Lv Jianzhong

 
The report to the 20th National Party Congress of the Communist Party of China (CPC) clearly stated the central task of the CPC will be to lead the Chinese people of all ethnic groups in a concerted effort to realize the Second Centenary Goal of building China into a great modern socialist country in all respects and to advance the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. Chinese modernization contains elements that are common to the modernization processes of all countries, but it is more characterized by features that are unique to the Chinese context. The essential requirements of Chinese modernization are as follows: upholding the leadership of the Communist Party of China and socialism with Chinese characteristics, pursuing high-quality development, developing whole-process people’s democracy, enriching the people’s cultural lives, achieving common prosperity for all, promoting harmony between humanity and nature, building a human community with a shared future, and creating a new form of human advancement. Among these, a special focus is given to maintaining harmony between humanity and nature when planning our development, which means that we will prioritize ecological protection, conserve resources and use them efficiently, and pursue green and low-carbon development, and work actively and prudently toward the goals of reaching peak carbon emissions and carbon neutrality, thus contributing to building a Beautiful China.  

Achieving the “carbon peak and carbon neutrality” goals (hereinafter referred to as Two-Carbon Goals) will entail deep and extensive changes to our economy and society, requiring rapid optimization in the structure of industry, energy, transportation, and so on. According to a report released by the International Energy Agency (IEA), global greenhouse gas emissions reached 40.8 billion tons of carbon dioxide equivalent in 2021, of which emissions related to energy consumption reached 36.3 billion tons (roughly 89%). China’s own statistics are a close match to these global figures. Therefore, to achieve the Two-Carbon Goals, we must accelerate our development of renewable energy, reduce our dependence on traditional fossil fuels, and press forward in transforming our energy mix. In the backdrop of comprehensively building a modern socialist country in all respects and marching towards our Second Centenary Goal, China will “Build First, Discard Second” with its current energy resources and implement step-by-step plans for carbon peak and carbon neutrality. In the process, we will strive to build a Chinese modernization in which man and nature live in harmony.
 
I.Implementing the “Two-Carbon Goals” is China’s solemn commitment to the international community amid its own stage of development
 
China is the largest developing country in the world, situated in the later stages of industrialization alongside a new-found digitization and information-based economy. At present, it stands as the world’s largest energy producer and consumer, as well as the largest carbon emitter. In recent years, the Chinese government has given great attention to ecological and environmental protection, vigorously promoted energy transition and revolution, and installed a renewable energy capacity unmatched in the world. At the 75th Session of the UN General Assembly held in September 2020, Chinese President Xi Jinping formally stated that “China will increase its National Intended Contribution to these efforts, adopting more effective policies and measures and striving to reach peak carbon emissions before 2030 and carbon neutrality before 2060.”
 
Through actively implementing this “Two-Carbon Goals” strategy, China has declared its resolve to deal with global climate change, implement international conventions, and achieve the Paris Agreement goals of limiting global warming to well below 2°C and pursuing efforts to limit it to 1.5°C. It demonstrates China’s willingness to participate in global climate governance, build a community with a shared future for mankind and a community of life for humanity and nature. These tasks are also inherently necessary in China’s achievement of high-quality and sustainable growth. In entering a new stage of development, the problems posed by energy, resources, and environment have become more pronounced. We must promote green and low-carbon socioeconomic development, accelerate structural optimizations in industry, energy, and transportation, implement a comprehensive conservation strategy, promote the economical and efficient use of various resources, advocate for green consumption, and encourage the formation of a low-carbon mode of production and way of life. In other words, China’s “Two-Carbon Goals” are a self-requirement after it enters the new development stage and a major strategic decision made by the Chinese government with thoughtful consideration.
 
The “Two-Carbon Goals” meets the needs of China’s energy security and are founded on its energy security reality. In 2021, China imported 500 million tons of crude oil and 133.3 billion cubic meters of natural gas, reflecting foreign dependency ratios of 72% and 43% respectively. Were this model to continue, by 2050, China’s consumption would exceed 800 million tons and 700 billion cubic meters and foreign dependency ratios would crest 75% and 65%, posing severe challenges to its energy security. If we are to achieve carbon neutrality, we must force a low-carbon transformation in the energy industry, replace oil and natural gas with independently-developed clean energy, solve excessive dependence on fossil energy at its roots, effectively improve China’s energy security, and provide adequate, economical, stable and reliable energy supply for economic and social development.
 
These goals match the needs of China’s own sustainable growth and are based on its fundamental resource conditions. China is rich in natural resources, ranking third in the world, yet only ranking fifty-third in regard to per capita resources. To achieve carbon neutrality, we must strengthen the effect of binding indicators such as resources and environment, take emissions reduction as a starting point, build a nationwide resource-recycling system, and encourage reduction, reuse, and recycling in each step of production, circulation, and consumption. We must also make our production and consumption models more efficient, intelligent, clean, and low-carbon, and hence achieve coordinated economic, social, and resource development.
 
These goals demonstrate China’s sense of duty as a major country in tackling global climate change. The decision to pursue these goals is based on China’s inherent requirement of realizing sustainable development and the sense of duty of building a community with a shared future for mankind. It shows China’s new efforts and contributions in addressing climate change, reflects its firm support for multilateralism, injects major impetus for the international community to fully and effectively implement the Paris Agreement, and reinvigorates confidence and hope in global climate action. The “Two-Carbon Goals” demonstrate China’s firm determination in dealing with climate change, following the path of green and low-carbon growth, and promoting the common development of humankind.
 
II.Energy transition is the inevitable route for achieving the “Two-Carbon Goals”

Achieving the “Two-Carbon Goals” is a systematic project involving the economy, energy, industry, transportation, the lives of our citizens, and much more; it simply cannot be achieved overnight. The US and the EU have promised to move from carbon peak to carbon neutrality within 43 and 71 years respectively; China, on the other hand, is promising to achieve this goal within 30 years, constituting the largest global reduction in carbon emissions in the shortest period of time in all history. Such ambition will certainly meet with severe challenges, such as transformations in development models, shifts in industrial structure, optimizations in energy, and so on. Of all these, energy transition is an inevitable choice.
 
First, energy is an important industry and core battlefield in achieving the “Two-Carbon Goals”. Anthropogenic carbon dioxide emissions are the main source of greenhouse gases, with the majority coming from fossil fuel combustion. In 2020, energy-related emissions accounted for about 87% of global carbon dioxide emissions.
 
In recent years, as China has shifted to high-quality economic development, the growth rate of energy consumption has seen a major deceleration and its energy structure has been continuously optimized. The proportion of coal in total energy consumption has dropped from 68.5% in 2012 to 56% in 2021; the proportion of renewable energy has increased from less than 9% in 2012 to more than 14% in 2021; the growth rate of carbon dioxide emissions has slowed and gradually plateaued. However, objective factors such as the structure of heavy industry and coal-fired energy as well as rigid growth in domestic energy consumption have contributed to China’s high consumption per unit of GDP, making it still one of the world’s largest energy consumers. In 2020, primary energy consumption hit 4.98 billion tons of standard coal and carbon dioxide emissions reached 9.9 billion tons, respectively constituting 26% of global energy consumption and 31% of carbon dioxide emissions. As such, energy is not only the main battlefield for implementing the “Two-Carbon Goals”, but also an important foundation for ensuring that carbon peak and carbon neutrality be achieved on schedule.
 
Second, promoting energy transition is the key to achieving these goals. Discrepancies between a nation’s resource endowment and technological strengths will determine its path toward low-carbon transformation. The paths of all nations will inevitably vary, yet exhibit an overall trend of “reducing coal, stabilizing oil, increasing gas, and actively developing renewable energy”. To achieve carbon neutrality, we must conduct rapid and deep transformation through measures as improving energy efficiency, reducing coal use, and significantly increasing the proportion of clean energy.
 
At present, China’s transformation towards a green and low-carbon energy structure faces several problems, such as a high proportion of carbon-hungry energy consumption, intense carbon emissions, the premature shelving of fossil energy assets, difficulties in the transformation of resource-based cities, the heavy burden of reemploying traditional energy personnel, and an overall lag between energy goals and feasible technology. However, the Chinese government is deeply aware that promoting such an energy transition is key to achieving the “Two-Carbon Goals”. On the one hand, traditional fossil fuels need to be made cleaner and more efficient, green and low-carbon production must be strengthened, and carbon emissions should be greatly reduced overall. On the other hand, as renewable energy such as solar and wind is not only cleaner but also not subject to regional restrictions, energy can be produced and consumed locally; this can significantly offset the risks of high overseas dependence, thus becoming a major direction for our green development.
 
China’s clean energy industry is growing rapidly, having already replaced traditional fossil fuels to a certain extent. By the end of 2021, its installed capacity of renewable energy generation had exceeded 1 billion kilowatts, and the capacity of hydropower, wind power, and photovoltaic power generation had each exceeded 300 million kilowatts. The Chinese government has clearly stated that by 2030, non-fossil energy will account for roughly 25% of primary energy consumption and its total installed capacity of wind and solar power will exceed 1.2 billion kilowatts.
 
III.We should insist on “Building First, Discarding Second” and properly coordinate energy security with the “Two-Carbon Goals”
 
China is rich in coal, poor in oil, and limited in gas. Over the years, it has promoted the revolution in energy production and consumption, implementing supply-side structural reforms and promoting the clean and efficient use of energy, in turn encouraging coordinated and all-round socioeconomic development. Practice has proved that, as the largest energy consumer in the world, China’s energy security is a broad strategic issue affecting economic and social development, being of vital importance to the prosperity of the country as well as to the improvement of living standards and long-term social stability. Because of this, in transforming our energy industry, we must adhere to a policy of “Building First, Discarding Second”.
 
In the past few decades, developed countries in the West have made great efforts to transform their energy mix in response to climate change, some “Discarding First, Building Second” and others “Building Alongside Discarding”. Europe has explicitly called for coal power’s withdrawal, proposed a timeline for phasing out fuel vehicles, and set strict limits on fossil energy projects, aiming to achieve green transformation from the origin. In 2021, non-fossil power production (e.g. nuclear, hydropower, and renewable) in Europe made up more than 60% of total electricity generation, while gas and coal accounted for about 20% and 15%, respectively. However, since the end of 2020, renewable energy generation has been unstable due to extreme weather; the Ukraine crisis of 2022 has also affected supplies of natural gas, leading to skyrocketing energy prices across the board. Europe is in the throes of an energy crisis.
 
To achieve the “Two-Carbon Goals”, some regions in China once blindly reducing and shutting down coal production and coal power projects, interrupting regular production and daily life. In response, the Chinese government promptly corrected such inappropriate measures, emphasizing that green transformation is the starting point while energy security is the bottom line. With an eye to its resource endowment, China should follow a path of “Building First, Discarding Second”, plan development in a comprehensive way, and gradually withdraw from traditional energy on a safe and reliable foundation of clean energy.
 
In terms of “Building”, we must secure our stock of energy and win back time for bringing in clean energy, and in turn smoothly transition to a low-carbon or even zero-carbon future. It is necessary that we grasp the key variables and look far ahead, fully recognize that scientific and technological innovation is the backbone for achieving our goals, as well as continuously strengthen research and development in the realm of clean energy, carbon capture, carbon storage, and efficient utilization.
 
In terms of “Discarding”, we should stay problem-oriented and recognize that we have a predominantly heavy industry, a coal-based energy structure, and a tight window of opportunity to enact change. To promote industrial transformation, be it through establishing new projects or restructuring old ones, we should strictly cap carbon emissions, encourage an orderly optimization of energy, actively build clean energy, green manufacturing, and low-carbon lifestyle systems, and fundamentally solve the problem of environmental pollution.

IV. Utilize the energy industry in building a beautiful China
 
Nature provides the basic conditions for human survival and development. Respecting, adapting to and protecting nature is essential for building China into a modern socialist country in all respects. To advance the Beautiful China Initiative, we need to carry out coordinated industrial restructuring, pollution control, ecological conservation, and climate response; and promote concerted efforts to cut carbon emissions, reduce pollution, expand green development, and purse economic growth. We will prioritize ecological protection, conserve resources and use them efficiently, and purse green and low-carbon development. The energy industry bears an important mission in ensuring energy security and achieving the “Two Carbon Goals” and needs to make greater contributions in paving the way to a beautiful China.
 
i. Accelerate structural adjustments and continue to both reduce carbon and improve production efficiency
 
We must: Strengthen our understanding of the bottom line, uphold a domestic foothold, make up for deficiencies, establish multiple safeguards, and strengthen reserves; Enhance the clean use of coal and actively promote the “Three Interlinked Reforms” of energy conservation plus carbon reduction, flexible restructuring, and heating transformation; Boost oil exploration, gas development, energy storage, and production capacity, and enhance the precise protective role of traditional energy production and supply; Speed up energy transition and actively develop wind and solar power generation; and Steadily expand clean energy sources (e.g. hydropower, nuclear power, and biomass), continue building our energy production, supply, storage and marketing systems, and hasten the construction of a new energy system.
 
In the future, China will: Optimize and stimulate large-scale development in wind and photovoltaic power in its northern, northeastern, and northwestern regions; Comprehensively expand wind, solar, and hydropower in its southwest; Focus on localized wind and photovoltaic power in its central, eastern, and southern regions; Actively promote offshore wind power clusters on its eastern coastline; Steadily push for diversified development in biomass energy; and Aim for extensive, steady growth in geothermal and marine energy.
 
At the same time, China will accelerate the construction of renewable energy storage and regulation facilities, strengthen support systems for diversified and intelligent grid infrastructure, making new power systems more adaptable to high proportions of renewable energy.
 
ii. Uphold bidirectional efforts in forming green, low-carbon modes of production and ways of life
 
China will increase the direct utilization of renewable energy at generation terminals, expand the non-electric use of renewable energy, promote far-reaching, renewable hydrogen production and the comprehensive use of renewable energy in rural areas, and take more measures to improve the amount of renewable energy utilized overall. It will support such industries as iron/steel, non-ferrous materials, and building materials, reduce and limit coal use, strictly control energy-consuming, polluting, low-output projects, upgrade energy conservation in key areas, encourage enterprises to electrify and use more green energy, and further increase the proportion of electric energy used at terminals. China will vigorously promote a low-carbon lifestyle and enhance environmental awareness across the nation.
 
iii. Spur market development and stimulate system innovation
 
During the 14th Five-Year Plan period, development in the renewable energy market will move away from subsidies and towards flat and low prices, as well as be driven by the market rather than by policy. At the same time, new renewable and raw material energy will be excluded from calculations of total energy consumption, a standardized emissions accounting system and carbon trading system will be established, and a “Double Control” mechanism transition from energy consumption toward both the amount and intensity of carbon emissions will be prompted. China will construct an energy market adapted to this transformation as well as resolutely reform the oil and gas system. Low-carbon policy systems and mechanisms for mixed energy use will be improved, source, network, load and storage will be further integrated and optimized, and policies in the way of fiscal spending, taxation, finance, environmental protection, and land will be better coordinated. We will continue to transform the energy sector according to law, accelerating the promulgation of energy law and regulation system, in which the law of energy plays the leading role, the individual laws and regulations for coal, electricity, oil/gas, and renewable energy are supportive, while the subsidiary rules are supplementary.
 
iv. Innovation-led growth and further revolution in green, low-carbon science and technology
 
We will speed up efforts in core energy technologies and equipment, promote major breakthroughs in green and low-carbon technology, speed up intelligent digitization for the whole energy industry chain, fix all shortcomings and hone all strengths, and construct preemptive advantages for supporting energy transition and revolution. We will enhance our ability for technological innovation and forge innovative energy advantages. We will continue to improve our expertise and cost-effectiveness in wind, solar, biomass, geothermal, and marine energy, research ways of optimizing key technologies in third-generation nuclear power, and strengthen technological innovation and application in high-proportion renewable energy systems. Based on the advantage of these green and low-carbon technologies, we should accelerate breakthroughs in new power systems and new nuclear energy, and improve the clean and efficient utilization of fossil energy.
 
v. Strengthen international cooperation and actively participate in global governance in response to climate change
 
In regard to cooperation, China will adhere to the principle of common but differentiated responsibilities and rely on such mechanisms as the Office for China-EU Energy Technology Innovation & Cooperation and the China-US Clean Energy Partnership Forum in forming a greater joint force in the energy field to address climate change and promote green development, putting impetus into international climate treaties like the UN Framework Convention on Climate Change and the Paris Agreement. Alongside efforts to promote our own development, we will conscientiously implement the South-South Cooperation climate policy commitments, safeguard the interests of all developing countries and further the cooperation with developing countries in the field of green energy, provide financial, technological, and capacity-building support to developing countries especially landlocked, small island, and least-developed countries, so as to improve their ability to cope with climate change in the energy sector. We will push forward the improvement of the global energy governance system, rigorously manage the “Belt and Road Initiative” energy partnership and cooperation platform and host the International Energy Reform Forum. We will boost cooperation with international organizations such as the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA), the Organization of Petroleum Exporting Countries (OPEC), the International Energy Forum (IEF), and the Clean Energy Ministerial (CEM). We will be ready to participate in energy cooperation under the multilateral framework of the United Nations, G20, APEC, BRICS, and the Shanghai Cooperation Organization (SCO).

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 Lv Jianzhong is Deputy Director of the China National Petroleum Corporation Research Center of China Top Think Tanks.