This is how China’s biggest polluter plans to be greener by 2025

Photographer: Qilai Shen / Bloomberg

China’s journey towards carbon neutrality took its first major step on Friday, when the country announced targets to reduce emissions over the next five years.

The country plans to reduce carbon emissions per unit of gross domestic product by 18% by 2025 and energy use per unit of GDP by 13.5%, said Prime Minister Li Keqiang at the opening of the National People’s Congress. It also plans to increase non-fossil fuels to 20% of energy use by then, and will create an action plan this year to detail how it plans to peak emissions by 2030.

Renewable energies on the rise

China is increasing the share of its energy it obtains from carbon-free sources

Source: National Bureau of Statistics

At the same time, China plans to continue increasing domestic production of fossil fuels like coal and oil to improve energy security, a key concern for the world’s largest importer of raw materials. And it plans to continue developing nuclear power after failing to meet the sector’s goals for the past five years.

Li’s speech and the country’s 14th 5-year plan, covering 2021 to 2025, represent Beijing’s first strategic plan since September, when Xi Jinping set a zero net emissions target by 2060.

Read about China setting a conservative growth target here.

See how this could impact some important energy and climate sectors:

Energy efficiency

China began to industrialize its economy more than a century after countries like the United States and the United Kingdom, so its energy consumption is still growing strongly as others peaked or stabilized. Beijing did not want to slow growth by limiting energy use, so it focused on using it more efficiently.

Greenhouse Gas Goliath

China was responsible for more than 30% of global carbon emissions last year

Source: Robbie Andrew and Global Carbon Project

The new goal of reducing energy use per unit of GDP by 13.5% is slightly lower than the 15% target that the country set in its last five-year plan. China has exceeded this target, reducing energy intensity by about 18% in the 2016-2020 period. State Grid Corp. of China, the country’s public service giant, earlier this week it signaled a greater focus on energy efficiency and demand-side reforms over the next five years, saying they represent a cheaper solution than adding new energy supplies.

Carbon emissions

Much like energy use, China’s approach to emissions has been to reduce the intensity instead of setting a general target. The 18% reduction target in the next five years is the same level that it aimed for and successfully achieved in the last plan.

Losing intensity

China wants to continue emitting less carbon per unit of GDP it produces

Source: International Energy Agency

Still, as GDP continues to rise, emissions have also increased, and China dumped 9.8 billion tonnes of carbon in 2019, almost 29% of the world total, according to data from BP Plc. Climate experts say the China needs to set an absolute limit, with the Energy and Clean Air Research Center saying it needs to be 8.75 billion tonnes by 2025 to meet the linear path towards the 2060 carbon neutral target.

Coal

Coal is the most polluting fossil fuel, and China extracts and burns half of the world’s supply. In recent years, Beijing has managed to reduce the share of coal in its energy matrix, but this has happened as total energy consumption has increased, meaning that the amount of coal burned has not changed much since the beginning of the 2010s.

Reducing Coal Dependence

China has exceeded its goal of reducing the share of coal in its energy matrix

Source: National Bureau of Statistics

This trend is likely to continue in the next five-year plan. Li said that China will continue to promote clean and efficient use of fuel, while making a major effort to develop new sources of energy. And the country will continue to build coal, oil and gas production systems. The country’s coal industry group earlier this week said it plans to increase production by 2025, and that total consumption will be slightly higher at the end of the period than in 2020.

Clean energy

China’s target that 20% of its energy should be met by non-fossil fuel sources by 2025 is faster than the previous target of reaching that mark by 2030 and illustrates the enormous success that the country has achieved in boosting solar and wind capacity installations in recent years. The country will continue to “efficiently” develop these sources and promote hydrogen, hydroelectricity and energy storage over the next five years.

Roar Renewables

China’s solar and wind capacity is expected to grow in the coming years

Source: BloombergNEF forecasts

Li also reiterated China’s support for nuclear power, after falling far short of its goal of the last 5-year plan to have 58 gigawatts of power plants by 2020, ending with just under 50 instead. For the next five years, the country plans to increase the capacity of the atom’s split energy by 40%, to 70 gigawatts.

Electrification