Energy Insider: China Leads Global Renewables Race, Provinces’ Hunger for Overseas Coal Surges
By You Xiaoying
In this week’s Caixin energy wrap, we analyze China’s biggest climate and energy news on policy, industry, projects and more:
• China’s renewable installations soar
• Coal imports increase
• Roadmap for managing products’ carbon footprints
• CCER to offer “enormous” opportunities
• All regions have set their carbon-peaking plans
In focus: China leads global renewables race
What’s new: China is leading the global renewable energy race as it is expected to install a record-breaking 230 gigawatts (GW) of wind and solar capacity this year, according to consultancy Wood Mackenzie.
The figure is double Europe’s 75GW and the U.S.’ 40GW combined, the company said in a new report. It predicted the investment for Chinese wind and solar projects to reach $140 billion in 2023.
A separate report published this week also highlighted China’s position as the “world’s leader” in renewable power installations. The Centre for Research on Energy and Clean Air (CREA), a Helsinki-based think tank, projected China’s newly installed renewable energy capacity to hit “a new record” this year.
The report estimated that over 200GW of solar power capacity would be added this year, more than double the previous record of 87GW in 2022.
Why it matters: Sultan Al Jaber, the president of COP28, has urged governments to agree on a global goal of tripling renewable capacity by 2030. This means that the total capacity will need to reach 11,000GW over the next seven years, from 3,382GW installed as of the end of 2022.
China’s rapid renewable development has put the country far ahead of its official target of having more than 1,200GW of wind and solar capacity installed cumulatively by 2030. According to CREA, the country’s current trajectory could see its cumulative wind and solar capacity reach 1,400GW in 2025.
Solar accounted for 57% of China’s newly installed power generating capacity in the first 10 months of 2023, state broadcaster CCTV reported on Nov. 23, citing the National Energy Administration.
Industry: Coal imports to hit 450 million tons in 2023
What’s new: China’s coal imports have surged this year, helping it ease tight local supply, reported China Economic Times on Nov. 28.
The country is expected to buy 450 million tons of the fuel this year, Zhang Hong, a senior member of the China National Coal Association, told the newspaper. Zhang said that increased imports had helped satisfy domestic demand for coal “to a certain degree.”
China imported 380 million tons of coal in the first 10 months, up 66.8% year-on-year, according to data released by the National Bureau of Statistics on Nov. 15.
Domestic coal production has also been growing, albeit at a much slower pace.
Chinese companies mined 3.83 billion tons of coal in the first 10 months, a 3.1% year-on-year increase, the data showed.
Why it matters: Although China has witnessed a rapid expansion of renewable energy, it still views coal as a “ballast stone” of its energy system.
China’s more developed eastern and southern provinces are the main importers as they are far from the country’s northern coal hubs, reported sxcoal.com, an industry outlet. Fujian and Guangdong were the biggest buyers of overseas coal in October, the website said. But it also noted that the growth rate of coal imports had slowed over the past few months.
Policy: Beijing to step up managing products’ carbon footprints
What’s new: Beijing has set a plan to establish a system to manage the carbon footprints of products.
By 2025, around 50 products will have rules and standards for calculating and verifying their carbon footprints, according to a policy guidance published on Nov. 22 by five central-level agencies, including the National Development and Reform Commission (NDRC). By 2030, around 200 products will be covered by the system.
The move could fast-track industrial transition, cultivate green consumer behaviour and address international “trade barriers,” the NDRC said in an online Q&A.
Why it matters: A product’s carbon footprint refers to the total amount of carbon dioxide emitted during its production process, the NDRC said. This includes upstream emissions, such as the production and transportation of its raw materials, to downstream emissions such as transport and sale, the commission said.
China has published industrial standards for companies to calculate emissions on a corporate level — one of two ways to manage the information of carbon emissions, Ma Jun, director of the Institute of Public & Environmental Affairs, told the National Business Daily.
However, the country has been “relatively slow” in managing the carbon footprints of products, Ma noted. The recent opinions filled that vacuum, he added.
Market: Carbon credits program to bring ‘enormous’ opportunities
What’s new: China’s voluntary carbon credits program, the China Certified Emission Reductions (CCER), will create “enormous green market opportunities,” Mei Dewen, vice-chairman of China Beijing Green Exchange (CBGE), said at an industry forum on Nov. 24.
Mei said CBGE is “making every effort to build a more effective, liquid and stable global voluntary carbon market,” China News reported.
CBGE is in charge of providing trading and settlement services for China’s voluntary carbon market. It published detailed rules on Nov. 16. The following week, the State Council said it supports the exchange in developing a national voluntary carbon trading center.
Why it matters: The CCER is expected to be relaunched by the end of 2023 after being shelved more than six years ago due to regulatory issues and a lack of uptake. It will complement the national Emissions Trading Scheme (ETS), which requires certain companies to account for their carbon emissions.
Song Yutong, a carbon analyst at Refinitiv, previously told Caixin that the relaunch of the CCER could indirectly bring more participants to the ETS because companies covered by the scheme can use credits purchased through the CCER to offset up to 5% of their annual emissions.
Policy: All regional carbon-peaking plans are released
What’s new: All 31 provincial-level regions and five cities under separate state planning on the Chinese mainland have published plans to peak their carbon emissions, state newspaper Economics Times reported on Nov. 27.
The news comes after Shenzhen, one of the five cities with a special planning status, released its plan in October. The central government in October 2021 ordered all regions to devise such roadmaps as part of a broader carbon-peaking action plan.
Different regions have set varying timelines according to their “resource endowment” and economic development, Jiang Qingzhe, dean of the China International Carbon-Neutrality Economic Research Institute, told the Economic Times. More affluent areas, such as Shanghai and Beijing, have set stricter timelines, while the goals for less developed regions are more relaxed, Jiang said.
Why it matters: China has a target to peak carbon emissions by 2030. But recent analyses have suggested the country could hit its target before 2025.
CREA predicted that China will see “structural decline” in its carbon emissions from next year due to record growth in clean energy installation. The International Energy Agency projected China’s carbon emissions will peak around 2025.
China is aiming to go carbon neutral by 2060.
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