China plans to reduce CO2 emissions in key sectors by 1% compared to 2023 levels

China plans to reduce CO2 emissions in key sectors by 1% compared to 2023 levels

BEIJING, May 29 (Reuters) – Under a government plan released Wednesday, China aims to reduce carbon dioxide emissions from key industries by an amount equivalent to about 1% of total national emissions in 2023 by increasing efficiency in everything from steel production to transportation.

China, the world’s largest energy consumer and largest emitter of greenhouse gases, has also set a goal of making economic growth more energy efficient, a step in line with President Xi Jinping’s push to create “new productive forces.”

The government’s action plan predicted that in 2024, the Chinese economy would need 2.5% less energy for each unit of GDP growth. It proposed achieving this goal by pushing for specific changes in industries, including building materials and petrochemicals.

China missed its energy intensity target last year, and its desire to reduce emissions and energy consumption is often at odds with the need to boost economic growth and living standards.

Lauri Myllyvirta, senior research fellow at the Asia Society Policy Institute, said it was possible that China’s CO2 emissions would peak in 2023, reflecting stalling growth in oil demand and rising wind, solar and wind energy production. China’s official goal remains to achieve maximum CO2 emissions before 2030.

The plan reiterates the non-fossil energy target of about 20% of China’s total energy consumption in 2025, up from this year’s target of about 18.9%.

The plan said China would “strictly” control coal consumption, “reasonably” control oil consumption, and promote the use of biofuel and sustainable aviation fuel.

In the case of natural gas – which Beijing sees as a bridge to achieving its carbon neutrality goal by 2060 – the plan calls for accelerated use of resources such as shale gas and coalbed methane to boost domestic supply. It said the government would prioritize the use of gas to heat households in winter.

The plan assumes the construction of large-scale renewable energy complexes and the development of offshore wind energy, so that by 2025 non-fossil energy sources will account for approximately 39% of total electricity production, compared to 33.9% in 2020.

It also said China would increase its renewable energy curtailment cap from 5% to 10% and envisages accelerated construction of ultra-high-voltage transmission lines and grid system upgrades to address the constraints.

Curtailment refers to limiting excess renewable electricity to maintain a balance between supply and demand.

Some areas are struggling with rising curtailment rates because growth in renewable energy capacity has exceeded the ability of the distribution system and batteries to use or store that energy.

Albert Miao, head of Asia energy transition research at Macquarie, said relaxing the energy cap rule could lead to an additional 30 GW of new solar capacity.

The plan also sets a goal for China to have at least 40 GW of new types of energy storage – largely made up of batteries – by the end of 2025, a 33% increase over the previous target. As of the first quarter of 2024, China has installed 35.3 GW of new energy storage capacity.

The plan was for China to gradually lift restrictions on the purchase of new energy vehicles in all parts of the country and implement policies to support such vehicles.

Additionally, under the plan, the government would control the production of metals, including copper and aluminum, while allowing the development of the production of silicon, lithium and magnesium, elements used in semiconductors and batteries.

It said state agencies would “vigorously expand” metal recycling.

(Reporting by Ella Cao, Aizhu Chen and Colleen Howe; Editing by Andrew Heavens and Ros Russell)