China's Coal Dependence to Persist Despite Global Climate Goals

Amidst global efforts to phase out coal power by 2040, China's coal consumption is unlikely to decrease significantly by that time, according to a new report by Norwegian consultancy DNV.

The report indicates that China's coal usage, currently the world's largest, will experience a minor reduction in the next two years, followed by a one-third decline by 2040. Despite a surge in renewable energy generation, coal will remain a substantial part of China's energy mix, projected to constitute 25% of its peak consumption by 2050. The country's commitment to decarbonization is challenged by its continued approval of new coal power plants and the dominance of coal consumption in sectors like iron and steel. Additionally, slow progress in decarbonizing industries like steel production further impedes China's emission reduction goals.

While natural gas will continue to play a role, particularly in sectors like manufacturing, the report suggests that China may struggle to meet its carbon neutrality target by 2060 without more aggressive decarbonization efforts. Despite forecasts indicating a peak in carbon emissions by 2026, China's total energy demand is expected to plateau by 2030 and decrease by 20% by 2050. Furthermore, the report anticipates a rapid decline in oil demand driven by electrification, with China's road sector expected to see a 94% reduction in oil consumption by 2050. However, the transition to alternative aviation fuels will be slower, with oil still accounting for a significant portion of energy demand in the sector by 2050.

Last year, China’s expanding coal fleet and a slowdown in coal plant retirements in the United States and Europe resulted in the highest net increase in global operating coal capacity since 2016, Global Energy Monitor’s annual survey showed earlier this month.

By Julianne Geiger for Oilprice.com

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