Beijing is leading the world in clean energy investment, but insists on dealing with climate action on its own terms
China, the world's leading greenhouse gas emitter, may set more ambitious climate goals post 2030. But it will struggle to align itself closer to a 1.5°C global warming threshold at the UN Cop 29 climate conference while fending off trade barriers.
Chinese president Xi Jinping stressed earlier this year that "it is imperative to properly handle the relationship between new energy and traditional energy". Beijing remains ambiguous as to whether its CO2 emissions have peaked, as coal remains integral in its energy mix. But the peak is likely to arrive some years ahead of its 2030 target, according to China's new climate envoy Liu Zhenmin, given the country's industrial push towards clean energy.
"If we want to achieve global carbon [neutrality], first we have to address the issue of technology… provide the world with more affordable, secure technology. Second, we need to address financing," Liu said, urging for an agreement on finance for developing countries at Cop 29 in November. But the country does not want to be dragged into contributing to the new goal despite calls from developed countries for China to do so.
The country deals with climate action on its own terms. It opted out of a pledge to treble renewables capacity and double energy efficiency at last year's Cop, but the language appeared in the final text agreed by all parties. China's current nationally determined contribution (NDC) targets a CO2 emissions peak but lacks targets for non-CO2 gases such as methane, which would be crucial to meet its 2060 carbon neutrality goal. Most of its methane emissions are found in coal mines.
China is due to update its NDC by February. The country needs to raise its ambitions and cut CO2 emissions by at least 30pc from 2023 levels by 2035 and set absolute reduction targets to meet the 1.5°C Paris Agreement target, according to a report by the Centre for Research on Energy and Clean Air. It also said new energy vehicles (NEVs) — battery electric vehicles (EVs), plug-in hybrids and fuel-cell vehicles — need to reach 60pc of total sales, from 50pc currently, to drive transport sector emissions down to 2020 levels by 2035.
China might see 100mn NEVs on its roads by 2030. It had nearly 25mn NEVs by June. Its renewable power capacity has already surpassed a 1,200GW target for 2030, hitting 1,206GW in July. This allowed Beijing to cut approvals for new coal-fired power plants by almost 80pc on the year in January-June, according to data from environmental group Greenpeace. But China continues to develop new coal output capacity.
Chinese power demand could rise by more than 500 TWh/yr in the coming 5-10 years. Beijing might meet this demand with more renewables and nuclear power, although the latter accounted for just 5pc of the electricity mix last year.
Trumped by tariffs?
China appeared recently to have narrowed its climate policy differences with the US in terms of approach and objectives. It played a role with the US in bringing a consensus around fossil fuels language. But it is bracing for a showdown on climate finance, and might face huge new tariffs from the US if Republican presidential candidate Donald Trump wins the US election in November.
China and advanced economies accounted for 90pc of global wind and solar capacity additions, and more than 95pc of EV sales in 2023, the IEA said. And Chinese EVs are likely to continue making inroads into the EU despite a vote to raise tariffs this month. Consultancy Rhodium reckons tariffs have to be 40-50pc to deter Chinese EV imports. Western countries' decoupling from Chinese products could add $6 trillion to global energy transition costs, warned Liu, as he sought to justify China's industrial policy, a stance he is likely to take at Cop 29.
