China commits to ‘carbon neutrality’ by 2060

China has set a target to be carbon neutral by 2060, the first time the world's largest CO2 emitter has pledged such an ambitious — albeit long-term — clean energy goal.

China is aiming for its CO2 emissions to peak before 2030 and to achieve "carbon neutrality" by 2060, President Xi Jinping said in a virtual address to the UN General Assembly yesterday.

The 2030 goal was first announced in 2014 and is part of China's commitment under the 2015 Paris climate agreement. "China will scale up its intended nationally determined contributions by adopting more vigorous policies and measures," Xi said, while calling on all countries to take decisive steps to honour the accord.

But this is the first time China has pledged to reach carbon neutrality, with potentially significant long-term consequences for the country's huge oil, gas, coal and resources sectors. Details are unclear, including how China will define carbon neutrality, but Xi's statement conveys a clear direction and underlines the government's determination to decarbonise the economy. Beijing has already been moving to increase the share of cleaner energy sources, prompting the country's major energy firms to start planning for a lower carbon future.

China's state-controlled energy giants are focusing on boosting natural gas output and sales as a first step towards reducing their carbon intensity. Natural gas is targeted to reach 16pc in China's total primary energy consumption by 2035, according to state-owned think-tank the development research centre, up from around 8pc in 2019.

Energy firms are also setting out a blueprint to develop renewable fuels. State-controlled PetroChina, which is aiming to achieve near zero carbon emissions by 2050, is preparing a renewable energy plan for the 14th five-year planning period of 2021-25 that will explore opportunities in geothermal, solar, wind power and hydrogen.

Fellow state-controlled energy firm CNOOC announced plans in January to enter the domestic offshore wind farm market and started its first joint-venture wind power project with 300MW capacity this month.

China's largest oil refiner by capacity Sinopec is focusing on hydrogen development, in line with plans by the government to encourage alternatives to oil-fuelled vehicles. Beijing said this week it will reward innovations in the fuel cell electric vehicle sector in an effort to make breakthroughs in key technologies and to build a complete industry chain in four years. Sinopec produced 3mn t of hydrogen last year, or 14pc of the country's total output.

But China has a long way to go to clean up its energy sector. It has easily the world's largest coal-fired power sector, with 51.2pc of its total installed electricity capacity powered by coal compared with just 4.6pc for gas and 21.3pc for wind and solar. Around 71pc of power generation was based on coal during January-August this year.

The government is aiming for wind and solar to provide 18-20pc of total electricity demand, rather than capacity, in the 14th five-year plan, according to a source close to the process. The next five-year plan, which is likely to be finalised in October, will provide a key policy direction for the coming years.

US rivalry

The 2060 target date chosen by China is slightly later than similar targets set by the UK and EU to achieve net-zero emissions by 2050. Energy companies such as BP that have set longer term emissions targets have also focused largely on a 2050 date.

But China's commitments put it in particularly stark contrast with the US, which has announced its withdrawal from the Paris climate accord. US President Donald Trump accused China of being a major polluter in his own UN speech yesterday, noting that its emissions are twice those of the US and growing fast.

"Those who attack America's exceptional environmental record while ignoring China's rampant pollution are not interested in the environment. They only want to punish America, and I will not stand for it," Trump said.