China's State Council released its plan for energy conservation and carbon reduction over 2024-25 on 29 May, by curbing production capacity in sectors such as coal, crude and steel.
It plans to cut the country's energy consumption by about 2.5pc and carbon dioxide (CO2) emissions per unit of gross domestic product (GDP) by 3.9pc this year. The authority also expects the proportion of non-fossil energy consumption to rise to about 18.9pc in 2024 and further to about 20pc in 2025.
The State Council expects conservation and carbon reduction efforts in key areas and industries to cut the use of about 50mn t/yr of standard coal and cut CO2 emissions by about 130mn t/yr in 2024-25, without indicating the baseline year.
Decarbonisation efforts will reduce standard coal use by about 20mn t and CO2 emissions by about 53mn t in the steel industry over 2024-25, by about 40mn t and 110mn t respectively in the petrochemical industry and by about 5mn t and 13mn t in the nonferrous metals sector.
Fossil fuels
The country outlined three key tasks, the first of which is to cut fossil energy consumption. This would involve the "strict and reasonable" control of coal consumption, while promoting the shutdown and integration of coal-fired boilers. The country wants to eliminate so-called "scattered coal" in plains areas, which are key areas for air pollution prevention and control, by the end of 2025, with coal-fired boilers of 35t of steam/hr or less to also be eliminated.
China also plans to regulate oil consumption. It will scrap crude distillation units with a capacity of 2mn t/yr (40,000 b/d) or below and keep domestic crude processing capacity within 1bn t/yr (20mn b/d) by the end of 2025. But China also aims to accelerate the large-scale development of unconventional oil and gas resources such as shale oil and gas, coal-bed methane and "tight oil", which is light crude contained in unconventional oil-bearing formations. The State Council is also mandating that high-sulphur petroleum coke shall not be used as fuel, except in existing units at petrochemical firms.
The second key task is to raise power transmission capacity, with China envisioning domestic installed capacity of pumped storage and new energy storage to exceed 62mn kW and 40mn kW respectively by the end of 2025.
The last key task is to raise non-fossil fuel consumption to about a 39pc share by the end of 2025. The proportion of non-fossil energy consumption in new high energy-consuming projects in the last two years of the country's 14th five-year plan must be at least 20pc. The country aims to have green electricity certificates issued cover all areas by the end of 2024.
Metals
China plans to strengthen regulation of steel output capacity and production. It will prohibit the addition of capacity for mechanical processing, casting, ferro-alloys, among others. Regions that are lagging in their energy saving and carbon reduction targets also should not add new capacity.
China expects the proportion of steel produced using electric arc furnaces to rise to 15pc of total crude steel output by the end of 2025, with scrap utilisation to hit 300mn t. It also aims to have energy consumption per tonne of steel drop by 2pc from 2023 levels by the end of 2025.
The country aims to keep domestic cement clinker production capacity at around 1.8bn t/yr by the end of 2025. It also expects the intensity of CO2 emissions in the transportation sector to fall by 5pc from 2020 levels by the end of 2025.
