China's net zero path will face increasing challenges as a possible energy demand rebound, tensions with the US and a slower-than-expected uptake in clean energy may see it revert to fossil fuels next year.
China's 2022 CO2 emissions — accounting for a third of global emissions — are projected to fall by 0.9pc on the year to 11.4 Gigatonnes (Gt), compared with a 1.5pc rise to 5.1Gt for the US. This drop is because of a 2.8pc year-on-year decline in emissions from the oil sector, 1.1pc fall from gas and 7pc for cement, according to a forecast by Global Carbon Project (GCP). But emissions from coal is on track to rise on the year by 0.1pc.
This latest drop may not be sustainable if Beijing decides to further ease its zero-Covid policy, while there are signs that coal sector emissions may rise further next year. A decline in oil sector CO2 emissions was attributed to pandemic-led lockdowns, but the removal of pandemic controls could result in a "significant rebound", according to Helsinki-based think tank Centre for Research on Energy and Clean Air (CREA).
Hard-to-abate sectors like steel, cement, concrete and chemicals account for nearly half of CO2 emissions, but the timeline for including these in its national emissions trading scheme is uncertain. Researchers at Peking University suggest the petrochemical sector may peak CO2 emissions only in 2035 without decarbonising efforts such as carbon capture, utilisation and storage (CCUS) among other measures.
To complicate China's net-zero goals, tensions with the US appear to be rising again following a recent thaw. US secretary of state Antony Blinken is slated to discuss climate co-operation if he visits China early next year. But China has joined the EU in accusing the US of violating world trade organisation rules through its Inflation Reduction Act. A recent Pentagon report also voiced concerns about China's growing nuclear arsenal. "If China continues the pace of its nuclear expansion, it will likely field a stockpile of about 1500 warheads by its 2035 timeline", the report said. Prospects of a $425mn US arms sales to Taiwan will also add to geopolitical tensions with China.
Slow path to decarbonisation
China's hydrogen demand could grow quicker, when coupled with CCUS, according to Paris-based IEA. China is the world's largest hydrogen producer and Beijing considers hydrogen a strategic fuel. But little is currently used to decarbonise the transport sector, the IEA added.
Chinese state-owned firm Sinopec has commercially produced sustainable aviation fuel. But production cost is currently 40,000 yuan/t ($5,731/t), over five times that of domestic conventional jet fuel prices, according to a Sinopec official. China is instead making quicker inroads into new energy vehicles (NEVs), which does not yet appear to be hampered by the US' latest China technology export controls.
But a protracted war in Ukraine is driving up gas prices, and boosting coal over gas usage. Coal-to-gas conversion may slow this winter as Chinese provinces turn to coal for heating, according to an official from CNPC. Acute power shortages that gripped China last year and this year are a stark reminder that coal is here to stay. China will need more coal power to supplement intermittent renewable power. Southwest Guizhou province is seeking feedback on draft regulations requiring renewable projects to bundle with coal in a ‘renewable plus coal power' model.
China may peak carbon emissions by 2030 but depending on the level of emissions by then, reaching carbon neutrality may be a bigger challenge, the CREA said. Instead of aiming to peak CO2 emissions early or minimise the level of peak emissions, industries may "make use of the time before emissions are due to peak to develop and expand, including in ways that increase emissions", it said.
