China's Shift to Renewable Energy Could Curb Emissions Sooner Than Expected

A shift in demand and significant investments in the green energy sector over the last decade could lead to a decline in China's greenhouse gas emissions starting as early as next year. China is a renewable energy powerhouse, expected to lead not just Asia but the world when it comes to green energy, metals and minerals mining, and clean tech. Thanks to years of investment and favourable government policies, China is finally reaping the rewards by becoming a global market leader and changing the face of its energy industry to eventually respond to future demand in a greener way. 

A recent report from Carbon Brief suggests that China's carbon emissions could peak this year before trending downwards starting next year. China remains the world's most polluting country, rebounding quickly to this position following three years of Covid restrictions. Nevertheless, China has invested much more heavily in green energy and clean technologies than most other countries over the last decade, shifting their emissions outlook for the coming years. The increase in China's renewable energy capacity has exceeded government targets and expectations to put it in a leading position for green energy production in the coming years. 

China's targets for solar and wind installations in 2023 were achieved by September, with 210GW of solar energy capacity added. That's twice as much as the U.S. and four times what China added in 2020. Its 2023 wind energy additions have totalled 70GW so far, and it plans to add 7GW of hydropower and 3GW of nuclear power by the end of the year. Meanwhile, its market share for electric vehicles (EVs) has overtaken the government's 2025 target of 20 percent. The acceleration of China's green energy rollout is expected to drive down demand for fossil fuels starting as early as next year. 

Lauri Myllyvirta, a lead analyst at the Centre for Research on Energy and Clean Air, said that the increase in green energy capacity could drive down emissions from "2024 because - for the first time - the rate of low-carbon energy expansion is now sufficient to not only meet but exceed the average annual increase in China's demand for electricity overall." Myllyvirta added, "If this pace is maintained, or accelerated, it would mean that China's electricity generation from fossil fuels would enter a period of structural decline - which would also be a first. Moreover, this structural decline could come about despite the new wave of coal plant permitting and construction in the country." 

China has been investing heavily in the expansion green energy industry for much longer than many other countries, even those that are pushing most aggressively for a global green transition, and this is a trend that is set to continue. In April this year, China's installed wind and solar capacity reached 820GW, contributing 31 percent of the country's total installed power generation capacity. The Asian giant has big plans to expand this capacity further as well as develop a wide range of other green energy sources and clean technologies to boost its energy security, decrease emissions and ensure its competitiveness in a range of areas. 

In April, Sinopec, China's Petroleum and Chemical Corporation, announced plans to build a pipeline to transport hydrogen from renewable energy operations in the northwest of China to cities in the east of the country. The pipeline is expected to span 400km, commencing operations with an initial capacity of 100,000 tonnes a year. While China already has pipelines transporting grey hydrogen - hydrogen derived from fossil fuels, this would be the first 'West to East' green hydrogen transmission line. Sinopec announced earlier in the year that it plans to construct a green hydrogen facility in the Inner Mongolian city of Ordos with an annual capacity of 30,000 tonnes. In 2021, Sinopec launched a green hydrogen project in Kuqa in the western Xinjiang region. These plans support government aims of producing 100,000 to 200,000 a year of green hydrogen to fuel 50,000 hydrogen fuel cell vehicles by 2025.

However, it is important not to overlook China's continuing dependence on coal. The pipeline for Chinese coal plants is significant, despite the fact that China's President Xi Jinping pledged to "strictly control new coal-fired power generation projects" in China in the 2021 to 2025 period at the Leaders' Summit on Climate in April 2021. China's coal power capacity is expected to peak at 1,370GW in 2030, marking an increase from 1,141GW in June this year, according to the State Council Development Research Center. By June, 136GW of coal capacity was already under construction, 99GW had been approved and a further 25GW has been permitted since. To achieve peak emissions and see a decline, China would have to curb its planned coal developments and shift its dependency to renewable alternatives.  

While China's continued reliance on coal could lead to rising carbon emissions, with potentially devastating effects on the environment and the health of its citizens, its ambitious renewable energy pipeline could help to shift dependency away from coal. Although the Chinese government appears steadfast in its support for new coal projects, if the growth of its renewable energy capacity continues to exceed expectations, it might reduce the need for new coal operations and lead to a structural decline in China's CO2 emissions. 

By Felicity Bradstock for Oilprice.com 

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