China's Net Zero Carbon Emission Plan Aims to Limit Coal, Crude Oil, and Steel Capacity
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On May 29, 2024, China's State Council unveiled its energy conservation and carbon reduction plan for 2024-25. The plan includes restricting production capacities in sectors such as coal, crude oil, and steel to achieve its climate goals.Key Targets and Measures:
Energy Consumption and Carbon Reduction Goals:Energy Consumption: Aiming to reduce the country's energy consumption by approximately 2.5% in 2024.CO2 Emissions: Targeting a reduction in carbon dioxide emissions per unit of GDP by 3.9% for the year.Non-fossil Energy Consumption: Planning to increase the share of non-fossil energy consumption to about 18.9% in 2024 and further to 20% by 2025.
Specific Sectoral Reductions:Coal and CO2 Emissions: Efforts in key sectors and industries aim to cut standard coal usage by about 50 million tons annually and CO2 emissions by around 130 million tons by 2024-25.Steel Industry: Expected to reduce standard coal usage by 20 million tons and CO2 emissions by 53 million tons.Petrochemical Industry: Targeting a reduction of 40 million tons of standard coal and 110 million tons of CO2 emissions.Non-ferrous Metals Industry: Aiming to cut standard coal usage by 5 million tons and CO2 emissions by 13 million tons.
Fossil Fuel Consumption:Coal Consumption: Strict control and reasonable reduction of coal consumption. Plans include shutting down and integrating coal-fired boilers, and eliminating scattered coal in key air pollution prevention areas by the end of 2025. Coal-fired boilers with a capacity of 35 tons/hour or less are also targeted for elimination.Crude Oil Regulation: China plans to eliminate crude oil distillation units with a capacity of 2 million tons/year or less and maintain domestic crude processing capacity at 1 billion tons/year by the end of 2025. The country aims to accelerate the development of unconventional oil and gas resources like shale oil and gas, coalbed methane, and tight oil. It also mandates the cessation of using high-sulfur coke as fuel, except in existing petrochemical units.
Enhancing Power Transmission Capacity:China aims to surpass 62 million kW in domestic pumped storage capacity and 40 million kW in new energy storage capacity by the end of 2025.
Increasing Non-fossil Fuel Consumption:The country targets raising non-fossil fuel consumption to about 39% by the end of 2025. New high-energy-consuming projects must ensure at least 20% of their energy comes from non-fossil sources during the final two years of the 14th Five-Year Plan. All sectors are expected to obtain green electricity certificates by the end of 2024.
Metals and Steel Industry Management:China plans to enhance the management of steel capacity and output. New capacities for mechanical processing, casting, and ferroalloy production are banned. Regions lagging in energy-saving and carbon reduction goals are not permitted to add new capacities.
Electric Arc Furnace Steel Production: The proportion of steel produced via electric arc furnaces is expected to rise to 15% of total crude steel production by the end of 2025, with scrap steel usage reaching 300 million tons. Energy consumption per ton of steel is aimed to be reduced by 2% compared to 2023 levels by the end of 2025.
Cement Production: The country aims to maintain domestic cement production capacity at about 1.8 billion tons/year by the end of 2025.Transportation Sector Emissions: Targeting a 5% reduction in CO2 emission intensity from the transportation sector compared to 2020 levels by the end of 2025.China's comprehensive plan emphasizes the need to curb fossil fuel usage, enhance renewable energy adoption, and manage industrial emissions to meet its ambitious carbon neutrality goals.
On May 29, 2024, China's State Council unveiled its energy conservation and carbon reduction plan for 2024-25. The plan includes restricting production capacities in sectors such as coal, crude oil, and steel to achieve its climate goals.
Key Targets and Measures:
Energy Consumption and Carbon Reduction Goals:
Energy Consumption: Aiming to reduce the country's energy consumption by approximately 2.5% in 2024.
CO2 Emissions: Targeting a reduction in carbon dioxide emissions per unit of GDP by 3.9% for the year.
Non-fossil Energy Consumption: Planning to increase the share of non-fossil energy consumption to about 18.9% in 2024 and further to 20% by 2025.
Specific Sectoral Reductions:
Coal and CO2 Emissions: Efforts in key sectors and industries aim to cut standard coal usage by about 50 million tons annually and CO2 emissions by around 130 million tons by 2024-25.
Steel Industry: Expected to reduce standard coal usage by 20 million tons and CO2 emissions by 53 million tons.
Petrochemical Industry: Targeting a reduction of 40 million tons of standard coal and 110 million tons of CO2 emissions.
Non-ferrous Metals Industry: Aiming to cut standard coal usage by 5 million tons and CO2 emissions by 13 million tons.
Fossil Fuel Consumption:
Coal Consumption: Strict control and reasonable reduction of coal consumption. Plans include shutting down and integrating coal-fired boilers, and eliminating scattered coal in key air pollution prevention areas by the end of 2025. Coal-fired boilers with a capacity of 35 tons/hour or less are also targeted for elimination.
Crude Oil Regulation: China plans to eliminate crude oil distillation units with a capacity of 2 million tons/year or less and maintain domestic crude processing capacity at 1 billion tons/year by the end of 2025. The country aims to accelerate the development of unconventional oil and gas resources like shale oil and gas, coalbed methane, and tight oil. It also mandates the cessation of using high-sulfur coke as fuel, except in existing petrochemical units.
Enhancing Power Transmission Capacity:
China aims to surpass 62 million kW in domestic pumped storage capacity and 40 million kW in new energy storage capacity by the end of 2025.
Increasing Non-fossil Fuel Consumption:
The country targets raising non-fossil fuel consumption to about 39% by the end of 2025. New high-energy-consuming projects must ensure at least 20% of their energy comes from non-fossil sources during the final two years of the 14th Five-Year Plan. All sectors are expected to obtain green electricity certificates by the end of 2024.
Metals and Steel Industry Management:
China plans to enhance the management of steel capacity and output. New capacities for mechanical processing, casting, and ferroalloy production are banned. Regions lagging in energy-saving and carbon reduction goals are not permitted to add new capacities.
Electric Arc Furnace Steel Production: The proportion of steel produced via electric arc furnaces is expected to rise to 15% of total crude steel production by the end of 2025, with scrap steel usage reaching 300 million tons. Energy consumption per ton of steel is aimed to be reduced by 2% compared to 2023 levels by the end of 2025.
Cement Production: The country aims to maintain domestic cement production capacity at about 1.8 billion tons/year by the end of 2025.
Transportation Sector Emissions: Targeting a 5% reduction in CO2 emission intensity from the transportation sector compared to 2020 levels by the end of 2025.
China's comprehensive plan emphasizes the need to curb fossil fuel usage, enhance renewable energy adoption, and manage industrial emissions to meet its ambitious carbon neutrality goals.
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