Commentary: China still the world’s largest emitter, but also a rising force in climate diplomacy

TRANSPORT

In 2023, global sales of electric vehicles will exceed 13 million. China has the largest domestic market for electric vehicles, selling more than seven million units, accounting for a third of car sales.

In addition, China exported 1.2 million electric vehicles in 2023. This was 80% more than in the previous year.

Electric vehicles are already cheaper than combustion-engine cars in China because they have such a large market share. Local carmakers already offer almost 50 different small, inexpensive electric models.

STEEL

In April, China announced it was preparing to expand emissions trading to the steel industry, which is the country’s second-largest CO2 emitter after power.

Emissions trading is a market-based approach to controlling pollution. The government allocates permits that allow a certain amount of CO2 to be released over a certain period of time. These permits can be bought, sold, or traded.

China accounts for more than half of global steel production. But the industry is also supporting the energy transition, as steel is used in renewable energy and electric vehicles. Nearly 70 percent of the world’s key wind turbine components and 80 percent of solar panel components are made in China.

The government is encouraging industry to work with universities and research institutes to reduce emissions. It won’t be easy and it will be expensive.

China is the world’s largest hydrogen producer, but 80 percent comes from fossil fuels. Investment in green hydrogen R&D is growing, and some companies are determined to take the lead. If steel production could be powered by green hydrogen, it would be a major breakthrough.