconsumptionandcanbetransferredbetweenpowergenerationcompaniesandusersthroughvariousmeans,includinggreencertificatetradingandgreenelectricitytransactions.Undercurrentpolicies,it’simportanttonotethatgreencertificatescanonlybetradedonce,andpurchasersarenotpermittedtoresellthem.Thisrestrictionsignificantlylimitsthetransferabilityofgreencertificates.GreenElectricityTradingandCCERsbothcanhelpcarbon-emittingcompaniesmeetcomplianceobligations.Underthecurrentmarketrules,renewableenergyprojectswithCCERregistrationscansimultaneouslysellgreencertificatesandCCERstogenerateadditionalrevenue.ElectricitySpotMarketChina’selectricitymarketdevelopmentdiffersfrommanyglobalmarketsbecauseitprioritisesmedium-tolong-termtradingbeforespotmarkets.Thisapproachisaimedatprovidingpricestabilityandriskmitigation.Currently,medium-tolong-termmarketsdominateChina’selectricitytrade.In2015,theImplementationOpinionsonPromotingtheConstructionofElectricityMarkets113proposedgraduallyestablishingmarket-basedmechanismsforquantity-basedelectricitytrading,withafocusonmedium-tolong-termtradingandsupplementedbyspottrading.Theobjectivewastocreatearisk-hedgingplatforminthemediumtolongtermwhilediscoveringpricesinthespotmarketandofferingacomprehensiverangeofelectricitymarketproductsandservices,includingday-ahead,real-timetrading,andancillaryservices.In2017and2021,pilotprovincesandcitieswerechosenforspotmarkets.In2022,nationalguidelines114wereintroducedtoestablishaunifiedelectricitymarketsystemby2025,integratingmedium-tolong-term,spot,andancillaryservicesmarkets.Spotmarketsarecategorisedasprovincial,inter-provincial,andnational.Provincialspotmarketsareoperatingcontinuously,whileinter-provincialmarketsaredeveloping.Theaimistocreateaunifiednationalspotmarketby2030.InSeptember2023,theBasicRulesfortheElectricitySpotMarket(Trial)wereintroduced,providingunifiednationalguidelinesforprovincialandinter-provincialspotmarkets,andpotentiallypavingthewayforaneventualnationalmarket.TheBasicRulesstressinter-provincialandprovincial/regionalspotmarketintegration.Theyaimtoincludevariousmarketparticipantsininter-provincialmarkets,fosteringparticipationfrompowergenerators,users,andretailers.Inter-provincialspottradinghasplayedaroleduringpeakelectricitydemandin2023.112NationalDevelopmentandReformCommissionofChina,MinistryofFinance,andNationalEnergyAdministrationonAchievingFullCoverageofGreenPowerCertificatesforRenewableEnergyandPromotingRenewableEnergyElectricityConsumption.https://www.ndrc.gov.cn/xwdt/tzgg/202308/t20230803_1359093.html113NationalEnergyAdministration.(2015).ImplementationOpinionsonPromotingtheConstructionofElectricityMarkets.https://www.gov.cn/xinwen/2015-11/30/5018221/files/87556b7e1f4f4aaab86ac7c99f5acf3f.pdf114NationalDevelopmentandReformCommission.(2022).GuidingOpinionsoftheCentralCommitteeoftheCommunistPartyofChinaandtheStateCouncilonAcceleratingtheConstructionofaNationwideUnifiedElectricityMarketSystemhttps://www.ndrc.gov.cn/xxgk/zcfb/tz/202201/t20220128_1313653.html64Theserulesalsofocusonrenewableenergyparticipation,designingmarketmechanismsalignedwiththeircharacteristics,andencouraginginvolvementfromdistributedgeneration,loadaggregators,energystorage,andvirtualpowerplantsinelectricitytrading.InOctober2023,theNDRCandtheNEAissuednewdirectives115forthedevelopmentofelectricityspotmarkets.Theyrequiremostprovincestobereadyforspotmarkettrialsbyyear-end2023andsetspecifictimelinesformarketdevelopment.Forexample,ZhejiangistaskedwithlaunchingcontinuoussettlementtrialsbyJune2024,andFujianmustconductlong-termsettlementtrialsbylate2023.Thedirectivesalsooutlinecriteriaforfullspotmarketoperation,withmostinitialpilotprovincesmeetingthesecriteriaafterayearofcontinuousoperation.Intermsofregionalmarkets,SouthChina’sspotmarketisslatedtobeginsettlementtrialsbyend-2023,whiletheBeijing-Tianjin-HebeimarketaimsforsimulatedtrialsbyJune2024.Thedirectivesemphasiseopeningupspotmarketstodiversepowersources,aligningwiththe2030goalofcomprehensiveparticipationofnewenergysources.Theyalsoencouragegreaterparticipationofdistributedenergysources.CapacitypaymentmechanismAslarge-scalerenewableenergygenerationisintegratedintothepowergrid,coalpowerunitsaresupposedtoshiftfromprimarysourcesofgenerationtobackupandsystemregulationroles116.However,coalpowerunitsinChinahavefacedchallengesinrecoveringtheircosts.Despitecentralgovernmentpressuretoensurepowersupply,somecoalgeneratorshavebeenhesitanttooperateastheirfuelandoperatingcostsoftensurpasstherevenuegeneratedfromelectricitysales.Theabsenceofacostrecoverymechanismforgeneratingcapacityhasraisedconcernsaboutthereliabilityofcoalpower’scontributiontopeakloadregulation,potentiallyleadingtounderutilisedcoalpowerassets.Recognizingthesechallenges,theGuidingOpinionsonAcceleratingtheConstructionofaNationalUnifiedElectricityMarketSystem117,releasedinJanuary2022,advisedregionstoexplorevariousmethods,includingscarcitypricing,capacitypayment,andcapacitymarketstoestablishcostrecoverymechanismsforgeneratingcapacitytailoredtotheirneeds.Inlinewiththisguidance,Chinahasnowexpandedthecapacitypaymentmechanism.AsofNovember2023,acoalpowercapacitypaymentmechanism118hasbeenintroduced.Provincial-levelcoalcapacityelectricitypriceshavebeenannounced,withimplementationscheduledfor1January,2024.Themechanismwillprovideanadditionalincentiveforpowercompaniestocompletethenewlypermittedcoalpowerplants,aswellasanincentivetodelaytheretirementofexistingcoalpowercapacity.Atthesametime,thepaymentscouldmakethetransitionofcoalpowertoasupportingroleinthegrid,involvinglowerutilisationhours,morepalatablepoliticallyandfinancially.ItalsotransferssomeofthecostofmaintainingChina’sverylargecoalpowercapacityfromstate-ownedpower115NationalDevelopmentandReformCommission.(2023).NoticeonFurtherAcceleratingtheConstructionoftheElectricitySpotMarkethttps://www.ndrc.gov.cn/xxgk/zcfb/tz/202311/t20231101_1361704.html116NationalEnergyAdministration.(2021).ResponsetotheProposalonHigh-QualityDevelopmentoftheCoalPowerIndustryUndertheCarbonNeutralityGoalhttp://zfxxgk.nea.gov.cn/2021-08/27/c_1310486070.htm117NationalDevelopmentandReformCommission.(2022).GuidingOpinionsonAcceleratingtheConstructionofaNationalUnifiedElectricityMarketSystem.https://www.ndrc.gov.cn/xxgk/zcfb/tz/202201/t20220128_1313653.html.Policy.118NationalDevelopmentandReformCommission.(2023).NoticeRegardingtheEstablishmentofaCoalPowerCapacityPaymentMechanism.https://www.ndrc.gov.cn/xwdt/tzgg/202311/t20231110_1361899.html.Policy.65companiestoindustrialandcommercialelectricityconsumersineachprovince,whichcouldencourageprovincialofficialstoavoidexcesscapacity.Priortothis,Chinahadimplementedcapacitypaymentforpumpedstoragepowerstations119andcertainnaturalgaspowergenerationstationsinspecificregions.IncrementalDistributionInSeptember2023,China’sNDRCissuedapublicnoticeseekingfeedbackontheDraftofDivisionofIncrementalDistributionBusinessDistributionAreas120.Incrementaldistribution,aproductofthe2015powersystemreform,isavitalpathwayforprivateinvestmentinthegridsector,balancingagainsttraditionalpowergridenterprises,mitigatingmonopolies,optimisinggridcosts,andenhancingservicequality.Theproposedchangesinthedraftmainlyfocusonclarifyingthedivisionprinciples,specifyingthattheprimaryrecipientsofincrementaldistributionnetworksarerenewableenergyresources,simplifyingareadivisioncriteria,andfurtherdefiningtherightsandresponsibilitiesofdistributionbusinesses.Table7SelectedpoliciesrelatingtotheelectricitysectorPolicynameReleaseTargetsandHighlightsdate14thFive-YearPlanfor2022-03●Duringthe“14thFive-YearPlan”period,carbondioxideemissionsperunitModernEnergySystem,ofGDPdroppedby18%infiveyears.(NationalDevelopmentandReformCommissionand●By2025,theproportionofnon-fossilenergyconsumptionwillincreasetoothers)about20%,theproportionofnon-fossilenergypowergenerationwillreachabout39%,thelevelofelectrificationwillcontinuetoimprove,andelectricitywillaccountforabout30%offinalenergyconsumption.●Achieveacumulativereductionof13.5%inenergyconsumptionperunitofGDPoverthefiveyears.●By2025,theproportionofflexiblepowersupplywillreachabout24%,andthepowerdemandsideresponsecapacitywillreach3%to5%ofthemaximumelectricityload.●Operatingnuclearpowercapacitywillreach70GWandhydropowercapacity380GW.●Theproportionofnon-fossilenergyconsumptionwillreach25%in2030.OpinionsonImproving2022-02●Duringthe“14thFive-YearPlan”period,thebasicfoundationforanInstitutions,Mechanismsinstitutionalframeworkforpromotinggreenandlow-carbonenergyandPolicyMeasuresfordevelopmentwillbeestablished.GreenandLow-CarbonTransitioninEnergySector,●By2030,thebasicfoundationsofacompletesystem,includingapolicy(NationalDevelopmentandsystemforgreenenergyandlow-carbondevelopment,willbeestablished.ReformCommissionandothers)ImplementationPlanforthe2021-11●By2025,theaveragecoalconsumptionintensityofcoalpowergenerationRetrofittingandUpgradingshoulddecreasebelow300gce/kwh;during“14thFive-YearPlan”period,ofCoal-firedPowerPlants,retrofit200GWcoalpowertoincreasetheirflexibility.(NationalDevelopmentandReformCommissionandothers)119NationalDevelopmentandReformCommission.(2023).NoticeRegardingCapacityPricingforPumpedStoragePowerStationsandRelatedMatters.https://www.ndrc.gov.cn/xwdt/tzgg/202305/t20230515_1355745.html120NationalDevelopmentandReformCommissionofChina.(2023).DraftofDivisionofIncrementalDistributionBusinessDistributionAreas.https://www.ndrc.gov.cn/hdjl/yjzq/202309/P020230925404913402231.pdf66PolicynameReleaseTargetsandHighlightsdateGuidingOpinionson2021-06●Bytheendofthe“14thFive-YearPlan”,thedomesticcoaloutputwillbeHigh-QualityDevelopmentcontrolledatabout4.1billiontonnes,andthenationalcoalconsumptionoftheCoalIndustryinthewillbecontrolledatabout4.2billiontonnes,withanaverageannual"14thFive-YearPlan",consumptiongrowthofabout1%.(ChinaCoalIndustryAssociation)14thFive-yearplanfor2022-06●By2025,non-fossilenergyconsumptionwillreach20%intheenergymix;renewableenergyrenewableenergyconsumptionwillreach1000Mtce;renewableenergydevelopment,(Nationalwilltakeover50%ofprimaryenergyconsumptiongrowth;renewableDevelopmentandReformpowergenerationwillreach3300TWhforpowergeneration;windandCommissionandothers)solarpowergenerationshoulddouble.●By2030,non-fossilenergyconsumptionwillreach25%intheenergymix;solarandwindpowercapacitywillreach1200GW.OpinionsonPromotingthe2020-02●Improvethecurrentsubsidymethod;improvethemarketallocationofDevelopmentofNon-Hydroresourcesandthesubsidyretreatmechanism;optimisethesubsidyRenewableEnergyPowerpaymentprocess.Generation,(MinistryofFinanceandothers)GreenPowerTradingPilot2021-09●StateGridCorporationandSouthernGridCorporationLaunchGreenWorkPlan,(NationalElectricityTradingPilotDevelopmentandReformCommissionandothers)●Marketparticipantsinvolvedingreenelectricitytradingarerequiredtoobtainapprovalfromtherelevantlocalgovernmentauthorities.Thisprimarilyincludesgridcompanies,windandsolarpowergenerationcompanies,electricityusers,andelectricityretailcompaniesGuidingOpinionson2021-07●By2025,realisethetransformationofnewenergystoragefromtheinitialAcceleratingthestageofcommercialisationtolarge-scaledevelopment,withaninstalledDevelopmentofNewEnergycapacityofmorethan30millionkilowatts.Storage,(NationalDevelopmentandReform●By2030,realisefullycommercialisationofnewenergystorage.Commissionandothers)BlueBookonthe2023-06●AccelerationTransformationPhase(Presentto2030):ThisphaseDevelopmentofNewPoweracceleratesthetransitiontoanewpowersystem,promotinglow-carbonSystems,(NationalEnergyenergyadoptionacrossindustrieswithagoalofachievinga25%Administration)non-fossilenergyconsumptionshare.Italsofosterscentralisedanddistributedrenewableenergysourceswhileencouragingindustriestomovefromtheeasttothecentralandwesternregions.●GeneralFormationPhase(2030to2045):Duringthisperiod,thenewpowersystemtakesshape,withevolvinginfrastructureandtechnology,establishingthefoundationsofthenewenergylandscape.●ConsolidationandImprovementPhase(2045to2060):Thisfinalphasefocusesonrefiningandstabilisingthenewpowersystem.PlanforLargeWindand2022-02●By2030,theplannedconstructionofwindandsolarpowerbaseswillhaveSolarPowerBasesinatotalinstalledcapacityofapproximately455GWDesertAreas,（NationalDevelopmentandReformCommissionandothers)4.4.4DatadisclosureTheChinaElectricityCouncilpublishesmonthlydataonpowergenerationandpowergeneratingcapacitybytechnologyandbyprovince,aswellaspowerdemandbysectorandbyprovince.Theheatrateofcoal-firedpowerplants(gramsstandardcoalperkilowatt-hour)isalsopublishedmonthly.Thisprovidesaverydetailedandtimelyviewofemissionstrendsinthepowersector.Themaingapisthebreakdownofthermalpowergenerationbyfuelwhichisonlymadeavailableannuallyandwitha67delayof1–2years.4.5Industry2023Highlights●Emission:Industrialenergyconsumptiongrowthincreasedatahighrate,reflectingtheconsistencyofanenergy-intensivepatternofeconomicgrowth.Despitethat,electrificationhasprogressedfasterintheindustrialsector,anddirectcoalconsumptionintheindustryhasbeenfallingquiterapidly,largelydrivenbyairpollutionpoliciesrequiringthereplacementofcoalwithgasandelectricity.●Sectoraldevelopment:Progressoncleantechnologymanufacturinghasbeenrapidsincethecarbonneutralityannouncementin2020,andhasacceleratedfurtherin2022–2023,asaresultofanunprecedentedboomininvestment.Ontheotherhand,thedevelopmentofcoal-basedsteelmakingcapacitycontinuedatahighratein2023,remainingoutofstepwiththeprospectofemissionspeakingandashifttomoresteelproductionfromscrap.●Policymaking:MEEstartedtorequestsevenenergy-intensiveindustrialsectorstoreportandverifyemissionsin2022.Buildingonthat,amoredetailedactionplanofemissionsreportingforkeyindustrialsectors2023–2025wasreleasedinOct2023.ItisseenasanimportantsteptosteadilyexpandETSby2025,embracingotheremissions-intensiveindustries–cement,steel,andaluminium.TheindustrialsectoristhelargestenergyconsumerinChina,accountingfor60%oftotalfinalenergyconsumption.Forexample,undertheICCSD1.5°Cscenario,theend-useenergydemandoftheindustrysectorwillpeakbefore2025atroughly2.2billiontonnesofcoalequivalent(Gtce),upfrom2.18Gtcein2020,andthengraduallydeclineto1.41Gtceby2050.TheindustrialsectoralsoplaysadominantroleinCO2emissions,mainlyduetolargeenergydemandandcoal-heavyenergymix,butalsoduetoprocessemissions,particularlyfromcement.Withthedeclineinenergydemandoftheindustrysector,improvedelectrificationandchangesinthepowermix,industrialCO2emissionswillpeakbeforeindustrialenergydemand,between2020and2025.UndertheICCSD’s2°Cand1.5°Cscenarios,totalindustrialCO2emissionsfalltoapproximately1,670and710milliontonnes,respectively,by2050,ofwhich1,200Mtforthe2°Cscenarioand460Mtforthe1.5°Cscenarioarefromenergyactivities,and470and250milliontonnesfromindustrialprocessesfor2°Cand1.5°Cscenarios,respectively.Comparedto2020(5,090milliontCO2),totalindustrialCO2emissionsarereducedby86.1%in2050,ofwhich87.8%emissionreductionisfromenergyactivitiesand81%fromindustrialprocessesinthe1.5°Cpathway.By2050,theenergymixoftheindustrysectorwillbedecarbonised.TheICCSDprojectstheshareofnon-fossilenergyandelectricityatmorethan85%.Theshareofelectricityintheindustry’stotalfinalenergyusewillreach69.4%underthe1.5°Cscenario,upfrom25.7%in2020.Cleanenergymanufacturingastheeconomicbrightspotof2023Besidesemissionsreductions,theindustrialsectoralsoneedstodelivertheequipmentforthelow68carbontransition:everythingfromwindturbinesandrailenginestobatteriesandheatpumps.Progressonthisfronthasbeenrapidsincethecarbonneutralityannouncementin2020,andhasacceleratedfurtherin2022–2023,asaresultofanunprecedentedboomininvestment.Weestimatethat10%ofallfixedassetinvestmentin2023willgointocleanpowergeneration,energystorage,electricvehicles,railtransportationandelectricitytransmission.Thisinvestmentgrewapproximately40%onyearandcontributedallofthegrowthininvestmentyear-on-year:withoutit,fixedassetinvestmentwouldseezerogrowth.Themanufacturingofsolarpanels,EVsandbatteriesalonewillberesponsiblefor3%ofChina’sCO2emissionsin2023,withthecombinedemissionsfromthosesectorsincreasingbyanestimated60%year-on-year.Theseemissionswillbeoffsetmanytimesoverbyemissionsreductionsfromallthesolarpanels,wind,EVs,batteries,railwaysandsoononcethey'reinuseinChinaandtherestoftheworld,butthemanufacturingstillrepresentsanupfrontemissionscosttothetransition.4.5.1TrendscomparedtobenchmarksFigure28Annualchangeintotalenergyconsumptioninindustrycomparedtoenergytransitionpathways69Figure29AnnualchangeincoalconsumptioninindustrysectorcomparedtoenergytransitionpathwaysIndustrialenergyconsumptiongrowthwasmuchfasterthaninthetransitionpathwaysfrom2017–2021,withgrowthacceleratingfrom2018.Thisreflectstheenergy-intensivepatternofeconomicgrowthafterPresidentTrump’stariffsandtheonsetoftheCOVID-19pandemic.Thesectorinwhichemissionstrendsareinlinewiththetransitionpathwaysiscementandbuildingmaterials.TheNGFSDelayedTransitionpathwayhasemissionsfallingby4%peryearfrom2020to2030.Cementproduction,themainsourceofemissionsinthesector,fellat3%peryearfrom2017to2022,duetothedecliningvolumeofinfrastructureconstruction,whichreflectsprogresswiththeeconomictransition.Evenasindustrialenergyconsumptionhasincreasedatahighrate,directcoalconsumptionintheindustryhasbeenfallingquiterapidly,fasterthaninthetransitionpathways.Thishasbeenlargelydrivenbyairpollutionpoliciesthathaverequiredorencouragedthereplacementofdirectcoalusewithfossilgasandelectricity.Theuseofbothenergysourceshasincreasedrapidly.Accordingly,electrificationhasprogressedfasterintheindustrialsectorthanprojectedinthetransitionpathways.Afterfallingin2015–2021,coalconsumptioninindustryhasincreasedin2022–2023.Theoveralltrendisfromrapidreductionsduringtheindustrialslowdownandairpollutioncampaignsof2015–2017tofirstslowerreductionsandthenoutrightincreases.70Figure30AnnualincreaseintheelectrificationratioinindustrycomparedtoenergytransitionpathwaysFigure31Annualincreaseinelectricityconsumptioninindustrycomparedtoenergytransitionpathways71Figure32AnnualchangeincoalconsumptioninironandsteelcomparedtoenergytransitionpathwaysFigure33Annualchangeinelectricityconsumptioninironandsteelcomparedtoenergytransitionpathways72Figure34AnnualchangeintheelectrificationratioinironandsteelcomparedtoenergytransitionpathwaysFigure35Annualchangeintheelectrificationratioinchemicalscomparedtoenergytransitionpathways734.5.2Policiesinplace:PeakingcarbondioxideemissionsinindustryChina’splantopeakcarbondioxideemissionsinindustryisdividedintotwostages,correspondingtothetwofive-yearperiods,namelythe14thFYP(2021-2025)and15thFYP(2026-2030).MIITreleasedthe14thFive-YearPlanforIndustrialGreenDevelopmentinDecember2021,layingoutdetailedtargetsandactionplansby2025,withtheaimtoestablishafoundationforthegoalofcarbonpeakingbefore2030.Buildingonthat,MIITreleasedtheImplementationPlanforCarbonPeakingintheIndustrialSectorsinJuly2022.Thisservesasthetopguidanceforthevariousindustrialsectors’carbonpeakingworkthroughout2030,withsixkeytasksandtwokeyactions.Thesixkeytasksapplytoallindustrialsectors,andthetwokeyactionsaretargetedatproductionandgoodssupplyendforeachsector.MIITalsoledtheworktomakespecificpolicyandplanforeachtaskandaction,aswellastheintegrationwithexistingearlypolicies.DuetoitsdominantshareinChina’sCO2emissions,theindustrialsectorisheavilyregulatedbyanabundanceofpolicies,actionplans,andemissionstandards.Herewelistedselectedrelevantpoliciesbelow.Table8SelectedpoliciesrelatingtoindustryPolicynameReleaseTargetsandHighlightsdateImplementationPlanfor2022-08-01●By2025,energyintensityperunitofoutputgrowthofindustriesaboveCarbonPeakinginthedesignatedsizereduces13.5%comparedto2020.ThereductionofcarbonIndustrialSector,(MinistryintensityperunitofoutputgrowthofindustriesabovethedesignatedsizeisofIndustryandInformationmorethanthatofthewholesociety.SignificantreductionofthecarbonTechnologyandothers)intensityofkeyindustries.●Ensuretheemissionsfromtheindustrialsectorpeakbefore2030.ImplementationPlanfor2022-06-29●By2025,energyintensityperunitofoutputgrowthofindustriesaboveEnergyEfficiencydesignatedsizereduces13.5%comparedto2020.ImprovementintheIndustrialSector,(MinistryofIndustryandInformationTechnologyandothers)14thFive-YearPlanfor2021-12-03●By2025,thecarbonintensityoftheoutputgrowthofindustriesreducesbyIndustryGreen18%;theemissionintensityofmajorpollutantsinkeyindustriesreducesbyDevelopment,(Ministryof10%;energyintensityperunitofoutputgrowthofindustriesaboveIndustryandInformationdesignatedsizereduces13.5%comparedto2020;theshareofrecycledbulkTechnology)industrialsolidwastereaches57%;waterconsumptionperunitoftheoutputgrowthofindustriesdecreasedby16%.14thFive-Year2021-12-28●By2025,thenationalenergyconsumptionperunitofGDPwilldropbyComprehensiveWorkPlan13.5%comparedwith2020,thetotalenergyconsumptionwillbereasonablyforEnergyConservationcontrolled,andthetotalemissionsofchemicaloxygendemand,ammoniaandEmissionReduction,nitrogen,nitrogenoxides,andvolatileorganiccompoundswilldropby8%,(StateCouncil)8%,10%,and10%,respectively,comparedwith2020.●Atleast30％ofthemanufacturersinkeyindustrialsectorsanddatacentresshouldreachthebenchmarklevelforenergyefficiency.74PolicynameReleaseTargetsandHighlightsdate●By2025,thenationalenergyconsumptionperunitofGDPwilldropbyThe14thFive-YearPlanfor2021-7-713.5%comparedwith2020.CircularEconomyDevelopment,(National●Theutilisationofscrapsteelreached320milliontonnes,andtheoutputofDevelopmentandReformsecondarynon-ferrousmetalsreached20milliontonnes,ofwhichtheCommission)outputofsecondarycopper,secondaryaluminium,andthesecondaryleadreached4milliontonnes,11.5milliontonnes,and2.9milliontonnes,14thFive-YearPlanforRaw2021-12-29respectively.MaterialIndustryDevelopment,(Ministryof●By2025,theenergyconsumptionpertonneofsteelwillreduceby2%,IndustryandInformationenergyconsumptionperunitofcementproductswillreduceby3.7%,andTechnologyandothers)thecarbonemissionofelectrolyticaluminiumwillreduceby5%.MediumandLong-term2022-03-23●By2025,hydrogenproductionfromrenewableenergywillreachPlanfortheDevelopment100,000-200,000tonnes/yearandwillachieveacarbondioxideemissionofHydrogenEnergyreductionof1-2milliontonnes/year.Industry(2021-2035),(NationalDevelopmentand●By2030,arelativelycompletehydrogenenergyindustrytechnologyReformCommission)innovationsystem,cleanenergyhydrogenproduction,andsupplysystemwillbeformed.GuidingOpinionson2022-02-08PromotingtheHigh-quality●By2035,ahydrogenenergyindustrysystemwillbeformed,andadiversifiedDevelopmentoftheIronhydrogenenergyapplicationsystemcoveringtransportation,energyandSteelIndustry,storage,industry,andotherfieldswillbebuilt.(MinistryofIndustryandInformationTechnology●By2025,energyconsumptionpertonneofsteelwillbereducedbyatleastandothers)2%;recycleandreuseover0.3billiontonnesofsteelscrap;increasetheshareofEAF-basedsecondarysteelto15%.ImplementationPlanforCarbonPeakingand●Ensuretheemissionsfromtheironandsteelindustrypeaksbefore2030.Carbonneutralityinthe●Ensuretheemissionsfromtheironandsteelindustrypeakby2025.NA●Totalemissionswillreduceby30%comparedtothepeak.IronandSteelIndustry,●Furtherreduceemissionsby2035andachievedecarbonisationby2060.(ChinaIronandSteelAssociation)●Energyintensityperunitofcementproductwillreduceby3%comparedto2020by2025.ImplementationPlanfor2022-11-7CarbonPeakinginBuilding●Ensuretheemissionfromthebuildingmaterialsindustrypeaksbefore2030.MaterialsIndustry,(MinistryofIndustryand●By2025,energyconsumptionandcarbonemissionsperunitofproductwillInformationTechnologybesignificantlyreduced,andtotalvolatileorganiccompoundemissionswillandothers)bereducedbymorethan10%comparedwiththe“13thFive-YearPlan”period.GuidingOpinionson2022-04-07PromotingtheHigh-qualityDevelopmentofthePetrochemicalandChemicalIndustry,(MinistryofIndustryandInformationTechnologyandothers)75PolicynameReleaseTargetsandHighlightsdate●TheenergyconsumptionandcarbonemissionintensityperunitproductofImplementationPlanfor2022-11-15keyvarietieswillhavebeenfurtherreduced,andthesupplyofrecycledCarbonPeakinginmetalswillhavereachedmorethan24%.Non-ferrousMetalIndustry,●Ensuretheemissionfromthenon-ferrousmetalsindustrypeaksbefore(MinistryofIndustryand2030.InformationTechnology)●Ensuretheemissionsfromthecokeindustrypeakbefore2025.ImplementationPlanfor2022-08-03●By2035,ensureemissionsreduce30%comparedtothepeak.CarbonPeakingandCarbonneutralityinthe●By2025,theefficiencyofresourceutilisationwillbegreatlyimproved,andCokeIndustry,(ChinaCoketheenergyconsumptionperunitofoutputgrowthofindustries,carbonIndustryAssociation)emissions,andmajorpollutantemissionswillcontinuetodecline.GuidingOpinionson2022-06-19●Energyintensitydecreasesfrom350kgce/tto320kgce/tduringthe14PromotingtheHigh-qualityFive-YearPlanperiod(2021-2025).DevelopmentofLightIndustry,(Ministryof●Peakemissionsby2030.IndustryandInformationTechnologyandothers)●By2025,theproportionofrecycledfibreandbiomassfibreapplicationswillreach15%.The“14thFive-YearPlan”2021-12-24andtheMediumand●Duringthe“14thFive-YearPlan”period,theproportionofgreenfibreswillLong-termHigh-qualityincreasetomorethan25%,theoutputofbio-basedchemicalfibresandDevelopmentOutlineofthedegradablefibrematerialswillincreasebymorethan20%annually.PaperIndustry,(ChinaPaperAssociation)●Excluderenewableenergyconsumptioninthetotalenergyconsumptioncap,includingwindpower,solarpower,hydropower,biomasspowerGuidingOpinionsonthe2022-04-21generation,geothermalpowergenerationandotherrenewableenergyHigh-QualityDevelopmentsources.oftheTextileIndustry,(MinistryofIndustryand●Coal,petroleum,naturalgasandtheirproductsusedtoproduceolefins,InformationTechnologyaromatics,alkynes,alcohols,syntheticammoniaandotherproductsforandothers)non-energypurposesbelongtothecategoryofrawmaterialenergyconsumption.GuidingOpinionsonthe2022-04-21High-QualityDevelopmentoftheChemicalFibreIndustry,(MinistryofIndustryandInformationTechnologyandothers)Noticeontheexclusionof2022-11-16newrenewableenergyconsumptionfromtotalenergyconsumptioncontrol(NationalDevelopmentandReformCommission)Noticeontheexclusionof2022-11-01non-energyuseoffossilfuelsfromtotalenergyconsumptioncontrol(NationalDevelopmentandReformCommission)76PolicynameReleaseTargetsandHighlightsdate●IncludethecontrolofgreenhousegasesemissionsintheEIA.EncouragetheUpdatedGuidanceon2022-12-14developmentofEAFscrapsteelmaking,non-blastfurnaceironmaking,EnvironmentalImpactCCUS,greenhydrogenetc.AssessmentProjectsintheFourIndustries:●MEEstartedtorequestsevenenergy-intensiveindustrialsectors,includingSteel/Coking,ModernCoalpetrochemical,chemical,buildingmaterials,steel,nonferrousmetals,paperChemicals,Petrochemicals,andcivilaviationindustries,toreportandverifyemissionsinaregularbaseandThermalPower,annually.(MinistryofEcologyandEnvironment)●Ensureasteadygrowthofthepowerequipmentmanufacturing,aimingforanannual9%growthofthetotalrevenuebetween2023and2024.ActionPlanofMRV2023-10-18reportingforkeyindustrial●By2025,thedomesticprimarycrudeoilprocessingcapacitywillbesectors2023–2025(Ministrycontrolledwithin1billiontons,andthe10-million-tonrefiningcapacitywillofEcologyandaccountforabout55%ofthetotalcapacity..Environment)PlanforSteadyGrowthof2023-09-04PowerEquipmentManufacturing(2023-2024)(MinistryofIndustryandInformationTechnologyandothers)GuidingOpinionson2023-10-25PromotingGreenInnovationandHigh-qualityDevelopmentoftheRefiningIndustry(NationalDevelopmentandReformCommission)EIAand“dualcontrol”ofenergyforenergyandcarbonintensiveindustriesMEEupdatedenvironmentalimpactassessment(EIA)guidanceforfourenergyandcarbonintensiveindustries–steel/coking,coalchemicals,petrochemicals,andthermalpowerattheendof2022,withtheaimtocurbtheblindinvestmentinenergyandcarbonintensiveindustries.BesidesstrengtheningpollutioncontrolintheEIAprocess,thenewguidancerequiresgreenhousegasesemissionsassessmentfornewprojects,andpromoteslowcarbonprojectssuchassecondarysteelmakingusingelectricarcfurnaces,non-blastfurnaceironmaking,hydrogenmetallurgytechnology,CCUS,andgreenhydrogen.Theaggressiveinvestmentsinheavyindustrieshavebeenahindrancetomeetthegoalof“dualcontrol”ofenergyforthemajorityoftheprovinces.TheNationalEnergyPlanfor14thFYP(2021-2025)targetsa13.5%reductioninenergyintensity,withthenationaltargetbrokendowntoprovincialtargets.Meetingthistargetisprovingtobeverydifficult,aseconomicgrowthduringthezero-COVID-19periodhasbeendrivenlargelybythemoreenergyintensivesectorsoftheeconomy.AnassessmentreleasedbyNDRCinAugust2021showsthepoorperformanceoftheprovincesonmeetingtheirdualcontroltargets121.Tellingly,theNDRChasnotreleasedupdatedassessmentssince121NationalDevelopmentandReformCommission.Evaluationofthe“dualcontrol”ofenergyconsumptionbyprovinces.(Aug,2021)https://www.ndrc.gov.cn/xwdt/tzgg/202108/t20210817_1293836.html.Government77then,butnational-leveldataindicatesthatenergyintensityonlyfell3.1%from2020tothefirsthalfof2023,afarcryfromthe7%reductionneededtoputthecountryontracktomeetthetargetin2025.The“dualcontrol”ofenergyconsumptionhasputlimitsonthegrowthinenergyconsumptionforeachprovince,aswellasondevelopingnewprojectswithhighenergyintensity.Despitetheeffortofexploringlow-carbondevelopmentmodels,ithasbeendifficultforprovincialgovernmentstomoveawayfromtheoldenergyintensiveeconomicmodel.Withtheeconomypickingupfollowingtheremovalofzero-COVID-19policies,2023hasseenyear-on-yeargrowthininvestmentandoutputintheenergy-andcarbon-intensivechemical,steel,powerandfossilfuel-processingsectors122.MRVreportingforindustrialsectorsChina’snationalemissionstradingsystem(ETS)cameintooperationin2021123.Initiallycoveringthepowersector,whichaccountsforover40%ofChina’senergy-relatedCO2emissions,theETSissettosubsequentlybeexpandedtootherenergy-intensiveindustrialsectors.Theannualprocedureformonitoring,reportingandverifying(MRV),togetherwithalltheassociatedprocesses,isknownastheETScompliancecycle.Inadditiontothepowersector,MEEstartedtorequestsevenenergy-intensiveindustrialsectors,includingpetrochemical,chemical,buildingmaterials,steel,nonferrousmetals,paperandcivilaviationindustries,toreportandverifyemissionsin2022.AmoredetailedActionPlanofMRVreportingforkeyindustrialsectors2023–2025wasreleasedinOctober2023.ItisseenasanimportantsteptosteadilyexpandETSby2025,embracingotheremissions-intensiveindustries–cement,steel,andaluminium.PeakindustrialcarbonemissionsSteel,buildingmaterials(cementandglass)andnon-ferrousmetals(aluminium)areamongthetopindustrialcarbonemittersinChina.MIIThasmadeactionplansforeachofthemwiththegoaltopeaktheiremissionbefore2030.Newtechnologies,suchashydrogen,andrenewableenergyinthesesectorswillplayanimportantroleindecarbonisation.TheMediumandLong-termPlanfortheDevelopmentofHydrogenEnergyIndustry(2021-2035)hassetthree-stagetargets:1)By2025,hydrogenproductionfromrenewableenergywillreach100,000-200,000tonnes/yearandwillachieveacarbondioxideemissionreductionof1-2milliontonnes/year.2)By2030,arelativelycompletehydrogenenergyindustrytechnologyinnovationsystem,cleanenergyhydrogenproduction,andsupplysystemwillbeformed.3)By2035,ahydrogenbasedindustrysystemwillbeformed,andadiversifiedhydrogenapplicationsystemcoveringtransportation,energystorage,industry,andotherfieldswillbebuilt.Moreover,recyclingwillreduceemissionsfromproductionofprimarymaterials.The14thFive-YearPlanforCircularEconomyDevelopmentsetgoalsforrecyclingimportantindustrialmaterialsby2025.Theutilisationofscrapsteelshouldreach320milliontonnes,andtheoutputofsecondarynon-ferrousdocument.122ChinaDialogue.Analysis:Carbon-intensiveindustriesareworseningChina’sozonepollution.(Sep,2023)https://chinadialogue.net/en/pollution/carbon-intensive-industries-worsen-chinas-ozone-pollution/.Analyticarticle.123People’sDaily.NationalEmissionTradeSchemelaunched,startingfromthepowersector.(July2021).https://www.gov.cn/zhengce/2021-07/16/content_5625373.htm.Newsreport.78metalsshouldreach20milliontonnes,ofwhichtheoutputofsecondarycopper,secondaryaluminium,andthesecondaryleadshouldreach4milliontonnes,11.5milliontonnes,and2.9milliontonesrespectively.Specificallyforthesteelindustry—thebiggestindustrialemitter,itscarbonpeakingplansetsatargettoincreasetheshareofEAF-basedsecondarysteelto15%by2025,from10%in2020.Itsupstreamsector,thecokingindustry,aimstopeakitsCO2emissionsby2025,ascrudesteelproductionisexpectedtopeakbythen.Clean-techmanufacturingChineseindustrialandinnovationpoliciesfocusedonindustrieswithhigh-techandhigh-value,whicharenamedasemergingindustriesofstrategicimportance,andincluderenewableenergy,newenergyautomobiles,energyconservation,environmentalprotectionandothernineindustriesintotal.Theexpandingsolarpanelandwindturbineproductionandmarketsinthepastdecadehavehelpedsolarandwindpowerbecomethemostaffordableelectricitygenerationtechnologyinmanypartsoftheworld.Between2010and2022,theglobalweighted-averagelevelizedcostofelectricity(LCOE)ofnewlycommissionedutility-scalesolarPVprojectsdeclined89%.Foronshorewindprojects,theglobalweighted-averagecostofelectricityfellby69%inthesameperiod124.Thepolysilicon,solar,batteryandEVindustriesarerapidlyexpandingproductioncapacityin2023.Itisestimatedthatbytheendof2023,China'smanufacturingcapacityofsolarPVwillbecloseto1000GW,doublingfromtheendof2022125.Reportedly,inthefirsthalfof2023,therewere42energystorageprojectsworthover10billionyuaneach,ofwhich28projectshavealreadybeencontracted126.Amideconomicchallengesandadecliningrealestatesector,renewableenergyisregardedasapromisingindustrywithcleargrowthprospectsunderthe“dualcarbon”goal.TheMIITissuedthePlanforSteadyGrowthofPowerEquipmentManufacturing(2023-2024)inSeptember2023.Theannouncementofthe2060carbonneutralitytargetprovidedthepoliticalsignal,butthereasonthemagnitudeofthegrowthhasexceededpolicymakers’targetsandexpectationsismacroeconomic.Environmentalgoalsmadecleantechoneoftheonlyacceptablesectorsforinvestmentforlocalgovernmentsatatimewhentheirinvestmentspendingwasunderscrutinyduetodebtconcerns,incomewasunderpressureduetothecontractionintherealestatesector,andtheywereeagertoattractinvestmentandeconomicactivity.Asapartofthemeasurestostimulatetheeconomyduringthepandemic,thegovernmentmadeiteasierforprivatesectorcompaniestoraisemoneyonthefinancialmarketsandfrombanks127.Thecleanenergysector,incontrastwiththefossilfuelandtraditionalheavyindustries,islargelymadeup124IRENA.(2023).RenewablePowerGenerationCostsin2022.https://www.irena.org/Publications/2023/Aug/Renewable-Power-Generation-Costs-in-2022.Report.125Caixin.(Sep2023).China’sSolarProfitsSurgeasOversupplyLooms.https://database.caixin.com/2023-09-02/102099625.html.Newsreport.126EnergyMagazine.(July2023).Half-YearReviewofEnergyStorageIndustry'sInvestmentProjectsExceeding10BillionYuan.https://www.inengyuan.com/kuaixun/11232.html.Newsreport.127StateCouncilofChina.(2023).OpinionsoftheCCCPCandtheStateCouncilonPromotingtheDevelopmentandGrowthofthePrivateEconomy.https://www.gov.cn/zhengce/202307/content_6893055.htm.Governmentdocument.79ofprivatecompanies.Accesstocredithadearlierbeenamajorbottleneckfortheminafinancialsystemthathasheavilyfavouredstate-ownedfirms.Datashowthatinthefirsthalfof2023,60solarPVcompaniesraisedover200billionyuanintotalfromthecapitalmarket,doublesizeofthesectoralyearlyfinancingof2022128.Thehungeroflocalgovernmentsforinvestmentsresultedinsizablesubsidies.Reportedly,it’scommonforlocalgovernmentstocover30%ofthecapitalcoststhroughlowpriceland,taxreductionandvarioussubsidies129,evenincludingbuildingtheentirefactorypremises.Localgovernmentsalsosettheconstructionoflocalmanufacturingcapacityasapreconditionforlucrativepowergenerationprojects.Itisclearthatthewaveofmanufacturinginvestmenthasresultedinsignificantovercapacity,eventhoughhowmuchdependsonthepaceoftheglobalenergytransition.Provincialgovernmentshavesetambitiousgoalsforrenewablemanufacturingby2025.Zhejiangontheeastcoastistargetingamanufacturingcapacityof150GWsolarPV,5GWwindpowerand100GWhenergystorage.ZhejiangisthesecondlargestsolarPVmanufacturerinChina,withatotalmanufacturingcapacityof40GWin2020,afterJiangsu.Shanxiprovince,inthenorthofChinaandaleadingcoalproducer,alsoapprovedamegasolarPVmanufacturingprojectdevelopedbyJinkoSolar,andprovidedabout20-30billionyuanininvestmentthroughgovernmentbackedinvestmentfunds.4.5.3Focus:IronandsteelChinacurrentlyproducesinexcessof1billiontonsofcrudesteelannually,accountingformorethanhalfoftheworld’ssteelproduction.Thedominanceofcoal-based130blastfurnace–basicoxygenfurnace(BF–BOF)methodintheChinesesteelsector,alongwithitslargescale,presentssignificantchallengesfordecarbonisation.Thesectoristhesecond-largestemitterofCO2inChinaafterelectricityproduction,andthelargestwhenemissionsfromelectricityconsumedbythesectorareincluded.TherapidgrowthofsteelproductionhasbeenakeydriverofChina’semissionsgrowth,makingpeakinganddecliningemissionsfromthesectoranessentialpartofmeetingChina’semissionsgoals.AnotherchallengeforChina’ssteelsectoristhatithasbeentrappedinovercapacityforyears.Thecentralgovernmentsetthetargettoreducesteelmakingcapacitybelow1billiontonnesby2020,anetreductionof150milliontonnessteelmakingcapacityfrom1.13billiontonnesin2015131.However,China’scrudesteelproductionclimbedtoarecordhighof1,065milliontonnesin2020132,thehighestoutputonrecord.Whileofficialnumbersforsteelmakingcapacityin2020wereneverpublished,presumablyduetothefactthattheywouldhaveshownthetargetbeingmissed,thereportedsteelproductionandplantutilisationindicatethattheremusthavebeenmorethan1.2billiontonnesofcapacityinplacein2020,implyingthatthecapacitycontroltargetwasmissedbywellover200million128ChinaEnergyNews.(Oct2023).Photovoltaic"financingheat"inflectionpointhascome.http://paper.people.com.cn/zgnyb/html/2023-10/16/content_26022909.htm.Newsreport.129Caixin.(Sep2023).China’sSolarProfitsSurgeasOversupplyLooms.https://database.caixin.com/2023-09-02/102099625.html.Newsreport.130Coalisusedasareductanttostripoxygenfromtheironoreandthisprocessgeneratessubstantialcarbonemissions.131NationalDevelopmentandReformCommission.IronandSteelIndustryAdjustmentandUpgradingPlan(2016-2020).(July2017).https://www.ndrc.gov.cn/fggz/fzzlgh/gjjzxgh/201706/t20170621_1196816.html.Policy.132NationalBureauofStatistics.(2022).https://data.stats.gov.cn/easyquery.htm?cn=C01.Statistics.80tonnes133.Basedonthefailureoftacklingtheovercapacityissue,andfollowingtheannouncementofChina’sdualcarbongoalsinSeptember2020,thecentralgovernmentsteppedupeffortstocutsteeloutputtoreducepollutantandgreenhousegasemissionsinthesteelsectorin2021and2022134,135.China'scrudesteelproductionfellby2.8%and1.7%year-on-yearin2021and2022,respectively136.In2023,thecentralgovernmenthasn’tannouncedanoutputcontroltargetpublicly,butitiswidelydiscussedthatthegovernmentmightsetagoaltokeepitbelowthe2022level137.Crudesteeloutputincreased2.6%year–on-yearinJanuary–August2023138.Ifthegovernmentaimstolimitfull-yearcrudesteeloutputbelow2022level,itwillrequirea6%reductioninSeptember–December2023139.Outputreductionmightbeaneffectivewaytopeakcarbonemissionsintheshort-term,whiledeepdecarbonisationinthelongtermwillrequirethedeploymentoflowcarbontechnologies,energyefficiencyimprovements,andrecyclingofresources.Incontrasttothesteelproductionstayingathighlevelsinthepastthreeyears,theprofitabilityofthesectorhasplummetedafterthepeakin2021,withtotalprofitsfallingby91.3%in2022year-on-year140,andafurther57.1%inJanuary–August2023141.Theprofitabilitydeclineonceagainrevealstheexcesscapacityinthesteelsector,andtheweakgrowthofdownstreamdemand,withtheongoingdeflationoftherealestatesectorthemainburdenonsteelprices142.GiventhemassivescaleofChina’ssteelconsumptionoverthepast20years,thereisahugepotentialpoolofdomesticscrapsteelfromdemolishedbuildingsandinfrastructure,aswellasfromscrappedcarsandmachinery,thatcanberecycledaspartofamovetowardsthecirculareconomy.Thisconstitutesamajoropportunityforthesectortoshifttoelectricsteelmaking,reducingtheuseofcoal-basedblastfurnacesandcuttingemissions.Thesteelindustrytargetsanincreaseintheuseof133LauriMyllyvirta.CarbonBrief.Analysis:SurgeinChina’ssteelproductionhelpstofuelrecord-highCO2emissions.(March2020).https://www.carbonbrief.org/analysis-surge-in-chinas-steel-production-helps-to-fuel-record-high-co2-emissions/.Article.134NationalDevelopmentandReformCommissionandothers.(2021).WorkPlantoTackleSteelIndustryOvercapacity.https://www.miit.gov.cn/jgsj/ycls/gt/art/2021/art_6618ea3ec1634d29a158e6b0c1c74374.html.Policy.135NationalDevelopmentandReformCommission.Planonsteeloutputreduction.(April2022).https://www.ndrc.gov.cn/xwdt/xwfb/202204/t20220419_1322416.html.News.136NationalBureauofStatistics.(2022).https://data.stats.gov.cn/easyquery.htm?cn=C01.Statistics.137XinhuaFinance.TheuncertaintyofChina’ssteeloutputcontrolgoal.(Aug2023).https://www.cnfin.com/yw-lb/detail/20230821/3917937_1.html.Newsreport.138NationalBureauofStatistics.(2023).Statistics.https://data.stats.gov.cn/easyquery.htm?cn=A01139LauriMyllyvirta,CentreforResearchonEnergyandCleanAir.(Sep2023).https://energyandcleanair.org/china-energy-and-emissions-trends-september-2023-snapshot/.Analysis.140NationalBureauofStatistics.(2022).http://www.stats.gov.cn/xxgk/sjfb/zxfb2020/202301/t20230131_1892601.html.Statistics.141NationalBureauofStatistics.(2023).http://www.stats.gov.cn/sj/zxfb/202309/t20230927_1943230.html.Statistics.142BloombergNews.(2023).China’sPropertyWoestoWeighonSteelPricesThroughNextYear.https://www.bloomberg.com/news/articles/2023-08-30/china-s-property-woes-to-weigh-on-steel-prices-through-next-year.News.81scrapsteeltomorethan300milliontonnesperyearby2025143,upfrom233millionin2020144,andanincreaseintheshareofelectricarcfurnace-basedsteel(EAF-steel)fromthecurrent10%to15%ofsteelproductionby2025.Thehugepotentialscrapresourceandpolicytargetshavenot,however,translatedintoaboomofEAF-steelproduction.TheshareofEAF-steelintotalcrudesteelproductionwas9.7%in2022,lowerthanthatofthepastfouryears(Figure36).ThecosttoproducesteelusingscrapthroughEAFishigherthanthatofusingironorethroughtheBF-BOFprocessinthecurrentChinesemarket,andthereisalsostillalackofincentivesforlowcarbonsteelproducts.ThelackofeconomiccompetitivenessofEAF-steeloverBOFsteelwillrequiremorepolicysupportandagrowingmarketforlowcarbonproductstopavethewayforthegrowthofEAFcapacityandproduction,andtomeetthe15%goalby2025.Figure36China’ssteelproductionshareandEAF-steeloutputtargetby2025Source:CREAanalysis,ChinaIronandSteelIndustryYearbook2022.Note:BOFisbasicoxygenfurnace,EAFiselectricarcfurnace,eisestimation.2025steelproductionisestimatedbyanannualreductionof1%basedon2022data.Ifthegovernmentcontinuesthesteeloutputcontrolthroughoutthefollowingyears,CO2emissionsfromthesteelsectorwillnotonlypeakbutfallsubstantiallyby2030,astheincreasedsupplyofscrap143MinistryofIndustryandInformationTechnologyandothers.GuidingOpinionsonPromotingtheHigh-qualityDevelopmentoftheIronandSteelIndustry.(2022).http://www.gov.cn/zhengce/zhengceku/2022-02/08/content_5672513.htm.Policy.144ChinaScrapSteelApplicationAssociation.(2021).“14thFive-Year”DevelopmentPlanforSteelScrapIndustry.http://www.csteelnews.com/xwzx/jrrd/202109/t20210917_55000.html.Document.82allowspigirontobereplacedwithscrapasaninput.ThismakesitrelativelyeasyforChinatopeaktheCO2emissionsofthesteelsectorby2030.Whatisessentialnowistoguidetheinvestmentinlowcarbonproductionfacilitiestorealisethecarbonneutralitygoalby2060.Newironandsteelmakingprojectsshouldfollowthecapacityreplacementpolicy,whichrequiresalargerquantityofexistingcapacitytoberetiredforallnewcapacitythatisadded.MIIThasusedthismeasuresince2014toalleviatetheovercapacityofsteel,aluminium,cementandglassinChina.NewironandsteelmakingcapacityBasedonavailabledatafrom2017tothefirsthalfof2023(2023H1),CREAhasmappedthetrendsinthedevelopmentofnewironandsteelmakingprojects145.Specifically,thedatashowthat:●Chinesesteelfirmsaremakingsignificantinvestmentsinnew,coal-basedsteelmakingcapacity.Companiesreceivedapprovalsfromprovincialgovernmentsfor384.3milliontonnesperannum(Mtpa)ofnewironmakingcapacity,and425.9Mtpanewsteelmakingcapacityfrom2017untilthefirsthalfof2023.Onaverage,approximately30Mtpasteelmakingcapacitywasapprovedeverysixmonths,whichisalmostequaltothetotalsteelcapacityofGermany.●NewironandsteelcapacityiscontinuouslydominatedbytheBF–BOFroute.BFaccountsfor99%ofthenewironmakingcapacityandBOFaccountsfor70%ofthenewsteelmakingcapacityapprovedin2017–2023H1.Thatistosay,atleastone-quarterofChina'sexistingsteelmakingcapacityisbeingreplacedwithnewunits,furtherlockingincarbonintensiveproductionduringitslifespan.●Inspiteofthe‘dualcarbon’pledgeannouncedin2020,during2021–2023H1therewasatotal119.8MtpaBFand76.6MtpaBOFapproved.Tomeetthe2060carbonneutralitygoalrequiresearlyretirementofcarbon-intensivesteelmakingfacilities.Therefore,thenewBF–BOFcapacityapprovedafter2020alonewouldresultinnearlyUSD100billion(CNY700billion)instrandedassets.●Therehasbeensomepromisingprogressonshiftinginvestmentsintofacilitiesthatarelesscarbon-intensive.NewproposedEAFprojectssignificantlyincreasedin2021–2023H1,withatotalcapacityof52.5Mtpaapproved.EAFsteelmakingispromotedunderthelatestcapacityreplacementpolicy.TheshareofEAFinnewlyannouncedsteelmakingcapacitygrewto30–40%duringtheperiod.Severalnon-BFprojectswithatotalcapacityof4.7Mtpa,applyingincrementaltechnologyorzero-emissiontechnologyintheironmakingprocess,alsoreceivedapprovals.●By2025,nearlyallnewpermittedironandsteelprojectswillcommenceoperations.Throughthesereplacements,approximately40%ofChina’sironandsteelmakingcapacitywillberenewed.145CentreforResearchonEnergyandCleanAir.China’ssteelsectorinvestsUSD100billionincoal-basedsteelplants,despitelowprofitability,overcapacityandcarboncommitments.(2023).https://energyandcleanair.org/publication/chinas-steel-sector-invests-usd-100-bn-in-coal-based-steel-plants-despite-low-profitability-overcapacity-and-carbon-commitments/.Report.83Figure37Newlyproposedironandsteelmakingcapacityannouncedthroughcapacityreplacementonahalf-yearlybasis,2017–2023H1Source:CREAanalysis,provincialgovernmentwebsites.Note:BFisblastfurnace,Non-BFisnon-blastfurnace(hereincludeshydrogen-baseddirectreductionplant,HydrogenplasmasmeltingreductionplantandHIsmeltplant),BOFisbasicoxygenfurnace,EAFiselectricarcfurnace,AODisargonoxygendecarburizationfurnace.Figure38NewironandsteelmakingcapacityadditionsbytheirestimatedcommisionyearSource:CREAanalysis,provincialgovernmentwebsites.Dataincludeannouncementsmadeduring2017-2023Jan-June.Note:BFisblastfurnace,Non-BFisnon-blastfurnace(hereincludesCOREX,hydrogen-baseddirectreductionplant,HydrogenplasmasmeltingreductionplantandHIsmeltplant),BOFisbasicoxygenfurnace,EAFiselectricarcfurnace,AODisargonoxygendecarburizationfurnace.4.5.4DatadisclosureDataonindustrialproduction,includingthemostimportantemittingsectors,ispublishedmonthly,whichprovidesanindicationofthedevelopmentofemissions.However,dataonindustrialenergyconsumptionisonlypublishedonanannualbasisandwithadelayof1–2years.OfficialinformationonCO2emissionsfromindustryhasonlybeenpublishedtwice,withthelatestdatacoveringtheyear2014.844.6Buildings2023Highlights●Emission:Energyconsumptioninbuildingsincreasedfasterwithmostgrowthinelectricityconsumptionin2022–2023,duetoheatwavesandincreasedprevalenceofairconditioning.Itthenresultedinincreasedcoaluseinthepowersectorascleanpowergenerationadditionswereinsufficienttomeetincreaseddemand.●Sectoraldevelopment:Thepotentialforeconomicallyprofitableenergyefficiencymeasuresinbuildingsisverylarge,buttherearealsomajorbarrierstorealisingit.AstheconstructionofnewbuildingsslowsdowninChina,theenergyefficiencyofexistingbuildingscouldbeanimportantfocusarea.●Policymaking:ReplacingresidentialcoalstovesinnorthChinacontinuestobeoneofthepolicy-drivenfocusesforbothairpollutioncontrolandcarbonreduction,aswellasenergyefficiencyretrofitsofexistingbuildings,andpromotingrenewableenergy.Electricityuseinbuildingsincreasedsharplyin2022–2023incomparisontopreviousyearsduetoheatwavesandincreasedprevalenceofairconditioning.Thisdroveincreasesinemissionsfrompowergenerationandemphasisedthesignificanceofbuildingenergyefficiency.Thebuildingsector(residentialandcommercial)wasresponsiblefor16%ofChina’sCO2emissionsfromtheenergysectorin2021,throughtheuseofcoal,fossilgas,andelectricity.Thisisasmallersharethaninmostothercountries,explainedbythedominanceofindustryasanenergyconsumerinChina,butstillsignificantandrisingrapidly.Theuseofcoalstovesforresidentialheatingisalsoamajorsourceofairpollutants,despiterapidprogressineliminatingsmall-scalecoaluse.Energyefficiencyplaysamajorroleinreducingemissionsfromthebuildingsector.UndertheICCSD’s1.5°Cscenario,by2050,theenergyconsumptionofthebuildingsectorfallsto620Mtce,from775Mtcein2020.Theshareofelectricityinthesector’stotalfinalenergyconsumptionrisesto78%,from48%in2020146,andtheuseofbiomassincreasestoaround90Mtce,from67Mtcein2020.Ahighlevelofelectrificationmeansthatnaturalgasconsumptionfallsaswell.Directcarbonemissionsfromthebuildingsectorfellby18%from2015to2020,becausefueluseinbuildingswasreplacedbydistrictheatingandelectricity.Directemissionsincreasedby5%in2021duetoanincreaseintheuseofgas,whiletheuseofcoalcontinuedtofall.Whenincludingtheemissionsfromtheconsumptionofelectricityandheat,emissionsassociatedwithbuildingshaveincreasedrapidly.Electricityconsumptioninbuildingsgrewmorethan50%from2018to2023.Increasesintheuseofairconditioning,promptedinpartbyrecentextremeheatwaves,isanimportantcontributor.Inthetransitionpathways,thetotalemissionsofthesector,includingtheemissionsfromtheproductionofelectricityandheatusedinbuildings,begintofallsharplyfrom2030to2045andreach146ShenzhenInstituteofBuildingResearch.(2021).Buildingelectrificationanditsdrivingpathforurbanenergytransition.https://www.efchina.org/Reports-zh/report-lccp-20210207-2-zh.Researchreport.8580MtCO2in2050.TheICCSD’s1.5°Cpathwayalsoseesasubstantialslowdowninconstructionvolumes,withthenetgrowthofthetotalbuildingstockcomingtoahaltby2025.DuetothefactthatChinahasnotyetbannedtheuseofhydrofluorocarbons(HFCs),airconditioningunitsforbuildingsareamajorsourceoffluorinatedgasesthatwillneedtobecontrolledasapartofChina’spolicymakingonnon-CO2greenhousegases147.4.6.1TrendscomparedtobenchmarksChina’sambitiousairpollutionpolicies,targetingsmall-scalecoaluseinbuildingsasoneofthekeysourcesofairpollution,haveledtoarapidreductionincoaluse,inlinewiththetransitionpathways.However,totalenergyconsumptioninbuildingsincreasedby5%peryearfrom2015to2020,whilethetransitionpathwayshaveprojectedfallingtotalenergyconsumptionfrom2020to2030.Asaresult,theuseoffossilgasandelectricityincreasedfasterthaninthetransitionpathways.Thepotentialforeconomicallyprofitableenergyefficiencymeasuresinbuildingsisverylarge,buttherearealsomajorbarriers.AstheconstructionofnewbuildingsslowsdowninChina,theenergyefficiencyofexistingbuildingscouldbeanimportantfocusarea.Figure39Annualchangeincoalconsumptioninbuildingscomparedtoenergytransitionpathways147MinistryofEcologyandEnvironmentandothers.(2021).NoticeonStrictlyControllingtheFirstBatchofHFCChemicalProductionandConstructionProjects.https://www.mee.gov.cn/xxgk2018/xxgk/xxgk05/202112/t20211229_965542.html.Policy.86Figure40AnnualchangeingasconsumptioninbuildingscomparedtoenergytransitionpathwaysFigure41Annualincreaseintheelectrificationratioinbuildingscomparedtoenergytransitionpathways87IntheIEASustainableDevelopmentScenario,coaluseinbuildingsfallsby75%from2020to2030.Thisisamorerapidreductionthanthe36%reductionachievedfrom2015to2020.Yetgasandelectricityconsumptioninbuildingshasgrownmuchfasterthaninthetransitionpathways,indicatingthatprogressonbuildingenergyefficiencyislaggingbehindthepathways.Electricityconsumptionisgrowingfasterthaninthetransitionpathways,butit’snotreplacingcoalandgas.4.6.2Policiesinplace:PeakingcarbondioxideemissionsintheresidentialsectorThebuildingsectoriscoveredinChina’sCO2peakingactionplanunder“urbanandruraldevelopment”.Besidestheimplementationofearlierpolicies,highlightsforthelatestpoliciesareinthereductionofbulkcoaluseandpromotingrenewableenergyinruralareas.ResidentialcoalheatingReplacingresidentialcoalstovesinnorthChinabecameoneofthepolicy-drivenfocusesforbothairpollutioncontrolandcarbonreductionin2017.AccordingtoresearchbytheEnergyResearchInstituteofPekingUniversity,36.3millionhouseholdsswitchedfromcoaltoelectricityorgas-basedheatingduring2017–2022,reducingresidentialconsumptionofcoalby38%148.Theresearchalsoestimatedthatanother21millionhouseholdswillswitchfromcoaltoelectricityorgas-basedheatingin2022–2025,cuttingresidentialcoalconsumptionby60%comparedto2017.Thetypeofcoaltraditionallyusedinhouseholdstovesissanmei(散煤),meaning“loosecoal”.Thetargetsandpoliciesaimingtoreduceresidentialcoalusehavetargetedthiscoalspecifically.Recently,cleaner-burningcoalvarietieshavebeenusedtoreplaceloosecoal,insteadofeliminatingcoaluse,duetothehighcostofgasandconcernsaboutenergysecurity.ThisentailsnoreductioninCO2andmuchsmallerreductionsinairpollutantemissionsthanshiftingfromcoaltoelectricity,orevengas.IntheActionPlanforComprehensiveAirPollutionControlintheAutumnandWinterof2023-2024intheBeijing-Tianjin-HebeiandSurroundingAreasandFenweiPlain(DraftforComments)149,MEEtargets787,000householdstophaseoutloosecoaluseinthecomingwinter.Financialsupportfromcentralgovernmentisthekeydriverinthislargescaleloosecoalphase-out.Market-basedinstrumentsareessentialforthecontinuityofthiswork.Withthereductionofgovernmentsubsidiesandthecompromisedwaytoreplaceloosecoalwithcleaner-burningcoalvarieties,itisnotclearhowmanywillactuallybeshiftedfromcoal.GreenbuildingandbuildingenergyefficiencyChinaiscurrentlyworkingbothtoraiseenergyconsumptionstandardsfornewbuildingsandtoretrofitexistingbuildingsforenergyefficiency.The14thFive-YearPlanforBuildingEnergyEfficiencyandGreenBuildingDevelopmenthasintroducednon-bindingtargetsforthebuildingsectorby2025:1)Capthetotalenergyconsumptionofbuildings,148ChinaDispersedCoalManagementReport2023.PekingUniversity.(Sep2023).https://www.ccetp.cn/newsinfo/6390799.html.Researchreport.149MinistryofEcologyandEnvironment.(Sep2023).ActionPlanforComprehensiveAirPollutionControlintheAutumnandWinterof2023-2024intheBeijing-Tianjin-HebeiandSurroundingAreasandFenweiPlain(DraftforComments).https://www.mee.gov.cn/xxgk2018/xxgk/xxgk06/202309/t20230922_1041574.html.Policy.88includingupstreamenergyuse,at1.15Gtce;2)Increasetheenergyefficiencyofnewly-builturbanprivateresidentialbuildingsby30%;3)Increasetheenergyefficiencyofurbanpublicresidentialbuildingsby20%;4)Completeenergyefficiencyretrofitson350millionsquaremetresofexistingbuildings,including100millionsquaremetresofprivateexistingbuildings,and250millionsquaremetresofpublicexistingbuildings.Thisisonlyhalfoftheretrofittedareaduringthe13thFYPperiod(2016–2020),showingthatthiseffortisbeingdownscaled.RenewableenergyinurbanandruralbuildingsGiventhatincreasingtheshareofrenewableenergysuppliedtobuildingsrequirestransformingChina’soverallenergysystem,andthenegotiationsfortherenewableenergyinstallationsinresidentialbuildingsinvolvemultiplestakeholders,amorepracticalpathwayforbuildingsinurbanareasistobringdownenergyconsumptionwithinbuildings.Theabovementioned“GreenBuildingPlan”targetsashareof8%forrenewableenergyconsumptioninthetotalenergyconsumptionforurbanbuildingsby2025,justtwopercentagepointshigherthanthe6%targetfortheendofthe13thFYPperiod(2016-2020).However,inpractice,thewhole-countysolarprogrammehasresultedingreatlyacceleratedprogress.Meanwhile,theNEAcalledforapplicationsfor“energytransitionpilotcounties”inMarch2023150,withtheaimtopromoterenewableenergyinruralareas.Theseenergytransitionpilotcountiesarerequiredtomeettwogoals:1)increasetheshareofrenewableenergyto30%intheirtotalprimaryenergyconsumption;2)covering60%intheirprimaryenergyconsumptiongrowthwithrenewableenergy.Table9Selectedpoliciesrelatingtothebuildingssector.PolicynameReleasedateTargetsandHighlightsImplementationplanforcarbon2022-07-13●By2025,newurbanbuildingswillfullyimplementgreenbuildingpeakinginurbanandruralstandards.construction,(MinistryofHousingandUrban-RuralDevelopment●Ensuretheemissionsfromurbanandruralconstructionpeakandothers)before2030.Before2030,thenewresidentialbuildingsinseverecoldandcoldareasshouldmeetthe83%ofenergy-savingrequirements;thenewresidentialbuildingsintheareaswithhotsummersandcoldwinters,hotsummersandwarmwinters,andmildareasshouldmeet75%oftheenergy-savingrequirements;andnewpublicbuildingsshouldmeet78%oftheenergy-savingrequirements.By2030,theutilisationrateofurbanresidentialwastewillreach65%.14thFive-YearPlanforBuilding2022-03-12●Setacoalconsumptioncap,1.15billiontonnesofstandardcoal,EnergyEfficiencyandGreenforbuildingmaintenanceby2025;BuildingDevelopment,(MinistryofHousingandUrban-Rural●IncreasetheenergyefficiencyofnewlybuiltprivatebuildingsbyDevelopment)30%by2025;●Increasetheenergyefficiencyofnewlybuiltpublicbuildingsby20%by2025.The14thFive-YearPlanto2022-02-11●PromotecarbonemissionreductionandcarbonsequestrationinPromotetheModernizationofagricultureandruralareas.AgricultureandRuralAreas,(StateCouncil)150NationalEnergyAdministration.(March2023).Noticeonorganisingtheconstructionofpilotcountiesforruralenergytransition.https://www.gov.cn/zhengce/zhengceku/2023-03/24/content_5748120.htm.Governmentdocument.894.6.3DatadisclosureDataenergyconsumptionintheresidentialandcommercialsectorisonlypublishedonanannualbasisandwithadelayof1–2years.OfficialinformationonCO2emissionsfromthesectorhasneverbeenpublished,withChina’sofficialgreenhousegasemissioninventoriessubmittedtotheUN,whereresidentialemissionsaredelegatedtothe“Other”category.4.7Transport2023Highlights●Emission:China’soilconsumptionwasalmoststablefrom2019to2022,largelyduetothereductioninmobilitycausedbyCOVID-19controlmeasures.Theremovalofpandemiccontrolmeasuresresultedinasignificantreboundin2023.Forroadvehicles,electrificationrepresentsthemainthrustofemissionreductions.Theshareofelectricityintransportenergyuserosefrom3.4%in2018to4.7%in2023.●Sectoraldevelopment:Electricvehicleproductionandsaleshavebeenskyrocketing,withtheshareofEVsoutofallvehiclesproducedincreasingfrom5%in2019to30%inthe12monthsuptoAugust2023.Thedecarbonisationandelectrificationoftransportaresupportedbyahighlydevelopednetworkofhigh-speedrailconnectionsbetweencities,aswellasurbanrailandbustransport.●Policymaking:Despitetheendofthenationalpurchasesubsidiesfornewenergyvehiclesattheendof2022,theyhavebeenreplacedbysubsidiesfromprovincialgovernments.Additionally,theMinistryofFinanceextendedthevehiclepurchasetaxreductionfornewenergyvehiclesfrom2024to2027.IfChina’seconomicdevelopmentandurbanisationcontinueatafastpace,thedemandforpassengerandfreighttransportationisexpectedtorisesharplyuntilaround2040.LimitingtheincreaseinCO2emissionswillrequirefurtherdevelopmentofsustainabletransportmodesandoptionsandincreasingtheirshareoftotaltransportvolumes;acceleratedelectrification;aswellastheuseofsyntheticfuelsand/orbiofuelsinaviation.InboththeICCSD1.5°Cand2°Cpathways,totalCO2emissionsfromthetransportationsectorpeakaround2030,at1.04and1.08billiontonnes,respectively,upfrom991milliontonnesin2020,beforeadeclineto172and550milliontonnesin2050,respectively.Theenergyefficiencyoftransportationincreasesby65%in2050from2015levels,comparedwith30%intheICCSD’spolicyscenario,depictingacontinuationofpoliciesbeforethecarbonneutralityannouncement.In2050,undertheICCSD1.5°Cscenario,theshareofpublictransportinalltravelmodesreaches60%,upfrom45%inthepolicyscenario.Thetotallengthoftherailwaynetworkgrowsto70,000kminthe1.5°Cscenario,comparedwith50,000kminthepolicyscenario.Thegrowthinprivatecarownership90continues,albeitslowly,reaching27%,from17%in2020151,andtheshareofcommutersusingcarpoolingreaches25%by2050.Modernlifedemandsdecentralised,time-sensitive,small-sized,andhigh-valuefreighttransport.AftertherestructuringofthetransportsectorundertheICCSD1.5°Cscenario,theshareoffreighttransportedbyrailwayincreasesfrom8.9%in2021152to24%in2050andbyshipfrom15.6%to22%,whiletheshareofroadfreightfallsfrom73.9%to51%.Inpassengertransportation,theshareofrailin2050isincreasedfrom38%inthepolicyscenarioto43.5%inthe1.5°Cpathway,whiletheshareofroadtransportfallsfrom34%to26.5%.Theshareofaviationwillfallslightlyfrom33%in2021to29%in2050.Forroadvehicles,electrificationrepresentsthemainthrustofemissionsreductions.Forprivatecarsandlightvehicles,battery-electricvehiclesdominate,whilefuel-cellvehiclesarealsousedtoelectrifycoachesandmid-toheavy-dutytrucks.Theshareofnewenergyvehicles(NEVs),acategorycomprisingbothelectricandfuelcellvehicles,outofallvehiclesreaches20%and85%in2030and2050respectively,comparedwith1.5%in2020.Infreight,theshareofnewenergyvehiclesrisesto5%by2030and60%by2050,upfrom0.2%in2020.151ChinaNationalBureauofStatistics.(2021).StatisticalCommuniquéofthePeople'sRepublicofChinaonNationalEconomicandSocialDevelopmentin2020.http://www.stats.gov.cn/tjsj/zxfb/202102/t20210227_1814154.html152NationalBureauofStatisticsofChina.(2022).StatisticalCommuniquéofthePeople'sRepublicofChinaonthe2021NationalEconomicandSocialDevelopment.http://www.stats.gov.cn/english/PressRelease/202202/t20220227_1827963.html.Scientificarticle.914.7.1TrendscomparedtobenchmarksFigure42AnnualchangeinoilconsumptionintransportcomparedtoenergytransitionpathwaysChina’soilconsumptionwasalmoststablefrom2019to2022,butthiswaslargelyduetothereductioninmobilitycausedbyCOVID-19controlmeasures.Theremovalofpandemiccontrolmeasuresresultedinasignificantreboundin2023,andthelonger-termtrendisdifficulttodiscernfromdata.Thetransitionpathwaysconsistentwith1.5degreesprojectnear-zerogrowthintransportoildemandfrom2020to2030.92Figure43AnnualchangeintheelectrificationratiointransportcomparedtoenergytransitionpathwaysFigure44Annualchangeinelectricityconsumptionintransportcomparedtoenergytransitionpathways93Theshareofelectricityintransportenergyuserosefrom3.4%in2018to4.7%in2023.Thisishalfoftheapproximately0.5%-points/yearrateachievedinthetransitionpathways.ItislikelythatnotallEVchargingisshowingupinreportedelectricityconsumptionforroadtransportationandchargingservices,sotheactualrateofelectrificationislikelytobefaster.Electricvehicleproductionandsaleshavebeenskyrocketing,withtheshareofEVsoutofallvehiclesproducedincreasingfrom5%in2019to30%inthe12monthsuptoAugust2023.Asaresult,theshareofEVsoutofallvehiclessoldinthepastdecade–aproxyforthemixofcarsontheroad–increasedfrom4%attheendof2021to12%attheendofAugust2023.ThismeansthatEVadoptionlikelyshavedapproximatelyfourpercentagepointsoffgasolinedemandgrowth.Sinopec,China’soil-and-gasgiant,recentlysaidthatthetransitiontoEVswouldcauseChina’sgasolinedemandtopeakin2023153.Gasolineonlyrepresents20%ofChina’soilconsumption.However,duetothehighshareoffreightinoveralltransportationoildemand,alotdependsonthedevelopmentofbulkfreightvolumes,effortstoshiftmorefreightonrails,andtheelectrificationoffreightthatisstillinitsinfancy.TheIEAEnergyTechnologyPerspectivesprojectsa65%shareofEVsinnewvehiclesalesby2030globally,whichChinacouldwellbeontracktoachievegiventherateofgrowth.The30%shareof“newenergyvehicles”outofallvehiclesontheroadprojectedintheICCSD’s1.5°Cpathwayin2030shouldbemetcomfortablyonthecurrenttrajectory.ThedecarbonisationandelectrificationoftransportinChinaaresupportedbyahighlydevelopednetworkofhigh-speedrailconnectionsbetweencities,aswellasurbanrailandbustransport.Busfleetsarebeingelectrifiedrapidly,oftenaspartofairpollutionactionplans.Investmentinrailtransportationincreased22%inthefirstninemonthsof2023,fromanalreadyhighbase.Themixoftransportmodesdoesn’tshowamajoreffectfromthemassiveinvestment.Railwaypassengervolumesandpassenger-kilometreshavebarelyrecoveredto2019levelsinthefirsteightmonthsof2023.Therecoveryinairtravelisidentical,showingnoshiftfromairtorailfrom2019to2023.Refineryoutputofgasoline,asaproxyforroadtravel,wasalready15%above2019levelsinthefirsteightmonthsof2023.Infreight,railwaytonnekilometresincreasedby23%fromthefirsteightmonthsof2019tothesameperiodin2023,showingmoreprogress.153BloombergNews.(Aug2023).China’sGasolineDemandtoPeakEarlyonFastAdoptionofEVs.https://www.bloomberg.com/news/articles/2023-08-04/china-s-gasoline-demand-to-peak-early-on-fast-adoption-of-evs?sref=Oz9Q3OZU.Newsreport.94Figure45Vehicleproduction;12-monthmovingsum4.7.2Policiesinplace:Actionsforpromotinggreenandlow-carbontransportationTheChinesegovernmenthaslaidoutthreemajoractionsforgreenandlow-carbontransportation:1)promotenewenergyvehicles;2)buildgreentransportationsystems;3)buildgreentransportationinfrastructure.WepresentaselectionofpoliciesinTable9,below.Table10SelectedpoliciesrelatingtotransportationPolicynameReleaseTargetsandhighlightsdateNewEnergyVehicle2020-11-2●By2025,thecompetitivenessofChina’snewenergyvehiclemarketwillbeIndustryDevelopmentsignificantlyenhanced.TheaveragepowerconsumptionofnewpureelectricPlan(2021-2035),passengercarswilldropto12.0kWh/100kilometres,andthesalesofnew(OfficeofStateCouncil)energyvehicleswillaccountforabout20%ofthetotalsalesofnewcars.●After15yearsofcontinuousefforts,thecoretechnologyofChina’snewenergyvehicleswillreachtheinternationaladvancedlevel.“14thFive-Year”2022-01-21●Decreasetherateofcarbondioxide(CO2)emissionsperunitoftransportDevelopmentPlanforturnoverofoperatingvehiclescomparedto2020(5%).DecreaserateofGreenTransportation,carbondioxide(CO2)emissionsperunitoftransportturnoverofoperating(MinistryofTransport)shipscomparedto2020(3.5%).Increasetheproportionofnewenergyvehiclesinthefieldofurbanpublictransportation,taxis(includingonlinecar-hailing),andurbanlogisticsanddistributionnationwide(72%,35%,95PolicynameReleaseTargetsandhighlightsdate20%).Increasetheproportionofnewenergyandcleanenergytrucksin14thFive-YearPlanfor2022-01-18internationalcontainerhubsea-ports(60%).theDevelopmentof●Thehigh-speedrailwaynetworkwithaspeedof250kilometresperhourandModernTransportationabovewillcovermorethan95%ofcitieswithapopulationofmorethanSystem,(StateCouncil)500,000.TransportationCO2emissionintensityreductionrate(5%).Guidanceonfurther2023-6-19●AimstoestablishanationwidechargingnetworkforEVsby2030.buildingahigh-qualitycharginginfrastructure●Extendthepurchasetaxreductionduring2024-2027.system(OfficeofStateCouncil)Announcementon2023-6-19ContinuingandOptimisingtheVehiclePurchaseTaxReductionPolicyforNewEnergyVehicles(MinistryofFinance)ElectricvehiclessalesandmanufacturingSincetheannouncementoftheEnergySavingandNewEnergyVehicleDevelopmentPlan(2012-2020)in2012,China’selectricvehicleindustryhastakenatremendousdevelopmentandbecameagloballeader.ChinawasagainthetopmarketforEVs,withsalesincreasingby82%year-over-yearto6.2millionEVsin2022;thatwas59%oftheglobaltotal154.Localbrandstakeup81%oftheEVmarket,withBYD,Wuling,Chery,Changan,andGACamongthetopplayers155.Thelatestpoliciesthathavebeenputintoforcein2023continuethegovernment’sstrongsupportfornewenergyvehicles—mainlyelectricvehicles.-Despitetheendofthenationalpurchasesubsidyfornewenergyvehiclesattheendof2022,subsidiesfromprovincialgovernmentshavesteppedintoreplaceit.Thenationalpurchasesubsidyhadbeeninplacesince2009,supportingthegrowthofthenewenergyvehiclesindustrystartingfromscratch156.Additionally,theMinistryofFinanceextendedthevehiclepurchasetaxreductionfornewenergyvehiclesfrom2024to2027.Thepurchasetaxreductionfornewenergyvehiclesstartedfrom2014,resultinginaccumulatedtaxcutsofover200billionyuanbytheendof2022andestimatedtoamountto115billionyuanin2023only.Theextensionfrom2024to2027willmeanatotalof520millionyuanintaxdeductions157.-ThecharginginfrastructureforEVsisalsogrowingrapidly.Thenumberofchargingstationsincreasedfromlessthan100,000in2015to6.4millioninMay2023.Over80%ofthedowntown154ICCT.(June2023).AnnualUpdateontheGlobalTransitiontoElectricVehicles:2022.https://theicct.org/publication/global-transition-electric-vehicles-update-jun23/.Report.155EVMarketreport.(2023).BYD’sGrowingMarketShareinChina’sEVMarket.https://evmarketsreports.com/byds-growing-market-share-in-chinas-ev-market/.News.156XinhuaNews.(Feb2023).Thepolicyofsubsidiesforthepurchaseofnewenergyvehicleshasendedin2023.http://www.news.cn/fortune/2023-02/21/c_1129382110.htm.News.157People’sDaily.(June2023).Thehigh-qualitydevelopmentofthenewenergyvehicleindustryreceivesfurtherpolicysupport.https://www.gov.cn/zhengce/202306/content_6887954.htm.News.96areasoffirst-tiercities(megacitieslikeBeijing,Shanghai,andGuangzhou)haveinstalledchargingstations,and65%ofthehighwayservicezonesnationwideprovidechargingservice158.TheGuidanceonFurtherBuildingaHigh-qualityChargingInfrastructureSystemreleasedinJune2023aimstoestablishanationwidechargingnetworkforEVsby2030.BesidesthewidespreaduseofEVsinurbanareas,NDRCreleasedtheGuidanceonAcceleratingtheConstructionofChargingInfrastructureandPromotingNewEnergyVehiclesinRuralAreas.-ProvincessuchasShanghai159,Zhejiang160,Jiangsu161,Anhui,Fujian162,Guangdong163andHunan164,allmadeambitiousplanstodevelopthenewenergyvehiclemanufacturingindustry.EVmanufacturersintheYangtzeRiverDelta(YRD),includingShanghai,Zhejiang,JiangsuandAnhui,haveformedregionalindustrialclusters.TheEVproductioninYRDin2022reached2.9million,accountingforover40%ofthenationalproduction165.RailwayconstructionWe’veseenrapiddevelopmentofthenationalrailways,especiallyhigh-speedrailwaysandurbanrailtransit,inthepasttwodecades(Table11).Thelengthoftherailwaylinesinusenationwidereachednearly146,000kmin2020,including38,000kmhigh-speedrailways.Thecombinedtracklengthofurbanrailtransitsystemswas6,600km,whichhadseena2to3-foldincreaseineveryfiveyears.Railandwatertransporthavethelowestemissionsperkilometreandunittransported,whileaviationandroadtransportemitsignificantlymore.Withthefastdevelopmentoftherailwaynetwork,theproportionofrailwayfreightvolumeinthetotalfreightvolumeincreasedfrom7.8%in2017to9.2%in2021166.158XinhuaNews.(July2023).Totacklethechallengeof"difficultyinfindingchargingstations,"Chinaisintensifyingeffortstoexpandtheinfrastructurefornewenergyvehiclecharging.https://www.gov.cn/zhengce/202307/content_6891764.htm.News.159ShanghaiMunicipalGovernment.(Feb2021).ImplementationplanforthedevelopmentofthenewenergyvehicleindustryinShanghai(2021-2025).https://www.shanghai.gov.cn/nw12344/20210225/c76899471d0d4abea77b26d54d7fb972.html.Policy.16021stCenturyEconomicReport.(May2021).Zhejiang’snewenergyvehicleindustry“14thFive-YearPlan”released.https://m.21jingji.com/article/20210507/herald/c2f2877e82d71ad40d5727601df09f29_zaker.html.Newsreport.161JiangsuMunicipalGovernment.(Nov2021).14thFiveYearPlanforNewEnergyVehiclesDevelopmentofJiangsuProvince.http://www.jiangsu.gov.cn/art/2021/11/24/art_46144_10124132.html.Policy.162FujianMunicipalGovernment.(Apr2022).PlanforNewEnergyVehiclesDevelopmentofFujianProvince(2022-2025).https://fdi.swt.fujian.gov.cn/uploadfiles/file/20220426/1650941604952489.pdf.Policy.163GuangdongMunicipalGovernment.(Oct2020).GuangdongProvince'sActionPlanfortheDevelopmentofStrategicPillarIndustryClustersintheAutomobileSector(2021-2025).http://www.gd.gov.cn/zwgk/zcjd/snzcsd/content/post_3097936.html.Policy.164HunanMunicipalGovernment.(Dec2022).Measurestosupportthehigh-qualitydevelopmentofthenewenergyvehicleindustry.https://gxt.hunan.gov.cn/gxt/xxgk_71033/zcfg/gfxwj/202212/t20221230_29171166.html.Policy.165People’sDaily.(July2023).TheintegrateddevelopmentoftheYangtzeRiverDeltaregionhasformedaclusterofnewenergyvehicleindustry.http://paper.people.com.cn/rmrb/html/2023-07/25/nw.D110000renmrb_20230725_1-07.htm.News.166GuangmingDaily.(Oct2022)."Roadtorail"and"Roadtowater"haveachievedremarkableresults,andthetransportationstructurecontinuestobeoptimised.https://economy.gmw.cn/2022-10/31/content_36126790.htm.News.97ThetotallengthofChina’srailwaynetworkisstillbehindtheUSandEU27167,168,whicharebothover200,000kilometres.Chinacontinuesitsambitiousconstructionplanforrailwaysandurbanrailtransitinthe14FYPperiod(2021–2025).2022datashownationalrailwayfixedassetinvestmentwas710.9billionyuan,and4,100kilometresofnewlineswereputintooperation,including2,082kilometresofhigh-speedrailways.Thenationalrailwayoperatinglengthreaches155,000kilometres,ofwhich42,000kilometresarehigh-speedrailways169.Table11Totallengthoftherailwaylinesandurbanrailtransitinusefrom2005to2025(1,000km)Type20052010201520202025target(non-binding)Railway7591121146165High-speedrailway193850Urbanrailtransit0.431.43.36.610Source:12thFive-YearPlanforTransportation,13thFive-YearPlanfortheDevelopmentofModernTransportation,and14thFive-YearPlanfortheDevelopmentofModernTransportation,governmentwebsite.4.7.3DatadisclosureDataontheapparentconsumptionofoilproductsusedtobepublishedbytheNationalEnergyAdministrationonamonthlybasisuntilearly2022,butisnotpubliclyavailable.Totalrefinerythroughputandimportsandexportsofoilproductsarepublishedmonthly,butthisdataisnotdisaggregatedbytypeofproduct.Thesedatasetsarenotspecifictothetransportsectorbutneverthelessprovideanindicationofthedevelopmentofemissions.Actualenergyconsumptiondataforthesectorarepublishedonanannualbasisandwithadelayof1–2years.OfficialinformationonCO2emissionsfromtransportationhasonlybeenpublishedtwice,withthelatestdatacoveringtheyear2014.4.8Provincialactions4.8.1Policiesinplace:China’sclimatetransitionrequirescollectiveeffortsonprovinciallevelAchievingnationalgoalsoncarbonpeakingandcarbonneutralityrequirecollectiveandcoherenteffortsfromprovincialgovernments,astheyarethemainfunctionalbodiesforimplementingthecentralgovernment’spolicies.Afterthenationalactionplanforreachingpeakcarbonby2030was167Wikipedia.(2023).Listofcountriesbyrailtransportnetworksize.https://en.wikipedia.org/wiki/List_of_countries_by_rail_transport_network_size.Wikipedia168Statista.(2023).TotallengthoftherailwaylinesinuseintheEuropeanUnion(EU-27)from1990to2020.https://www.statista.com/statistics/451812/length-of-railway-lines-in-use-in-europe-eu-28/.Statista.169People’sDaily.(May2023).Nationalrailwayfixedassetinvestmentin2022reached710.9billionyuan.http://finance.people.com.cn/n1/2023/0529/c1004-40001474.html.Newsreport.98releasedinOctober2021170,31provincesandmunicipalitieshaverolledouttheirindividualactionplansforcarbonpeaking.TargetsforareductioninenergyconsumptionperunitofGDP,areductioninCO2emissionperunitofGDPandnon-fossilenergyconsumptionby2025and2030wereraisedintheseplans.Basedonpublicsources,threeprovinces(Hubei,XinjiangandTibet)donothavequantitativetargetsforareductioninenergyconsumptionandareductioninCO2perunitofGDPby2025,andXinjiangdoesnothaveaquantitativetargetfornon-fossilenergyconsumptionproportionby2025.12provincialgovernments(Hubei,Xinjiang,Tibet,Henan,Shanxi,Ningxia,Heilongjiang,Hebei,Qinghai,Yunnan,GuangdongandChongqing)donothavetargetstoreduceCO2emissions,andsixprovincialgovernments(Hubei,Xinjiang,Henan,Jiangsu,BeijingandYunnan)donothavetargetsrelatingtonon-fossilenergyconsumptionby2030.Theresponsibilityforclimateeffortsisnotalwaysevenlyshared,consideringnaturalresourcesandeconomicgrowthareoppositelydistributedinwesternandeasternChina.Provincesthathaveachievedhighereconomicperformancegenerallyhavelesscleanenergyresourcesbutlargerenergyconsumption,resultinginlessdevelopedregionstakingmostoftheresponsibilityfordecarbonization.Thenationalgoalofreachingaround20%ofnon-fossilenergyconsumptionproportionislargelysupportedbywesternunderdevelopedregionswhichhaveabundantnaturalresourcesofsolar,windandhydropower.Theprovincialtargetsfornon-fossilenergyconsumptionproportionofQinghai,Tibet,YunnanandSichuanexceedthenationaltargetbyover20percentagepoints,whilethetargetsofnorthernprovinceswhichrelyheavilyoncoal-burning,likeTianjin,Hebei,ShandongandShanxi,arebelowthenationaltarget,withadiscrepancyofupto8.3percentagepoints.Accordingtoprovincialgoals,by2030,Hainanrisestothethirdplacewith54%ofnon-fossilenergyconsumption,whileregionsinJing-jin-jiareaandFenweiplainhavekeptnon-fossilenergyconsumptionbelowthenationalaverage.Figure46Comparisonofprovincialtargetsonnon-fossilenergyconsumptionproportionby2025170CentralgovernmentofPeople’sRepublicofChina.(Oct2021).ActionPlanforCarbonDioxidePeakingBefore2030.https://www.gov.cn/zhengce/content/2021-10/26/content_5644984.htm.Policy99Figure47Comparisonofprovincialtargetsonnon-fossilenergyconsumptionproportionby2030Whenweexaminethenon-fossiltargetsbyconsideringbaselinenumbersin2020,theamountofincreaseisdistributeddifferently.Guangdongisthesingleprovincethatplannedadecreaseinnon-fossilenergyconsumptionproportion,from30%in2020to29%in2025;theprovincesthatplannedforthelargestincreaseinnon-fossilfuelimplementationareTibet(8.5%points),Shaanxi(8.1%points)andJiangsu(7.0%points);theprovincesthatplannedforthesmallestincreaseareHunan(0.3%points),Shanghai(2.0%points)andGuizhou(2.4%points).SurprisinglyGuangdong,astheprovincewiththelargestGDP,issteppingbackwardsonthepromiseofcleanenergy.Itledanewcoalspreein2022andcontinuedinthefirsthalfof2023toinitiateandpermitmorenewcoalprojects.Guangdongʼskeypowergenerationconstructionprojectsfortheyear2023include31GWofcoal-firedpowerand27GWofgas-firedpower,whichrepresentthemajorityofnewcapacity.Guangdonghasfourtimesasmuchdispatchablecapacityasthereisvariablecapacity,makingtheadditionofnewcoalpowerhardlycanbejustifiedas“supportive”toplannedsolarorwindcapacity.ExceptforTibetandQinghai,theplacesthatsetthehighestincreaseinnon-fossilenergyconsumptionaremainlytheoneswithrelativelylowbaselinenumbersin2020.Coal-abundantnorthernregionslikeShaanxi,InnerMongolia,HebeiandShandong,andimportantYangtzedeltaprovincesincludingJiangsu,ZhejiangandAnhuihavesettargetsthatarehigherthanthenationaltargetof5%-pointincrease.Figure48Comparisonofprovincialtargetsforprojectedincreaseofnon-fossilenergyconsumptionproportionby2025withbaselinenumbersin2020Note:BeijingandTianjinaremissingpubliclyreportedbaselinenumbersfornon-fossilenergyconsumptionproportionin2020,andthushereonlyshowstheirtargetnumbersby2025.100Provincialgovernments’enthusiasmforcleanenergyinvestmenthasdrivenupChina’stotalcleanenergycapacity.Mediareportedthatsolarprojectsweregiventhebestinvestmentdealsinhistoryandthispatternisfollowedeverywherethesameacrossthecountry.Forexample,the56GWofsolarpowerbaseofJingkeEnergylocatedinShanxihasgainedgreatsupportfromtheShanxigovernment.Themajorfundingofthisproject,amountingto20-30billionRMB,mainlyreliesonlocalurbaninvestmentfundsorurbaninvestmentplatformsthatprovideguaranteesforcorporatebondfinancing.Furthermore,thegovernmentinvestmentreturnrateisabove30%171.Thelogicbehindinvestmentsinsolar,windpowerandelectricvehiclesproductioncanbeexplainedbythelocalgovernments’economicpressureafterconductingdynamiczero-COVID-19policyforthreeyearsandthelimitationsoftheenergyconsumptionperunitofGDPreductiongoalassignedbythecentralgovernment.Centralgovernmentpromotedcleanenergyinvestmentbytakingtheenergyconsumptionofcleanenergyproductionoutofthegrossenergyconsumptioncap.Provincialgovernmentsusecleanenergyinvestmentasaneffectivemeanstoobtainfinancialsupportfromthecentralgovernment,andtoissuenewcreditsandinvestments.Theoverallgoalofcleanenergyinvestmentistoreducetheenergyintensityofeconomicdevelopment.However,insomeprovinces,thelackofcompatibilitybetweenthedevelopmentofdistributedresidentialphotovoltaicsandflexiblepowerregulationsources,aswellasenergystoragefacilities,areresultinginlocalisedoversupplyofdistributedresidentialphotovoltaicsinChina.Duringthefirsteightmonthsof2023,Henan,ShandongandHubeiledsolarpowerinstallationsinChina,strivingtomeetrooftopsolarinstallationtargetsbytheendof2023.Henanalonehasaddedover8GWofsolarcapacityinthisperiod.InnerMongolia,XinjiangandYunnanledwindcapacityinstallations,withInnerMongoliahasnewlyinstalledover6GWofwindpowersofar.InMay2023,therewasanextendedperiodofnegativeelectricitypricesintheelectricitymarketofShandong172.ThesurpluselectricitygeneratedbytherapidlygrowingdistributedphotovoltaicsystemsinShandongmayhaveexceededthepowerdistributionnetwork'scapacityforabsorption173.Itsendsaclearsignalfortherationalplanninganddeploymentofmedium-tolong-termresources.Shaanxi,GuangdongandInnerMongoliarankedtopforthermalpowerinstallationamidalargewaveofnewcoalpowerprojectsinChina,whichstartedinsummer2022.Newcoalprojectsarelargelylocatedinprovincesthatalreadyhavemorethanenoughcoalpowertosupportexistingandplannedwindandsolarcapacity.Contrarytothecentralgovernment’sguidance,localgovernmentstakenoeffectiveenforcementofthepolicieslimitingnewprojectpermitting174.Beforeemissionspeakby2030,somelocalgovernmentsarerushingtobuildmorehigh-energy-consumingandhigh-emissionprojectsbeforethedeadline.Someplacesbeganconstructinghigh-energy,highemissionsprojects171Caixin.(Sep2023).CoverStory:AreChineseSolarGiantsFlyingTooClosetotheSun?https://weekly.caixin.com/2023-09-01/102099376.html.Newsarticle.172Caixin.(Jun2023).Shandongexperiencingconsecutivenegativeelectricityprices,arareoccurrenceglobally.WhathashappenedinChina'selectricitymarket?https://zhishifenzi.blog.caixin.com/archives/268002#.Blogarticle173EnergyMagazine.(Oct2023).DeepReflectionHaselectricityinvestmentoverheated?https://mp.weixin.qq.com/s/LImbFPb1mG10DX9MU0Lc-g.Blogarticle174CREA.(Aug2023).China’snewcoalpowerspreecontinuesasmoreprovincesjumponthebandwagon.https://energyandcleanair.org/publication/chinas-new-coal-power-spree-continues-as-more-provinces-jump-on-the-bandwagon/.Report101beforetheywereapproved175.Inthefirsthalfof2021,theNDRCreportedthateightprovincesreachedthefirst-levelwarningontotalenergyconsumptioncontrol(anddidnotmeetthetargetandexceededthetargetforover10%),andfiveprovincesreachedthesecond-levelwarning(didnotmeetthetargetandexceededthetargetforwithin10%)176.Sincethen,NDRChasstoppedpublishingtheannuallyreportedenergyconsumptioncontrolevaluationresultsofthelocalgovernments,butslowprogressonthenationallevelindicatesthatmanyprovincesareofftrack.Figure49NewlyinstalledpowercapacityofdifferentenergysourcesfortheleadingprovincesbetweenJanuaryandAugust2023Theprovinces’energyconsumptionandCO2emissiontargetsby2025and2030arehighlyuniform.ThisuniformityresultedfromtheCentralCommitteeoftheCommunistParty’swarninginJuly2021against“campaignstyle”measurestoreduceemissionsandorderforprovincestofollowtheplanandpacesetonthenationallevel177.Inearly2021,afterthedualcarbontargetsweremadeamajorpolicyandpublicfocusbyXiJinping,theresponsefromtheprovinceswastosetambitioustargets.ThecentralgovernmentwasconcernedthatCO2peakingwasbeingpursuedwithexcessivezeal,atthe175DevelopmentResearchCentreoftheStateCouncil.(Sep2021).ChangJiwen:Correctingthe'campaign-style'carbonreductionrequiresbuildingbeforebreaking.https://www.drc.gov.cn/DocView.aspx?chnid=379&leafid=1338&docid=2903880.Policyinterpretation176NDRC.(Aug2021).NoticeontheIssuanceofthe'ClearandRainyTable'fortheCompletionofEnergyConsumptionDualControlTargetsinVariousRegionsintheFirstHalfof2021.https://www.ndrc.gov.cn/xwdt/tzgg/202108/t20210817_1293836.html.Policy177DevelopmentResearchCentreoftheStateCouncil.(Sep2021).ChangJiwen:Correctingthe'campaign-style'carbonreductionrequiresbuildingbeforebreaking.https://www.drc.gov.cn/DocView.aspx?chnid=379&leafid=1338&docid=2903880.Policyinterpretation102expenseofotherpolicygoals,withprovincescompetingtooutdoeachother178.178NDRC.(Aug2021).AnswertoAugustPressConferenceQuestionFour.https://www.ndrc.gov.cn/xxgk/jd/jd/202108/t20210817_1293876_ext.html.Pressrelease103Figure50Comparisonofprovincialtargetsonreductioninenergyconsumptionby2025(comparedtolevelsin2020)Figure51ComparisonofprovincialtargetsonreductioninCO2emissionby2025(comparedtolevelsin2020)Figure52ComparisonofprovincialtargetsonreductioninCO2emissionby2030(comparedtolevelsin2005)4.8.2RecentadjustmentstotargetsTheenergy-intensivepatternofeconomicgrowthduringandafterzero-COVID-19hasmadeithardformostprovincestomeettheirtargets.Sinceprovincialcarbon-peakingpolicieshavebeenlaidout,afewprovinceshaveadjustedtheirplanstoopenupspaceforfossilfueldevelopment.EarlierinJune2022,Guangdongsetatargetof“morethan32%”fortheproportionofnon-fossil104energyconsumptioninitscarbon-peakingactionplan179.InMay2023,GuangdongProvinceissuedthe"ImplementationPlanforPromotingHigh-QualityEnergyDevelopment,"reducingtheproportionofnon-fossilenergyconsumptiontargettoapproximately29%by2025180.SichuanincreasedthetargetedshareofthermalpowerinitsProvincial14thFive-YearPeriodElectricityDevelopmentPlan181from15.6%to16.6%by2025toincreasetheuseoflocallyproducedcoal,accordingtoSichuan’sprovincialpowerandgriddevelopmentplan(2022–2025)releasedinDecember2022.BetweenSeptember1stand8th2023,provincialDevelopmentandReformCommissionsofHubei,Shanxi,GansuandQinghaiwereengagedintalkswiththeNDRC,whichoverseesChina’scarbonpeakingandcarbonneutralitywork,aboutfallingbehindonfulfillingenergysavingtargetsforthe14thFYPperiod182.InOctober,NDRCalsoengagedZhejiang,Anhui,GuangdongandChongqingprovincialgovernmentsinthesametalksaboutlaggingbehindonreducingenergyintensity183.Thesemeetingshavepointedoutthattheeightprovincesandmunicipalitiesthatwereengagedinthetalkshadrelaxedenergy-savingcontrolsandpoormanagementofprojectswithhighenergyconsumption,highemissionsandlowstandards.Inthesemeetings,NDRCemphasisedthatthereductionofenergyconsumptionintensitymustbemet,however,energyconsumptiongrewrapidlywhileenergyefficiencyimprovedslowlyintheseregionsinthefirsttwoyearsofthe14thFYPperiod,evenafterdeductingenergyconsumedbyrawmaterialsproductionandtheuseofrenewableenergy.Energyintensityhasevengoneupratherthandownincertainregions,causingconcernsthattheprovincialgovernmentdepartmentsarenotcarryingouttheenergyconsumptioncontrolproperly.179People’sGovernmentofGuangdongProvince.(Feb2023).NoticefromthePeople'sGovernmentofGuangdongProvinceontheIssuanceoftheImplementationPlanforCarbonPeakinginGuangdongProvince.http://www.gd.gov.cn/zwgk/wjk/qbwj/yf/content/post_4091117.html.Policy180GuangdongProvincialDevelopmentandReformCommission.(May2023).NoticefromtheGuangdongProvincialEnergyBureauontheIssuanceoftheImplementationPlanforPromotingHigh-QualityEnergyDevelopmentinGuangdongProvince.http://drc.gd.gov.cn/ywtz/content/post_4186277.html.Policy181SichuanProvincialDevelopmentandReformCommission.(May2022).NoticefromtheDevelopmentandReformCommissionofSichuanProvinceandtheEnergyBureauofSichuanProvinceontheIssuanceofthe'14thFive-YearPlanforElectricityDevelopmentinSichuanProvince.https://fgw.sc.gov.cn/sfgw/c106096/2022/5/26/2d856d99f07c40b1a945c900731a7a85.shtml.Policy182NDRC.(Sep2023).TheNationalDevelopmentandReformCommission'sEnvironmentalProtectionDivisionHoldsTalkswithSelectedLocalEnergyConservationAuthorities.https://www.ndrc.gov.cn/fzggw/jgsj/hzs/sjdt/202309/t20230914_1360598.html.Newsrelease183NDRC.(Oct2023).TheNationalDevelopmentandReformCommission'sEnvironmentalProtectionDivisionHoldsTalkswiththeEnergyConservationAuthoritiesofZhejiang,Anhui,Guangdong,andChongqing.https://www.ndrc.gov.cn/fzggw/jgsj/hzs/sjdt/202310/t20231019_1361344.html.Newsrelease1055Expertsurveyandinterviews2023Highlights●Responsesfromanexpandedgroupof89expertsthisyearhaveshownviewsshiftedtowardsamoreoptimisticdirectioncomparedtotheresultsfromlastyear.TheresultssuggestthatthemajorityofexpertsacknowledgeChinaisontracktoreachitscarbonpeakbefore2030,thoughlimitingemissionsincreasesduringthisdecaderemainsasignificantchallenge.●Thisyear’ssurveyresultsshowedalargedifferenceinansweringwhetherChina'scoalconsumptionpeakedcomparedwithlastyear’s,with34%ofexpertsansweringunsure,whichincreasedfrom12%lastyear.Thismayreflectthatthedevelopmentofcoalpoliciesoverthepastyearhasinjectedmoreuncertainty.●TheresultsofthepasttwosurveysrevealagrowingdivergenceinexpertopinionsregardingpeakingcarbonemissionsinChina'spowersector.Theproportionoftheexpertsbelievingthatcarbonemissionsinthepowersectoralreadypeakedorthepeakwilloccurafter2030havebothincreased.TomapexpertviewsandexpectationstowardsChina’semissionstrajectory,outstandingexpertsfromvariousfieldswereinvitedtoparticipateinaquestionnairesurveyontheprogressandprospectsofthissignificantundertaking184.Thesamesurveyquestionnairewasusedin2022tofacilitateadetailedcomparisonwithlastyear'sdata.Thisisaimedtoidentifychangesandtrendssincelastyear,especiallytodetermineifsignificantchangeshaveoccurredinspecificareasorissues.Inthequestionnaire,theparticipantswereaskedtoprovidetheirviewsonwhenChinawillreachitspeakinbothCO2emissionsandtotalenergyconsumption.TheywerealsoaskedtoprovidetheirexpectationsregardingtheCO2emissionstrajectoriesacrossvariousemission-intensivesectors,includingelectricity,industry,construction,andtransportation.Mostoftheseexpertsspecialiseinenergy,environmentaleconomics,andclimatechange(refertoFigure53).Theirprofessionalbackgroundsareextensiveandvaried,spanninghighereducation,coal,electricity,renewableenergy,andtheoilandgasindustries(refertoFigure53).Theseprofessionalsareaffiliatedwithacademicinstitutions,consultingfirms,andtheenergyindustry,suchaselectricity,oil,andnaturalgassectors(refertoFigure55).Thesurvey,conductedbetween25August2023and15September2023,receivedatotalof89validresponses.Ofthese,64werefromdomesticexpertsand25werefromoverseasexperts.Inaddition,virtualinterviewswerealsoconductedwithselectexperts.Incontrasttoconventionalquantitativestudies,whicharepredominantlybasedonmathematicalmodellingornormativeanalyses,theexpertsengagedinoursurveyleveragedtheirextensiveprofessionalexpertiseandhands-onexperiencetoaddressthequestionsposedinthequestionnaire.184ISETS,CREA.(Nov2023).China’sClimateTransitionOutlook2023:ExpertSurveyandInterviews.https://energyandcleanair.org/publication/chinas-climate-transition-outlook-2023-expert-survey-and-interviews/.Report.106Figure53Expertfieldsofexpertise(persons)Figure54Expertindustries(persons)Figure55Statusofaffiliatedinstitutes(persons)Thesurveyparticipantsincludescholarsfromuniversitiesandresearchinstitutesandoutstandingrepresentativesfromvariousfields,suchasgovernmentagencies,industrialassociations,domesticandinternationalthinktanks,state-ownedcompanies,otherenergycompanies,non-governmentalorganisations,andnewsmedia.Theirviewpointsreflectthemainstreamperspectivesintheir107respectivedomainstoacertainextent.Additionally,theirdiversebackgroundsensureoursurveyresults'broadrepresentativenessandreliability.5.1TotalemissionofcarbondioxideMorethan70%oftheexpertssurveyedbelievethatChinacanachieveitsgoalofpeakingCO2emissionsbefore2030.Ofthese,twoexpertsthinkthatChina’sCO2emissionshavealreadypeaked.While17expertspredictthatChinawillreachitscarbonpeakbefore2025,45expertssuggestitwilloccurbetween2026and2030(seeTable12).Table12SurveyresultsonChina'scarbonemissionpeakingyearWhendoyoupredictChina'stotalcarbondioxideWhichwouldbethepossiblepeakyearifemissionswillpeak?itpeaksbetween2026and2030?OptionNumberofPercentage(%)YearNumberofresponsesresponsesA.Already22%20262peakedB.Before20251719%20273C.After20302528%202814D.Between4551%2029102026and2030203013Uncertain3China'simplementationofitstransitionpolicieshaspositivelyinfluencedexpertviews,withtheproportionofexpertsbelievingthecountrywillreachitspeakcarbonemissionby2025,increasingfrom15%in2022to21%in2023.Amongthem,twoexpertsbelieveChina’sCO2emissionsmayhavealreadypeaked.Correspondingly,theproportionofexpertspredictingthatChina’sCO2emissionswillpeakafter2030hasdecreasedfrom31%in2022to28%in2023.Thischangemayreflecttheexperts'increasedexpectationsforChinatoachieveitsemissionreductiongoalsandgreaterconfidenceintheChinesegovernment'seffortstostrengthenemissionreduction.108Figure56ThepeakyearofChina'scarbonemissionsInthe2023survey,mostexpertsbelievethatChinaisontracktopeakitscarbonemissionsbefore2030.ThekeyquestionistowhichlevelofCOsemissionswilltheypeak.Fiftyoutof89expertspredictthatthepeaklevelwouldbemorethan15%higherthanChina'scarbonemissionsin2020(seeFigure57).Figure57Carbonemissionpeak5.2ConsumptionofprimaryenergyandcoalMorethanhalfoftheexperts(54outof89)believethatChina'sprimaryenergyconsumptionwillpeakbefore2030,probablyreflectingtheirconfidenceinChina'sabilitytocontrolthegrowthofenergyconsumption.Furthermore,13expertspredictthatprimaryenergyconsumptionwillpeakin2035,reflectingtheircautiousattitude.Twenty-twoexpertsbelievethatChina'sprimaryconsumptionwillcontinuetoincreasebeyond2035,highlightingtheirconservativeviewthatthecountry'senergydemandwillcontinuetoincreasealongwithitsrapidandcontinuouseconomicgrowth.109Table13SurveyresultsonthepeakyearforChina’stotalprimaryenergyconsumptionWhendoyouthinktheprimaryenergyconsumptioninChinawillpeak?A.Alreadypeaked7B.By203047C.By203513D.After203522RegardingthetimingofChina'speakprimaryenergyconsumption,the2023surveyresultsshowamorepositivetrendthanthepreviousyear.Firstly,theproportionofexpertswhobelieveChina’senergyconsumptionhasalreadypeakedhasdoubledfrom4%in2022to8%in2023.Secondly,53%oftheexpertsbelieveChinawillachieveapeakinprimaryenergyconsumptionbefore2030,upfrom50%inthe2022survey.Overall,thepercentageofexpertsleaningtowardsthebeliefthatChina'stotalprimaryenergyconsumptionwillpeakbefore2030hasrisenfrom54%to61%.Figure58YearofpeakprimaryenergyconsumptioninChina.Chinaannouncedin2021thatitwillstrictlycontrolthegrowthofcoalconsumptionduringthe14thFYPperiod(2021-2025)andachieveagradualreductionincoalconsumptionduringthe15thFYPperiod(2026-2030),implyingthatChina'scoalconsumptionwillpeakaround2025185.Ofthe89expertswesurveyed,18believeChina'scoalconsumptionhasalreadypeaked.However,nearlyhalf(41outof89)believeotherwise.Furthermore,30expertsrespondedwith"notsure",astheyconsiderthepeakingofcoalconsumptiontobecloselyrelatedtoChina'spoliticalandeconomicsituationinthecomingyears.Twelveexpertspredictthepeaktoarriveby2025,whilefourpredict2026.SixteenexpertsbelievethatChina'scoalconsumptionwillpeakafter2027,amongwhichsixexpertschose2028,fiveexpertschose2030,andoneselected2040.Overall,aboutone-thirdoftheexpertswhochose“no”believethat185CentralGovernmentofChina.(October2021).WorkingGuidanceforCarbonDioxidePeakingandCarbonNeutralityinFullandFaithfulImplementationoftheNewDevelopmentPhilosophy.https://www.gov.cn/zhengce/2021-10/24/content_5644613.htm.Policy.110China'scoalconsumptionwillpeakin2025.Allsurveyedexpertsemphasisedthatthepeakingofcoalconsumptionneedstoconsiderthecorrelationbetweenenergytransition,theglobalanddomesticeconomicsituationinChina,andtheimportanceofenergysecurity,sometimesevensurpassingcontrolofcarbonemissions.Table14SurveyresultsontheyearofpeakcoalconsumptioninChinaDoyouthinkChina'scoalconsumptionhasalreadyPeakyearpeaked?YearOptionNumberPercentage（%）2025NumberA.Yes1820%202612B.NotSure3034%20274C.No4146%2028220306203552038120401Uncertain19Inthe2023survey,theproportionofexpertswhobelievecoalconsumptionhasalreadypeakedincreasedby5points,reaching20%(seeFigure59).Ontheotherhand,theproportionofexpertswhobelievethatChina'scoalconsumptionhasnotyetpeakeddecreasedfrom73%in2022to46%in2023.Thepercentageofexpertsanswering“notsure”increasedsignificantlyfrom12%in2022to34%in2023.Amongtheexpertswhobelievethatthepeakhasnotbeenreached,thisyear'ssurveyshowsmoreexpertsareinclinedtothinkthatcoalconsumptionwillpeakby2025(seeTable14andFigure60).However,it'sworthnotingthatthepercentageofexpertsunsureabouttheyearofcoalpeakinghassignificantlyincreased.The2022surveyresultsindicatedthatonly12%ofexpertswere“notsure”,while2023sawasubstantialincreaseto34%.ThismaybeduetoincreaseduncertaintyasaresultofChina'scoalpoliciesoverthepastyear.Figure59HasChina'scoalconsumptionpeaked?111Figure60Numberofresponsesfordifferentyearsofcoalconsumptionpeaking5.3ThepowersectorThepowersector,contributingto40%ofthecountry'stotalcarbonemissions,playsacrucialroleinChina'seffortstodecarboniseitsindustries.Yet,opinionsvaryonwhenthesectorwillreachitsemissionspeak.While27expertsforeseethishappeningafter2030,22believeitwillhappenbetween2026and2030.Ofthese22,19providedtheirpredictionsforspecificyears.Amongthem,sevenpredicted2027,fivepredicted2028,andanotherfivepredicted2030-theself-imposeddeadlinebytheChinesegovernment.Oneexpertpredicted2026,whileanotherpredicted2029.Table15SurveyresultsonthepeakyearofcarbonemissionsinChina'spowersectorWhendoyoupredictChina'spowersector'sWhichwouldbethepossiblepeakyearifitcarbondioxideemissionswillpeak?peaksbetween2026and2030?OptionNumberPercentage(%)YearNumberA.Alreadypeaked56%B.Before20253539%20261C.After20302725%D.Between2026and2027720302230%202852029120305Uncertain3ThepasttwosurveysrevealagrowingdivergenceinexpertopinionswhenitcomestopeakingcarbonemissionsinChina'spowersector.Theproportionofexpertswhobelievethatcarbonemissionsinthepowersectorhavealreadypeakedandthosewhobelievethepeakwilloccurafter2030hasincreased.Onapositivenote,6%oftheexpertsin2023believethatChina’spowersectorhasalreadypeakeditscarbonemissions,aviewthatwasnotheldbyanyexpertsin2022.Ontheotherhand,theproportionoftheexpertsinthe2023surveywhobelievethatChina’spowersectorwillonlypeakitscarbon112emissionsafter2030hasrisento30%,upsignificantlyfrom19%in2022.Thismayreflectamorepessimisticviewofsomeexpertsregardingthefuturecarbonemissionsreductioninthepowersector.Figure61PeakyearofcarbonemissionsinChina'spowersector5.4TheindustrialsectorsThesteelindustryisthesecond-largestsourceofcarbonemissionsinChina.AsshowninTable15,therearevariedopinionsonwhenthesteelsectorwouldpeakinitscarbonemissions.Thirteenexpertsbelievethatemissionsinthisindustryhavealreadypeaked,while35expertspredictitwillpeakbefore2025.Nearlyhalfoftheexperts(48outof89)expressarelativelyoptimisticview.Inaddition,21expertsbelievethatcarbonemissionsinthesteelindustrywillpeakafter2030,while20expertsplacethepeakingtimeframebetween2026and2030.ThisdiversityofviewpointsreflectsdifferentexpertperspectivesonthecarbonreductionprospectsintheChinesesteelindustry,highlightingthechallengesanduncertaintiesthisindustryfacesinemissionsreduction.FurtherinvestigationresultsregardingtheexpertspredictingcarbonemissionsintheChinesesteelindustrypeakingbetween2026and2030showacertaindistribution.Specifically,twoexpertspredictemissionswillpeakin2026,3expertsbelievethepeakwilloccurin2028,5expertspredict2029,and4expertsanticipatecarbonemissionswillpeakin2030.Table16SurveyresultsonthepeakyearofcarbonemissionsinChina'ssteelindustryWhendoyoupredictChina'ssteelindustry'sWhichwouldbethepossiblepeakyearifitcarbondioxideemissionswillpeak?peaksbetween2026and2030?OptionNumberPercentage(%)YearNumberA.Alreadypeaked131520262B.Before2025353920270C.After2030212420283D.Between2026and202220295203011320304Uncertain6The2023surveysuggestedthatthedecarbonisationofthesteelsectorhasapositiveoutlookasexpertsbelievethatitspeakwilloccurearlierthanpreviouslyanticipated.Around15%ofexpertsbelievethatcarbonemissionsinthesteelindustryhavealreadypeaked(OptionA),comparedto8%thepreviousyear.The2023surveyrevealedasignificantincreaseinexpertspredictingthesteelsector'speaktoarrivebefore2025,from27%ofthosesurveyedin2022to39%in2023.TheincreaseisfromthosewhoinitiallyestimatedthattheChinesesteelindustrywouldpeakin2026-2030.Inthe2023surveyresults,22%ofexpertsbelievethatcarbonemissionsinthesteelindustrywillpeakbetween2026and2030(OptionD),asignificantdecreasefrom42%in2022.Thissuggeststhat,overthetwoyears,fewerexpertsholdtheviewthatthepeakingtimewillbedelayeduntil2026-2030.Thereislittlechangewhenitcomestothosepredictingthepeaktooccurafter2030(OptionC),from23%in2022to24%in2023.Theseresultsindicatethatsomeexpertsaremoreoptimisticaboutthesteelindustry'semissionreductionachievementsandtheyearofitspeak.Inparticular,one-fifthofexpertssurveyedhavebroughtforwardthepeakingyearby1-5years.Figure62PeakyearofcarbonemissionsinChina'ssteelindustryThecementindustryislistedasChina'sthird-largestsourceofcarbonemissions.The2023surveyresultsshowthatnearly60%ofexpertsbelievethatcarbondioxideemissionsinChina'scementindustrywillpeakbefore2025;approximately21%ofexpertsbelievethatcarbonemissionsinthecementindustryhavealreadypeaked,and38%ofexpertspredictthatthepeakwilloccurbefore2025.Amongtheremaining40%,17%ofexpertspredictthepeakwilloccurbetween2026and2030,while24%ofexpertsbelievethepeakwilloccurafter2030.Oftheexpertspredictingthepeakyearbetween2026and2030,nonepredictittohappenin2026.However,twoexpertspredictthepeakyeartobe2027,fourexpertsanticipate2028,andothertwoandthreeexpertsforecast2029and2030,respectively.Fourexpertsdidnotprovidespecificyears(Table17).114Table17SurveyresultsonthepeakyearofcarbonemissionsinChina'scementindustryWhendoyoupredictChina'scementindustry'sWhichwouldbethepossiblepeakyearifitcarbondioxideemissionswillpeak?peaksbetween2026and2030?OptionNumberPercentage(%)YearNumberA.Alreadypeaked1921%20260B.Before20253438%20272C.After20302124%20284D.Between2026and1517%20292203020303Uncertain4Thisyear'ssurveyhasshownincreasedoptimismamongstexperts,with21%believingthecementindustryhasalreadypeakedinitscarbonemissionsin2023,upfrom8%lastyear.Meanwhile,theproportionofexpertswhothinkthecementindustrywillnotreachitspeakuntilafter2030hasdecreasedfrom38%in2022to24%in2023.Asforthepredictionsofpeakingbefore2025(OptionB)andbetween2026and2030(OptionC),theproportionsofexpertsremainroughlythesame.Figure63ThepeakyearofcarbondioxideemissionsinChina'scementindustry5.5ThetransportationsectorSincethe1980s,China'stransportationsectorhasexperiencedasharpincreaseinpassengerandfreightvehicles,leadingtoasignificantriseinenergyconsumptionandcarbondioxideemissions.Roadtransport,whichprimarilyreliesonpetroleum,isthissector'slargestcarbondioxideemissionssource.Comprehensivemeasuresneedtobetakentoreducecarbondioxideemissionsfromthetransportationsector.115Asperthe2023survey,37%oftheexpertsbelievethatthetransportsectorwillreachpeakcarbonemissionsbefore2030(OptionA),while43%predictittohappenbetween2030and2035(OptionB).Some15%anticipatepeakingbetween2035and2040(OptionC),while5%predictafter2045(OptionD)(Table18).Comparedtopreviouspredictions,theseresultsindicatethatexpertshaveamorediversifiedviewonthepeakingtimeofcarbonemissionsintheChinesetransportationsectorwithoutaclearconsensus,asseeninearlierstudies.Table18SurveyresultsonthepeakyearofcarbondioxideemissionsinChina'stransportationsectorWhendoyoupredictChina'stransportationsector'scarbondioxideemissionswillpeak?A.Before203033B.2030-203538C.2035-204013D.2045andbeyond5Thesurveyresultsin2023and2022indicatethatmoreexpertshavebroughtforwardthepeaktimeofcarbondioxideemissionsinChina'stransportationsector.Theexpertsanticipatingpeakingbefore2030(OptionA)significantlyincreasedfrom23%in2022to37%in2023.Incontrast,theexpertspredictingthesectortopeakbetween2030and2035(OptionB)decreasedfrom50%in2022to43%inthe2023survey.Meanwhile,theexpertsforecastingthepeakingtimebetween2035and2040(OptionC)alsodecreasedfrom19%in2022to15%inthe2023survey.Figure64PeakyearsofcarbondioxideemissionsinChina'stransportationsector5.6NewdynamicsTheCOVID-19pandemichashadmultifacetedimpactsonenergytransition.Ontheonehand,thepandemicslowedeconomicactivities,causinglowerenergydemandandreducingthecapacitytoinvestincleanenergy.Ontheotherhand,governmenteconomicstimulusmeasureshavecreated116opportunitiestodevelopcleanenergytechnologies.EmpiricalresearchbyLietal.(2022)foundthattheCOVID-19pandemicincreasedlow-carbonelectricitygenerationandacceleratedthetransitiontolow-carbonenergysources.TheIEApredictsthatinvestmentincleanenergytechnologieswillbenearlytwicethatoffossilfuelsby2023.Consideringthepowershortagesthecountryfacedthelasttwoyears,weincludedtwoquestionstounderstandexpertopinionsandrecommendationsfortheenergytransition.Expertsholddifferingviewsontheimpactofthepost-pandemiceconomicsituationinChinaontheenergytransitionprocess.Overhalf(51%)oftheexpertsbelievethatthepost-pandemiceconomicsituationwillacceleratetheenergytransition,possiblybecausesomelow-carbontrends,suchasdecreasedcarbonemissionsandincreasedrenewableenergyadoption,emergedduringthepandemic.However,34%ofexpertsareconcernedthatthecurrenteconomicsituationwillslowtheenergytransition,possiblyconsideringthateconomicdevelopmentmaybeprioritisedoverlow-carbonenergytransition.Additionally,9%ofexpertsbelievethattheeconomicsituationwillnotaffecttheenergytransition,and7%areunsure.ThismayreflectthehighuncertaintylevelinChina'scurrenteconomicsituation,makingitdifficulttoaccuratelypredictthespecificimpactonthefutureoftheenergytransition.Table19SurveyresultsontheimpactofChina'spost-pandemiceconomicsituationontheenergytransitionprocessHowdoyouthinktheeconomicsituationinChinaafterthepandemicwillaffecttheenergytransitionprocess?A.Noimpact89%B.Acceleratetheenergytransition4551%C.Slowdowntheenergytransitionprocess.3034%D.Unclear67%RegardingthequestionofwhetherChina's"dualcarbon"strategyandgoalsneedadjustment,Themajorityoftheexpertssurveyed(65%)suggestadheringfirmlyto"dualcarbongoals"whileadaptingimplementationstrategiesandactionplanstochangingcircumstances.Additionally,9%ofexpertsbelievethatthestrategyandgoalsshouldbeexecutedresolutely,unaffectedbytheeconomicconditions.Notably,12%oftheexpertsbelievethatgoalscouldbemoderatelyreducedtosupporteconomicdevelopment,probablyreflectingtheirconcernforeconomicgrowth.Moreover,8%(7experts)suggestthatevenmoreambitioustargetsshouldbeset.Table20SurveyresultsonviewsorrecommendationsregardingChina's"dualcarbon"strategyandgoals"WhatareyourthoughtsorsuggestionsregardingChina's'dualcarbon'strategyandgoals?A.Moderatelylowerthegoalstopromoteeconomicdevelopment.1112%B.Keepcommitmenttothegoalsbutbepreparedtomakeadaptive5865%adjustmentsintheimplementationofstrategiesandactionplans.117"WhatareyourthoughtsorsuggestionsregardingChina's'dualcarbon'strategyandgoals?C.Thestrategyandobjectivesremainsteadfast,andstrategiesand89%actionsshouldnotbeswayedbyeconomicconditionsD.Perhapswecanconsidermoreambitiousgoals78%E.Nosuggestion56%F.Otheropinion00%1186ConclusionsChina’sPresident,XiJinping,emphasisedinJuly2023thatChina'sdeterminationtoachievethegoalsofreachingacarbonpeakby2030andcarbonneutralityby2060remainssteadfast.“Butthepath,method,paceandintensitytoachievethisgoalshouldandmustbedeterminedbyourselves,andwillneverbeinfluencedbyothers,”hesaid.Emissionstargetsremainontheagenda,butpolicymakers’prioritiesshiftedamidthedomesticeconomicslowdownandescalationofgeopoliticaltension.However,theeconomicheadwindshaveresultedinanunprecedentedboomincleanenergymanufacturinganddeployment,openingupthepossibilityofamuchfasterpeakanddeclineinemissionsthanexpectedortargetedbythegovernment.TomeasureChina'sprogress,weagainbenchmarkedthecountry'semissionsandenergytrendsinkeyemittingsectorsagainsttransitionpathwaysalignedwithParisAgreementgoals,applyingthesamemethodologyusedinthelastOutlookreport.Ourassessmentfoundmultipleindicatorsthatareontrack:●Cleanenergyinvestments●Electrification●Buildingsectorcoaluse●Steelandcementoutput●Constructionmaterialssectoremissions●ElectricvehiclesalesWealsofoundthefollowingindicatorstobestillofftrackatleastuntil2022–2023:●TotalCO2emissions●Totalenergyconsumption●Industrialenergyconsumption●Transportenergyconsumption●Buildingsenergyconsumption●Investmentsincoal-basedpowercapacity●Investmentsincoal-basedindustrialcapacity,particularlyironandsteelcapacityKey2023trends:EmissionsreboundTherewasanupswinginCO2emissionsin2023duetoareboundinoilconsumptionaftertheendofzero-COVID-19,andaprecipitousdropinhydropowerduetodroughts.Allthetransitionpathwaysrequireemissionstofallfrom2020to2030,implyingapeakwellbefore2030andemissionsreductionsthereafter.Inalltransitionpathways,emissionsreductionsneedtoacceleratedramaticallyfromtheratesprojectedfor2020–2030immediatelyafter2030inordertomeettheirtemperaturetargets.Therapidincreaseintotalenergyconsumptionhasmeantthatemissionskeptincreasingdespitetheimpressiveprogresswithcleanenergyexpansionandelectrification.Rapidenergydemandgrowthwasdrivenbyapatternofeconomicgrowththatfavouredthemostenergyintensiveindustries,especiallyironandsteel,non-ferrousmetalsandchemicalsindustries,aswellasthecoal-to-chemicals119industry.Energyconsumptioninbuildingsalsoincreasedfasterthaninthetransitionpathways.Mostgrowthwasinelectricityconsumption,whichthenresultedinincreasedcoaluseinthepowersectorascleanpowergenerationadditionswereinsufficienttomeetincreaseddemand.Resolvingthisissuerequiresacombinationofincreasedenergyefficiencymeasures,ashiftinaneconomicstructureawayfromthemostenergy-intensiveindustries,oranevenlargerscaleofcleanenergyinvestmentthanprojectedinthetransitionscenarios.Oneimportantstepwouldbeprioritisingelectrificationinthoseapplicationswhereelectricitycanreplacefossilfuelsatahighratio,forexample,large-scaleheatpumpsandelectricvehicles.SurgeincleanenergypavesthewayforearlierpeakChina’sdeploymentofcleanenergytechnology,particularlysolarpowerandelectricvehicles,exceededallexpectationsin2023.Weestimatethattheaddedannualnon-fossilpowergenerationin2023willexceedtheaverageannualgrowthintotalelectricitygenerationforthefirsttime.Thismeansthatifcleanenergygrowthismaintainedandelectricityconsumptiongrowthisatorbelowhistoricalaverage,powersectoremissionswillpeakinthenextfewyears.Theboomindeploymentwasaccompaniedbygrowthincleanenergymanufacturing.TherapidgrowthmadecleanenergyandcleantechthedriverofinvestmentandGDPgrowth,forthefirsttime,cementingtheirplaceasakeypartofeconomicpolicy.TheimportancethatChinahasplacedoncleanenergymanufacturingwillbeamotivationforfastdomestictransition,andmeansthatChinahasasignificantinterestinthesuccessoftheenergytransitionintherestoftheworld.Investmentsincoal-basedcapacityyettoalignwithemissionspeakUntil2022,China’snetadditionsofthermalpowercapacity,mainlycoalandfossilgas,averagedalmost50GWperyear,oralmostonelargepowerplantperweek.Thisisamuchhigherratethaninthetransitionpathways,whichseeeithersmallnetadditionsorsignificantreductionsfrom2020to2030.Yet,2023sawasharpaccelerationinnewcapacitybeingadded.Permittingnewcoal-firedpowerplantsacceleratedfurtherin2022and2023.Announcementsofcoal-basedsteelmakingcapacitycontinuedatahighratein2023,remainingoutofstepwiththeprospectofemissionspeakingandashifttomoresteelproductionfromscrap.Therewassomeprogressinincreasinginvestmentsinelectricarccapacity,andbuddingprogresswithhydrogendirectreducediron(DRI),technologiesthatwillplayakeyroleindecarbonizedsteelmaking.CleantechnologymanufacturingboomwhileoversupplyloomsProgressincleantechmanufacturinghasbeenrapidsincethecarbonneutralityannouncementin2020,andacceleratedin2022–2023asaresultofanunprecedentedboomininvestment.Cleantechisamajoreconomicdriver,absorbinganestimated24%ofallinvestmentin2023andresponsibleforallofthenetgrowthininvestment.However,withnumerousplayersrunningintothesesectorsoversupplyloomsandresultsinutilisationratedecrease.ExpertsgrewmoreoptimisticoncarbonpeakingTogaugetheviewsandexpectationsofpractitionersinthefield,Outlook2023surveyedanexpanded120poolof89expertsrepresentingdiversespecialisationsinthefieldofclimateandenergy.Theexpertsinthisyear'ssurveyaremoreoptimisticthanthoseinterviewedlastyear,with21%ofexpertsbelievingChina’sCO2willpeakbefore2025,upfrom15%in2022’ssurvey.ThepercentageofexpertsexpectingChina’sCO2emissionstorisemorethan15%abovetheir2020beforepeakingfellfrom69%to56%.Thischangemayreflecttheexperts'increasedexpectationsforChinatoachieveitsemissionreductiongoals.MostoftheexpertsbelievethatChinaisontracktopeakitscarbonemissionsbefore2030,butachievingcarbonneutralityremainsasignificantchallenge.ThissuggeststhatalthoughChinacanachievethegoalofcarbonpeakingbefore2030,significantlyreducingcarbonemissionsremainsanextremelychallengingtask,requiringunwaveringeffortandcollectivecollaborationacrosssociety.Disappointingprogressonemissionsreportingandcontrollingnon-CO2greenhousegasesFornon-CO2greenhousegases,therewasnosubstantialprogressonoverallpolicies.Therearenoofficialquantitativetargetsorregularemissionsreportingthatwouldallowtheassessmentoftrendsorprogress.Thenationalactionplanonmethaneemissionreductionalsolacksspecificormeasurabletargets.Itiscurrentlynotspecifiedwhetherthe2060carbonneutralitytargetincludesallgreenhousegasesoronlyCO2,withofficialstatementspointingbothways.Officialmonitoringanddisclosureofgreenhousegasemissionsarelacking,withthemostrecentcompletegreenhousegasemissionsinventorypublishedfortheyear2014.TherewassomeprogressonCO2emissionsreportingonindustrialplantlevelbutnoprogressonnationalorprovinciallevel.121Appendix:HistoricaldatasourcesHistoricaldatawasobtainedfromtheChinaEnergyStatisticalYearbook2021,withdatafor2020,fromtheNationalBureauofStatistics,IEAWorldEnergyBalances2022,whichincludesofficiallyreporteddataforChina,andtheannualandmonthlyelectricitystatisticsfromtheChinaElectricityCouncil.For2022,full-yeardatawasprojectedbasedonyear-on-yearchangesinyear-to-datedatauntilSeptember.Thebreakdownofthermalpowergenerationbyfuelfor2021wastakenfromtheBPStatisticalReviewoftheWorld’sEnergyandfor2022fromtheEmberGlobalElectricityReview.Table21HistoricaldatasourcesSectorIndicatorProductDatasource2022DatasourceAllCO2AllGHGemissionsCoalCATProjectedbasedonfossilfuelconsumptionandcementproductionAllEnergyOilconsumptionNBSMonthlyapparentconsumptiondataAllGasfromWindInformationAllEnergyAllconsumptionApparentoilproductsconsumptionAllElectricityEnergybasedonrefinerythroughputdataElectricityconsumptionElectricityEnergyNBSfromNationalBureauofStatisticsofElectricityconsumptionElectricityChina(NBS)andnetexportsfromElectricityEnergyElectricityconsumptionChinaCustomsElectricityEnergyNBSMonthlyapparentconsumptiondataconsumptionfromWindinformationGHGemissionsElectricityCECCECTotalinstalledTotalprimaryNBSCalculatedbasedoncoal,oilandgascapacityenergyconsumptionandnon-fossilpowerTotalinstalledgenerationcapacityNon-fossilenergyNBSTotalinstalledNon-fossilpowergenerationreportedcapacityCO2IEAbyCECTotalinstalledcapacityChangesinthermalpowergenerationTotalinstalledfromCECcapacityTotalinstalledWindCECCECcapacityTotalinstalledSolarCECCECcapacityNuclearCECCECCoalCECCECThermalpowerCECCECGasCECCECHydropowerCECCEC122SectorIndicatorProductDatasource2022DatasourceElectricityElectricityPowergenerationWindCECCECElectricityElectricityPowergenerationSolarCECCECElectricityElectricityPowergenerationNuclearCECCECElectricityElectricityPowergenerationBiomassIEAEmberGlobalElectricityReviewElectricityElectricityPowergenerationCoalBPEmberGlobalElectricityReviewIndustryIndustryPowergenerationThermalpowerCECCECIndustryIndustryPowergenerationGasBPEmberGlobalElectricityReviewIndustryPowergenerationHydropowerCECCECIronandsteelPowergenerationNon-fossilCECCECIronandsteelIronandsteelPowergenerationTotalCECCECCementTransportEnergyCoalIEA–TransportconsumptionBuildingsOilIEA–BuildingsEnergyBuildingsconsumptionGasIEA–EnergyElectricityCEC–consumptionTotalenergyconsumptionIEA–EnergyconsumptionEnergyconsumptionEnergyCoalConsumptionofcokingcoalandconsumptionIEAconsumptionofthermalcoalbythemetallurgicalindustryfromWindInformationEnergyGasIEA–consumptionElectricityCementCECCECEnergyOilconsumptionElectricityNBSNBSCoalProductionGasIEAApparentconsumptionofoilproductsElectricityEnergyCECCECconsumptionIEA–EnergyconsumptionIEA–EnergyCECCECconsumptionEnergyconsumptionEnergyconsumption123AbbreviationsAR6:theSixthAssessmentReportBECCS:BioenergywithcarboncaptureandstorageCAEP-IAE:InstituteofAtmosphericEnvironment,ChinaAcademyofEnvironmentalPlanningCA:ClimateAnalyticsCAT:ClimateActionTrackerCCS:carboncaptureandstorageCCUS:carboncapture,utilisationandstorageCEC:ChinaElectricityCouncilCEEP-BIT:CenterforEnergyandEnvironmentalPolicyResearch,BeijingInstituteofTechnologyCHP:combinedheatandpowerCO2:carbondioxideCREA:CentreforResearchonEnergyandCleanAirEAF:electricarcfurnaceEIB:EuropeanInvestmentBankEPPEI:ChinaElectricPowerPlanningandEngineeringInstituteETHZ:ETHZürichEU:EuropeanUnionEV:electricvehicleFIT:feed-intariffFYP:China’sFive-YearPlanGDP:GrossdomesticproductGHG:greenhousegasGtce:billiontonnesofcoalequivalentHVAC:heating,ventilation,andairconditioningforbuildingsHFCs:hydrofluorocarbonsIAMs:integratedassessmentmodelsICCSD:InstituteofClimateChangeandSustainableDevelopment,TsinghuaUniversity124IEA:InternationalEnergyAgencyIMF:InternationalMonetaryFundIPCC:TheIntergovernmentalPanelonClimateChangeIIASA:InternationalInstituteforAppliedSystemsAnalysisMEE:MinistryofEcologyandEnvironmentofChinaMIIT:MinistryofIndustryandInformationTechnologyMRV:monitoring,reporting,andverificationMtce:milliontonnesofcoalequivalentNBS:NationalBureauofStatisticsofChinaNCEPU:NorthChinaElectricPowerUniversityNCGHGs:non-CO2greenhousegasesNDC:nationallydeterminedcontributionNDRC:NationalDevelopmentandReformCommissionNGFS:TheCentralBanksandSupervisorsNetworkforGreeningtheFinancialSystemNEA:NationalEnergyAdministrationofChinaNEV:newenergyvehiclesNIESR:theNationalInstituteofEconomicandSocialResearchOECD:OrganisationforEconomicCo-operationandDevelopmentPFCs:PerfluorochemicalsPIK:PotsdamInstituteforClimateImpactResearchPKU:PekingUniversitySDS:SustainableDevelopmentStrategySENR-RMU:SchoolofEnvironmentandNaturalResources,RenminUniversitytce:tonneofcoalequivalentTCEP:theTrackingCleanEnergyProgressUMD:UniversityofMarylandUN:theUnitedNationsUNFCCC:UnitedNationsFrameworkConventiononClimateChangeWEO:IEAWorldEnergyOutlook125

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