China Briefing 8 February: Xi’s ‘green’ call; Renewables to top coal; No new EU solar support

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Welcome to Carbon Brief’s China Briefing.

Carbon Brief handpicks and explains the most important climate and energy stories from China over the past fortnight. Subscribe for free here.

No new EU support for local solar manufacturers

AFFORDABILITY VS SECURITY: Despite calls from the EU solar industry to instigate “emergency measures to combat a surge in cheap imports from China”, the European Commission said that the use of trade measures must be “weighed against” the bloc’s need for affordable solar panels to achieve its low-carbon transition, according to the Hong Kong-based South China Morning Post (SCMP). EU financial services commissioner Mairead McGuinness “offered no new support”, Reuters reported, instead pointing to existing EU measures and the newly-agreed Net Zero Industry Act, which “aims to fast-track permits for local manufacturing and to give products made in the EU, such as panels, an advantage in future clean tech tenders”. 

CONFLICTING VIEWS: Reuters also underscored that that industry voices were “divided over the solution” – while solar manufacturers “crushed by cheaper imports and oversupply” were calling for more protection, other “green energy” industry representatives “noted that solar panel prices have climbed in the US” in response to duties on solar panels from south-east Asian nations, creating an “inflationary impact”. In its reporting, Politico added that “at a December meeting of EU ministers on solar manufacturing, five out of seven countries appeared resistant to any trade defence measures”, adding that the opinion was not universal, according to an anonymous source.

CHINA’S CRITICISM: Articles and commentaries criticising western reactions to China’s solar exports and extolling the benefits of China’s clean-energy exports have recently appeared in Chinese media. One China Daily article said that Chinese EVs are “popular in overseas markets”, while an editorial in the state-run newspaper argued that “emergency support measures” for Europe’s solar panel manufacturing industry would “create a ‘lose-lose situation’ and…leave the realisation of the bloc’s climate goals in question”. China Energy News reported that “European manufacturers do not have a clear technological advantage [over China]”, making Chinese manufacturing important to maintaining supply. 

Renewables energy capacity could surpass coal in 2024

SET TO OVERTAKE: According to a forecast by the China Electricity Council, China’s installed wind and solar capacity will “overtake” coal for the first time this year, making up around 40% of installed power generation capacity against 37% of coal, Reuters reported. By 2024, China will build about 1,300 gigawatts (GW) of wind and solar capacity, exceeding its official target of 1,200GW by 2030, it added. The body “did not give a forecasted breakdown for actual power generation, which is still dominated by coal [at] nearly 60% of electricity consumed last year”, the outlet noted.

SOLAR STAR: China installed 217GW of new solar capacity in 2023, the country’s national energy administration (NEA) announced, “blowing away” the previous record of 88GW in 2022 and exceeding – in one year – the total amount of solar capacity built in any other nation, Bloomberg reported. According to the NEA, China also “almost quadrupled” its new energy storage capacity such as batteries to 31GW, SCMP reported. The paper – citing an analysis by the Centre for Research on Energy and Clean Air’s Lauri Myllyvirta for Carbon Brief – said the “boom” in storage came as China made a “major pivot” in its macroeconomic strategy, with the country’s previous key economic drivers, such as the real estate sector, losing steam. 

FOSSIL FALL: Profits fell 25% year-on-year in China’s coal mining sector, driven by falling coal prices, but climbed 72% for power firms, reported China Energy Net. Meanwhile, China discovered 107m tonnes of crude oil in Henan province, “equivalent” to more than half of the nation’s production in 2023, which comes at a time when authorities are making efforts to “enhance energy security and rely less on oil imports”, SCMP reported. China Electricity News published a comment by Li Chuangjun, director of the new energy and renewable energy department of the NEA. Li wrote that, in the year ahead, renewable energy will “continue to develop at a high speed”, although this would be in accordance with “promoting stability alongside progress and establishing before breaking”. 

Xi urges greater ‘green’ growth

GREEN UNDERTONES: In a meeting of China’s central committee – consisting of the country’s most senior officials – at the end of January, President Xi Jinping called for continued emphasis on “green” development, saying that “green” is the “underlying colour of high-quality development”, BJX News reported. China must “unswervingly take the road of prioritising the environment”, the energy news outlet quoted him as saying. Shanghai-based newspaper the Paper added that Xi also called for China to “accelerate green science and technology innovation…strengthen the green manufacturing industry, develop the green services industry, grow the [new] energy industry [and] develop green and low-carbon industries”.

EYES ON SHENZHEN: China’s state news agency Xinhua News recently published a special feature naming Xi as a “leader in cultural heritage and innovation”, adding that “under his leadership, China’s ecological environmental protection has undergone historic, transformative and comprehensive changes, with bluer skies, greener mountains and clearer water”. Examples of Xi’s leadership mentioned in the article included innovations in the city of Shenzhen – “from electric cars to new drones, from low-carbon pilots to smart cities”. Shenzhen, for its part, has recently announced that it will “double down on efforts to shore up” its advanced manufacturing industry, planning to see industrial output exceed 1.5tn yuan ($209bn) in new [low-carbon] energy and other strategic emerging industries in 2024, according to SCMP.

Carbon emissions trading regulations published

FULL TEXT: China has released the full text of new regulations to govern its mandatory national carbon emissions trading scheme (ETS), China Daily announced. The regulations “focus on the allocation of responsibilities, designating the state council’s ecological and environmental department to oversee and manage carbon emissions trading” and “specify details including the products eligible for trading, trading methods and the distribution of carbon emissions quotas”, the state-run newspaper explained.

INSTITUTIONAL GUARANTEE: Securities Times said that the new regulations grant the ministry of ecology and environment (MEE) “greater authority to regulate non-compliance in activities such as carbon market compliance, data reporting and verification”. An article by Zhu Xue, professor at Renmin University, and posted on the official MEE website, argued that the law “ensures that carbon emission trading activities have a legal basis” and “also provides an important institutional guarantee [from the Chinese government]…to actively and steadily progress towards carbon peaking and carbon neutrality”.

GREEN CERTIFICATES: China also issued a directive to strengthen the integration of “green electricity certificates (GECs) and energy-saving and carbon reduction policies” to “vigorously promote” the consumption of non-fossil energy, reported BJX News. The policy proposes “incorporating…traded volumes of GECs into evaluation of provincial governments’ energy-saving targets”, it said. Securities Times said that China will define “functional boundaries and articulation between the GECs, the ETS and the voluntary greenhouse gas emission reduction mechanism [CCERs]”. In a LinkedIn article, Shanghai-based David Fishman, senior manager at consultancy the Lantau Group, said that the directive could lead to China “making renewable energy consumption [or purchase of equivalent GECs] mandatory” for energy-intensive companies for the first time. To date, only grid firms and power retailers have had mandatory quotas – effectively renewable portfolio standards – he said.

China’s environment minister outlines goals for 2024

On 23 January, China’s ecology and environment minister Huang Runqiu outlined his department’s achievements in 2023 and priorities for 2024, in a 20,000 character-long (or approximately 14,000 word-long) speech. In this issue, Carbon Brief translates some of his key talking points.

The speech was delivered at the ministry of ecology and environment (MEE) annual “work conference” – a meeting that looks at progress to date and priorities for the year ahead.

Huang’s speech reflects on remarks made by President Xi Jinping at a major conference in July 2023, where he underscored the importance of “building a beautiful China”. It also outlines eight priorities that Huang’s department will pursue this year.

China’s approach to environmental protection in 2024

On building an ‘ecological civilisation’: “2023 was…a milestone year in the field of ecological environment…[President Xi Jinping] delivered an important speech…which provides an action plan and scientific guidance for us to continue to promote the construction of ecological civilisation in a new era.”  

On challenges to China’s emissions-cutting efforts: “China’s industrial structure is still characterised by high energy consumption and high carbon emissions, coal consumption remains high, freight remains mainly powered by heavy goods vehicles [and] this year the economy will continue to rebound. Therefore, the pressure on emissions reduction efforts is not insignificant.” 

On loss of ecosystems and pollution incidents: “The overall quality of the ecosystem remains low and important ecological spaces continue to be crowded out. Prolonged periods of heavily-polluted weather occur occasionally, and ecological and environmental incidents are still frequent and high-risk. There are nearly 10,000 tailing ponds across the country, and historical stockpiles of solid waste total tens of billions of tonnes.” 

On the need for more regulation: “There are shortcomings in ecological and environmental science and technology support, insufficient use of market-oriented methods of environmental management [and] lags in construction of ecological and environmental infrastructure…In some places, ecological and environmental supervision is either superficial or has not been established.” 

On timelines for near-term progress: “By 2027, green and low-carbon development will be promoted in depth, total emissions of major pollutants will be continuously reduced, the quality of the ecological environment will be increased…and China’s ecological security will be effectively guaranteed.” [The 2027 deadline is also a key target in recent opinions issued by China’s leadership to meet environmental protection goals under the ‘beautiful China initiative’.]

On developing ‘green’ steel: “[In 2023] a total of 420m tonnes of crude steel production capacity saw a whole-process ultra-low emission transformation.”

On China’s national carbon market: “The MEE promoted the successful conclusion of the second compliance cycle of the national carbon emissions trading scheme (ETS), which included 2,257 key emissions units in the power industry, covering more than 5bn tonnes of carbon dioxide (CO2) emissions annually.”

On ‘politicisation’ of climate cooperation: “Global ecological and environmental issues are increasingly politicised, with some western countries playing the climate card to introduce carbon tariffs and other policies.” 

Key tasks for 2024

On promoting pilot zones for a ‘beautiful China’: “China will implement the opinions on comprehensively promoting the construction of a beautiful China…and construct beautiful China pioneer [pilot] zones.” 

On maintaining the fight against pollution: “The MEE will implement the action plan for continuous improvement of air quality…and promote the ultra-low emission transformation of the iron and steel, cement and coking industries.”

On promoting ‘green, low-carbon and high-quality’ development: “The MEE will…support high-quality development policies and measures for economic recovery and strengthen the environmental assessment services for major investment projects…prepare guidance on strengthening construction of the ETS, gradually expanding the coverage of industries…finalise a national greenhouse gas emissions factor database…study the EU’s carbon border adjustment mechanism…[and] promote implementation of the methane emission control action plan.”

On increasing supervision of ecological protection and restoration: “China will fully implement the Kunming-Montreal Global Biodiversity Framework [and] further promote China’s biodiversity conservation strategy and action plan (2023-30).”

On ensuring nuclear and radiation safety: “The MEE will continue to improve nuclear safety supervision systems and…strengthen capacity for forward-looking research and judgement.”

On strengthening ecological environment inspection, law enforcement and risk prevention: “The MEE will implement the third round of central ecological environmental protection inspections.”

On promoting ecological environment innovation: “The MEE will issue guidance on strengthening scientific and technological innovation in the field of ecology and environment to promote the construction of a beautiful China.”

On environmental governance and COP29: “The MEE will continue deepening reform of vertical [policy] management systems…and accelerate construction of a credit system to supervise environmental protection…[The MEE will] cooperate on environment and climate change with key countries…to promote positive outcomes at COP29.”  

GREEN INDUSTRY: The Institute for Global Decarbonisation Progress published an analysis of recently published “steady growth action plans” that outline China’s aims for developing 10 key sectors, identifying the “green and low-carbon initiatives” in each of them.

SOLAR HISTORY: BJX News summarised the history of China’s supportive subsidies for the solar industry, tracking government policy from 2008 to the present day.

COLLATERAL: In an article for the Conversation, Oxford University’s Prof Nikita Sud said China’s investment in clean-energy in Indonesia is “reinforcing entrenched inequalities and hierarchies”, as development of a new solar panel factory could displace the location’s 7,500 residents.

GRASSROOTS ADAPTATION: China Dialogue covered a study which found that “climate change risks are being…adapted to at the grassroots level in southern China” and urges policymakers to “identify vulnerable populations” and understand their needs.

Increasing occurrence of sudden turns from drought to flood over China
Journal of Geophysical Research Atmospheres

The number of “sudden turn from drought to flood” (STDF) events in China increased by 2.8 events per decade over 1961-2020, according to new research. The authors investigated the long-term trends and variability of STDFs in China over 1961-2020. They found that STDFs are prevalent in north and north-east China and the Yangtze River delta. “The probability of a drought being followed by a severe flood is approaching 35% in northern and north-eastern China,” they added. The increase has mainly occurred in late spring and early summer, and is mainly due to “increasing flood frequency and volatility of precipitation”, the paper found.

Faking for fortune: Emissions trading schemes and corporate greenwashing in China
Energy Economics

A new study has found that China’s national carbon emissions trading scheme (ETS) currently acts as a “catalyst for corporate greenwashing” because it intensifies financial pressures on said companies. The study also found that “greenwashing behaviour” induced by the ETS is more apparent where “market competition is higher, firms are smaller, R&D investment is lower or intensity of environmental regulation is lower”. 

Does China’s outward foreign direct investment alleviate energy poverty in host countries? Evidence from countries along the belt and road initiative
Renewable Energy

Researchers looked at 80 countries involved in China’s “belt and road initiative” (BRI) between 2006 and 2018 to evaluate their changing trends of energy poverty. The study found that although countries in sub-Saharan Africa, south Asia and west Asia still face severe energy poverty, it has nevertheless steadily declined during this period. China’s foreign direct investment – and its wider effects – can “alleviate local energy poverty by enhancing energy accessibility, improving energy infrastructure and increasing energy supply levels”, the authors said.

China Briefing is compiled by Anika Patel and edited by Wanyuan Song and Simon Evans. Please send tips and feedback to [email protected]

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