If China is to achieve its recently announced "carbon neutrality" goal by 2060, then by 2050, China's power system will need to achieve net-zero carbon dioxide emissions. This is one of the key insights from the new proposals and policy recommendations for achieving the goal, which are published separately by two leading and influential Chinese climate research institutions.

Take a look at what this means for China and the world's energy systems. China accounts for nearly 30% of the world's carbon dioxide emissions and more than half of coal usage, with half of the coal-fired power generation capacity.

Both scenarios approach the phase-out of fossil fuels, with over 85% of all energy coming from renewable sources by 2050, and more than 90% of electricity coming from non-fossil energy sources (renewables and nuclear).

Since the goal was announced on September 22, the public display of energy pathways has shown a shift in the concept of China's future energy system, while also highlighting some unresolved issues that remain hanging after a single sentence announcement. The leader stated: "Our goal is to reach a peak in carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060."

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New Scenarios

The first new scenario comes from the Institute for Climate Change and Sustainable Development at Tsinghua University (ICCSD) and 18 other Chinese research institutions, who released the "China Low Carbon Development Strategy and Transition Path" (presentation) on October 12.

At the same time, Professor Zhang Xilang from the Institute of Energy, Environment, and Economy at Tsinghua University (3E) recently gave a presentation (in Chinese, starting at 3:46), outlining the energy and economic implications of achieving carbon neutrality by 2050, 2060, or 2070. It seems that the target date of 2060 has been communicated.

Both scenarios indicate that the power sector will need to reach zero emissions by 2050 and begin to provide "negative emissions thereafter" - estimated to come from bioenergy with carbon capture and storage (BECCS) - to offset emissions from hard-to-eliminate industrial production processes, agriculture, and other sectors.

The Tsinghua 3E scenario predicts that coal-fired power generation without carbon capture and storage (CCS) will essentially end by 2050, but it will maintain a significant amount of coal use outside the power sector until 2060. By 2050, the energy structure has already dropped to below 5%.The gradual phase-out of fossil fuels implies that by 2050, over 85% of energy and 90% of electricity should come from non-fossil sources (renewable energy and nuclear power).

Tsinghua University Professor He Jiankun introduced the changes in China's total energy demand and energy structure under the 1.5C emission pathway at the "China Low-Carbon Development Strategy and Transition Pathways" release on October 12 (black: coal, gray: oil, light blue: fossil gas, green: non-fossil energy). Source: Screenshot of the live broadcast of the speech at Tsinghua University.

Higher Ambitions

The 2060 announcement clearly creates space for bolder energy plans. This becomes evident when comparing the latest situation before 2060 with previous forecasts.

For instance, the "2019 China Renewable Energy Outlook" released last year by the National Renewable Energy Center, a think-tank under China's highest economic planning department, the National Development and Reform Commission, had a bullish scenario where non-fossil energy would only reach 65% by 2050.

Under the new circumstances, the main strategy for phasing out fossil fuels beyond the power sector is electrification, which means that emission-free power generation will not only need to replace China's coal-fired power plants (accounting for half of the world's total) but also most of the coal and oil consumption in the industrial, transportation, and heating sectors.

Meeting the energy demands of the world's largest energy-consuming economy through non-fossil energy seems like a daunting task.

According to the work of IEEE, this means that by 2050, China's solar power capacity will grow about tenfold, and wind and nuclear power capacities will grow sevenfold. By that time, China's solar power capacity will exceed four times, wind power will reach three times, and nuclear power capacity will reach 80% of today's global total.

However, the remarkable aspect of this scenario, given the scale the industry has already reached in China, is that the actual growth rate of clean energy absorption is quite moderate.

Compared to 2016-2020, by 2020-2050, solar and wind power installations will need to almost double, and nuclear power growth will need to more than double.IEEE projects that total energy consumption will reach its peak by 2035, after which the growth of clean energy will be entirely used to replace the existing use of fossil fuels. This contrasts with the dynamics seen thus far, where despite the increasing share of clean energy, emissions are still rising due to the rapid growth in overall energy demand.

In the ICCSD scenario, the role of electrification is estimated, which aligns with the 2C global temperature target, with essentially all investments in the energy industry directed towards electricity.

Both sets of scenarios find that to achieve a pathway compatible with 1.5C and to reach carbon neutrality, substantial investment in negative emissions in the power sector is required, with plans to achieve this through Bioenergy with Carbon Capture and Storage (BECCS).

The ICCSD 2C scenario calls for an investment of 100 billion yuan (approximately 15 trillion) from 2020 to 2050, which equates to 1.5-2.0% of China's GDP during this period. Researchers believe this is similar to the investment needed by the European Union to achieve its emission reduction targets, which is expected to grow by 50-55% by 2030. In the 1.5C pathway, the required investment will increase to 140 billion yuan (21 trillion USD).

A slide from the ICCSD presentation compares energy infrastructure investments under different emission pathways with the investments needed under the EU's 2030 emission targets (as a percentage of GDP). Columns from left to right: current policies; enhanced nationally determined contributions; 2C emission pathway, and 1.5C emission pathway (orange: electricity, blue: carbon capture and storage (CCS), yellow: oil, grey: gas). Source: ICSDD.

Key Details

Comparisons of different projections also highlight the importance of certain key details that still need to be explained.

Different assumptions about which emissions are included in commitments and how much carbon dioxide ecosystems can absorb or be removed by negative emission technologies lead to significant differences in the emission budgets of the energy sector.

Comments from environmental department researchers emphasize that optimistic assumptions about carbon dioxide removal from afforestation leave more room for residual fossil fuel emissions.

Another important issue is whether the targets cover only carbon dioxide or all greenhouse gases (GHGs). If this is the case, then emissions from the energy sector may need to decrease more rapidly and deeply, as some sources of other greenhouse gases are difficult to eliminate.The ICCSD scenario is relatively ambitious in different projections, partly because researchers interpret the target as including all greenhouse gas emissions. However, according to "China Dialogue" citing "an expert close to China's non-CO2 greenhouse gas policies," this interpretation remains an assumption of ICCSD researchers rather than an official government stance.

Challenging

China's economic model is very adept at mobilizing substantial investments, so expanding clean energy, electrified transportation, and other new clean technologies may not be the biggest challenge in achieving carbon neutrality by 2060. Instead, managing the economic, regional, and political impacts of phasing out fossil fuels could be a more significant issue for the country.

By 2050, on the ICCSD low-carbon development path, coal will account for only 5% of China's energy, and the energy supply for the power sector will be less than 10%. This would mean shutting down a few of the 3,000 coal-fired power plants and 5,000 coal mines currently operating in China.

The average lifespan of coal-fired power plants is 30 years. This aligns with China's experience to date—more than half of the capacity installed before 1990 has already been retired, indicating an average plant lifespan of 30 years. However, for any new projects allowed this year or in the coming years, the clock starts ticking towards 2050.

From 2013 to 2015, as the effects of stimulus measures gradually faded, China's coal consumption and CO2 emissions began to decline, proving this challenge. The leadership's initial response was to brand development as part of the transition to a new economic model (the "new normal"). However, by 2015, the financial plight of state-owned mining and smokestack industry enterprises was intensifying. Instead of restructuring these companies, the government opted for more stimulus measures.

The consequences could be even more severe for overseas economies dependent on fossil fuel exports. China's "dual circulation" new economic policy (reducing reliance on foreign markets and technology) and the new emphasis on energy security mean that greater efforts will be made to replace imports with domestic supplies.Adding the commitment to carbon neutrality will reduce the demand for fossil fuels, coupled with substantial investments in the domestic production and transportation of coal, oil, and natural gas, which could mean that the import of fossil fuels will exit very rapidly.

It is also apparent that to achieve the vision of carbon neutrality, it is necessary to work on deep decarbonization solutions in sectors currently considered "hard to abate," especially in the emission processes of the steel, cement, and chemical industries, as well as in agriculture and aviation.

These preliminary studies employed simplified methods and assumed that BECCS would be easier or more affordable than decarbonizing these sectors, but more affordable emission reduction options may emerge.

As for the ICCSD main report, it will be followed by no less than 17 sectoral reports to delve deeper into possible solutions. The policy recommendations of the ICCSD and the Ministry of Environment's statement on the 2060 target call for key industrial sectors to take action during the next Five-Year Plan period (2021-25) to achieve peak emissions.

Ambition Gap

The Intergovernmental Sustainable Development Commission also proposed suggestions to enhance China's commitments under the Paris Agreement. These suggestions include committing to not further increase CO2 emissions from 2025, just a step away from the "peak" in emissions.

In practice, this means setting a cap on total emissions at 10.5 billion tons. The research institute also suggested increasing China's non-fossil energy target to 20% by 2025 and to 25% by 2030 (15.3% in 2015).

He also said that the targets for the Five-Year Plan by 2025 should include reaching a peak in coal consumption and strictly controlling new coal-fired power capacity.

A potentially significant recommendation for the next Five-Year Plan is to set a maximum CO2 emission target for energy-intensive industrial sectors and key cities, to achieve a national maximum emission level later on.

However, according to the proposed cap on CO2 emissions, from 2020 to 2025, emissions will still grow by 4%, nearly 1% per year. Researchers recognize that the continued growth of China's CO2 emissions is not in line with the 1.5C or 2C targets, but they believe that the "inertia" in the system means that China will lag behind these targets and must catch up later.According to Tsinghua University's proposal, non-fossil energy is to account for 20% by 2025 and 25% by 2030, with non-fossil energy growing at the same pace as it has in China so far—approximately 1 percentage point per year. Thereafter, throughout the period from 2030 to 2050, the growth rate of non-fossil energy will triple, that is, increasing by three percentage points annually.

Similarly, the growth of carbon dioxide emissions will only slightly slow down, from 1.5% per year between 2015 and 2020 to 1% between 2020 and 2025, and then cease to grow between 2025 and 2030. After that, by 2060, emissions must decrease by about 4% per year to achieve net-zero emissions.

Thus, aligning China's near-term goals, policies, and commitments with long-term targets will remain challenging—otherwise, most of the efforts required to achieve carbon neutrality will be left for the following decades, as shown in the figure below.

The ICCSD's recommendations for 2025, 2030, and 2050 are translated into annual change rates and compared with the pace achieved during the current five-year plan period from 2015 to 2020. Source: Author's analysis of ICCSD scenarios and historical data. Carbon chart is drawn using Highcharts.

The ICCSD's recommendations for 2025, 2030, and 2050 are translated into annual change rates and compared with the pace achieved during the current five-year plan period from 2015 to 2020. Source: Author's analysis of ICCSD scenarios and historical data. The carbon chart is created using Highcharts.

In the public eye,

Professor He Jiankun, Chairman of the Academic Committee of ICCSD and Deputy Director of the China Climate Advisory Committee, introduced the findings of the ICCSD and pointed out that as China successfully controls Covid-19, China's 14th Five-Year Plan is attracting widespread international attention. Economic recovery has begun earlier than in other countries.

The importance of achieving a green recovery from the crisis was also emphasized. If this green recovery is translated into domestic policy actions, it will enable the country to achieve carbon neutrality more rapidly. [Carbon Brief is tracking how governments around the world are introducing "green recovery" stimulus measures.]

After the announcement, there is also the possibility of revising the energy targets of the upcoming five-year plan to reflect long-term ambitions. Although the plan was only released in 2021, the drafting process has been attracting targets proposed by researchers close to Tsinghua University.

Research on cost-optimized emission reduction strategies indicates that a more linear path towards the 2060 target is economically optimal (for example, see the IPCC Special Report on 1.5 degrees), not to mention more credible to the outside world. Moreover, targets advocated by individuals are often unachievable by governments and broader bureaucratic institutions.Therefore, there are various factors that could lead to a more rapid shift in emission trends, as different parts of the economic planning mechanism, local governments, and state-owned enterprises chart their own paths to achieve the overall vision for 2060.