China’s path to deeper carbon cuts hinges on next-gen tech
[JINAN, CHINA] China’s carbon emissions are dropping as wind and solar power flood its grid, but new breakthroughs will be needed to keep the energy transition on track in the world’s largest polluter, according to new research.
Emissions have fallen by 1 per cent since March 2024 after record renewables growth crowded out fossil fuels in meeting new electricity demand, according to the Centre for Research on Clean Air and Energy.
While the country has seen short-term declines before, this is the first time it has been driven primarily by clean energy, according to researcher Lauri Myllyvirta.
“The past 12 months mark a potentially significant turning point for China’s CO2 emissions, with clean-energy growth for the first time outpacing demand growth and displacing fossil fuel use in the power sector,” Myllyvirta said.
At the same time, the country is reaching the limits of how much it can decarbonise by just deploying massive numbers of wind turbines and solar panels, according to a separate report from Ember, a clean-power think tank. China will need to rapidly commercialise technologies dealing with long-term storage, smart grids and carbon removal in order to support the energy transition going forward.
For now, wind and solar are leading the way, generating so much electricity during the first quarter that power sector emissions fell 5.8 per cent, according to Myllyvirta. That helped deliver an overall drop of 1.6 per cent in emissions, despite China’s metals and chemicals industries churning out more pollutants as factories rushed out products before US tariffs soared.
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The trade war creates a wide path of uncertainty for the country’s future emissions. In previous crises, China has stimulated carbon-heavy sectors of the economy. But this time, the government’s public comments have focused on growing domestic markets to consume the goods that used to be exported, which would take the country down a less energy-intensive path, Myllyvirta said.
There is also a chance that stimulus money will be directed to a new suite of green technologies, such as hydrogen, energy storage, and virtual power plants that integrate multiple power sources.
Those are among the innovations that will be critical to maintaining the momentum of China’s energy transition, helping out to smooth out intermittent wind and solar and making it possible to decarbonise hard-to-abate sectors like steelmaking and shipping, according to Ember.
But many are in the early stages, and capital in the clean energy sector has tended to flow to more mature technologies like solar and electric vehicles. Emerging solutions saw a 23 per cent drop in global investment last year, Ember added.
“Breakthroughs beyond wind and solar will determine whether China’s progress accelerates or stalls,” Ember researcher Muyi Yang said in the report.
China on Wednesday (May 14) suspended curbs on exports of rare earths and other goods and technologies for military use targeting 28 US entities as part of the trade detente struck between the world’s two largest economies. Separately, Volkswagen confirmed the Chinese government granted permits to more than one of its suppliers to export rare earth magnets to Europe.
Negotiations between Pirelli and Sinochem International to reduce the influence of the Chinese investor over the tyremaker and comply with new US rules ended without a deal.
Contemporary Amperex Technology is set to raise at least US$4 billion in its Hong Kong share listing by pricing it at the top end of what it indicated, according to people familiar with the matter, thanks to strong demand for the stock.
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