After China’s new pledge everything is moving towards decarbonisation with a top-down approach – but with a big problem: they don’t know how to do it. The approaches adopted in the past cannot work anymore. Here decarbonisation is seen as a sort of Mission Impossible – although they say it is possible.
–A senior European energy expert with long experience in China
After a “seemingly very long” summer (including the 3-week-qurantine after overseas visits as part of Covid-19 prevention measures in China), the Office of Science and Innovation, Beijing can finally kick off an intensive and dynamic fall of 2021. What we can clearly see and simply say, is that it will be all about “dual-carbon agenda” (the new Chinese expression for China’s 30-60 climate goals) and “biodiversity” in the months to come…
With pleasure, we started off with our (new) thinking on China’s dual-carbon agenda, as part of a seminar with our colleagues in Stockholm, Tokyo and Seoul on the “Development and Transformation of the Energy System in China, Japan and South Korea ”. Here are a few highlights from the seminar (The English version of the presentation is attached in the end of this blog).
The new context…
For the “dual-carbon agenda”, the 14th-Five Year Plan period (2021- 2025) will be a critical starting and pivoting point – at which fundamentally new thinking and new approaches need to kick in as basis for a higher likelihood of earlier peaking. Here is our understanding of the new contexts for this kick-start.
Different challenges and new opportunities…
When looking at China’s “dual-carbon agenda”, both from a Chinese and an international perspective, we do see many similarities with the rest of world, in terms of both technical choices and priorities. However, given the differences both in scale and in institutional and market conditions, China does face different challenges – which could turn to be new opportunities, if managed smartly and swiftly. Here are a few examples:
Yes, as we often hear, electrification is the way forward for decarbonisation, both in China and globally. Nevertheless, for China’s electronification it, at least, implies triple challenges and triple opportunities – at the same time:
- Electrification – large increase in generation.
- Decarbonization of electrification – large-scale and fast market uptake, not least the transport sector.
- Phase-in of decarbonised/renewable gas, for instance, bio-gas and green hydrogen.
Yes, as we have noticed, energy storage will need to play a key role in China’s “duel carbon agenda” and EU:s new “fit-for-55” ambition. For both China and EU, energy storage could be a common system bottleneck for large-scale penetration of renewables in the energy system, in transport and in the building sector. At the same time, we do see that a rapid development of innovative applications as well as regulatory measures are under way in China as smart, flexible and cost-effective are becoming the new guiding principles for the ongoing transformation of the energy system towards carbon neutrality.
Yes, just (very) limited progress in CCUS have been made in China, as elsewhere in the world – even though we also see that carbon-neutrality cannot be achieved, on time without a more rapid market uptake of CCUS/CCS. But we do see new interests not only from the energy sector, but also from industries such as steel, chemicals and cement as result of the launch of China’s ETS. On the financing side, CCUS, for the first time was included in China’s “Projects Directory Supported by Green Bonds”.
The new narrative and the new growth story…
Looking back, China has been on track for a CO2– GDP “de-coupling” for the past 8 years (See Figure below). As a leading climate expert put it, earlier carbon-peaking and faster carbon-neutrality pathways will also pave the way of China’s new growth story. From both the policy community and the business sector, we see that there is a stronger and stronger buy-in and belief in this new growth story. Interestingly and importantly, there is an increased focus on the link between the peaking year, peaking emission level and the underlying economic structure, life quality as well as innovation capacity – which is the essence of the new growth story.
Having this new growth story in mind, China’s decarbonisation needs to be a Mission Possible, for China’s best and for everyone’s best. This is not a citation from an energy expert in China or in Europe. This is our observation and our conviction when watching the debates and actions moving ahead, with these new challenges – and new opportunities…
Nannan Lundin, Matilde Eng and Linnea Yang
PS: China does not take a summer vacation. In our newsletter on Science, Innovation and Sustainability for July – August, you will see how much has happened…
 Our blog on Biodiversity and COP 15 on our way to Kunming will be out on 4 October.