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Analysis: China’s post-lockdown emissions surge shows signs of cooling

Analysis: China’s post-lockdown emissions surge shows signs of cooling

China’s carbon dioxide (CO2) emissions grew by around 1% in the second quarter of 2021 compared to a year earlier, new analysis for Carbon Brief shows.

This is a significant slowdown from the previous quarter of the year, which saw emissions rise at their highest level in the first quarter. fastest paceThe economy rebounded from the coronavirus pandemic in more than a ten year period on a wave that saw growth in steel, cement and construction.

The slowdown includes a 16% decline in diesel demand year on year and a 3% drop in oil products overall. There has been modest growth of only 1% for cement, and 3% for power plants. These shifts may reflect steps taken by the government. control financial vulnerabilities? particularlyIn the real estate sector, there are also opportunities for rein inThe steel production will continue to grow rapidly.

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The analysis is based upon official statistics for domestic production, import, and export of fossil fuels, cement, and commercial data on changes to stored fuel stocks.

The figures come as China works to flesh out its “dual carbon” pledges to peak emissions by 2030 and reach “carbon neutrality” by 2060. Future plans by the central government due to be publishedIn the next year or early next year, include peak emission strategies for the iron- and steel sector as well as an action plan to support the energy sector.

However, separate analysisPublished by the Centre for Research on Energy and Clean Air(CREA) Global Energy Monitor (GEM) shows that companies in China’s two largest CO2-emitting sectors – power and iron and steel – have continued to announce new investments in coal-based capacity, pointing to a continued mismatch with the country’s emissions goals.

Slowing growth in emissions

According to new analysis, CO2 emissions increased by 1 percent in the second quarter 2021 compared with 2020 and by 5 percent compared to pre-pandemic levels in 2019, respectively. (See: Data sources.

While emissions rose, there was a noticeable slowdown in growth from the first quarter of 2019, when emissions were up 9% compared to 2019 levels, and 15% year-on–year. 

The chart below shows the slowdown. The graph shows year-on-year emission growth in the most recently completed quarter in red and the previous quarter in blue.

Year-on-year change in Chinas quarterly CO2 emissions from fossil fuels and cement

Year-on-year change in China’s quarterly CO2 emissions from fossil fuels and cement, %. Emissions are calculated from National Bureau of Statistics dataProduction of different fuels as well as cement China Customs dataInformation on imports and exported WIND InformationData on inventory changes, applicable IPCCEmissions factors for default annual emissions factorsFrom 2018 to 2018, per tonne cement production Monthly values are converted to annual fuel consumption data in annual Statistical CommuniquesTo National Energy Administration dataon fossil gas and coal consumption in the first quarter and second quarters 2021. Carbon Brief Chart Highcharts.

The second quarter’s increase in CO2 emissions was primarily due to increased coal use for power generation and increased fossil gas use across all sectors. Emissions from coal use other than power have stopped growing.

This is illustrated in this chart. Contributions to the growth of emissions are broken down by fuel (indicated below by different colours) as well as by sector (rows).

Annual change in Chinas quarterly CO2 emissions broken down by sector and fuel

Annual change in quarterly carbon dioxide emissions, broken down by fuel type and sector, millions of tonnes. Estimated emissions are from National Bureau of Statistics dataProduction of different fuels as well as cement China Customs dataInformation on imports and exported WIND InformationData on inventory changes, applicable IPCCEmissions factors for default annual emissions factorsFrom 2018 to 2018, per tonne cement production Monthly values are converted to annual fuel consumption data in annual Statistical CommuniquesTo National Energy Administration dataon fossil gas and coal consumption in the first quarter and second quarters 2021. Chart by Carbon Brief Highcharts.

In the second quarter, consumption of thermal coal – used for electricity production, as well as in industrial boilers and to heat buildings – increased by 3%, compared to 20% annual growth in the first quarter of 2021.

After an increase of 9% in the first quarter, coke production fell by 1%. The second quarter saw a drop in oil product consumption of 3%. This was mainly due to diesel’s 16% decline, after respective increases of 17% & 12% in the previous quarter.

Notably, fossil fuel consumption continued to grow, increasing 25% annually in the second quarter of 2021. Annual growth cement productionAnother major source of CO2 emissions, slowed down from 47% to just 1% in quarter one.

The growth in coal demand was primarily driven by the power sector. However, the biggest increases in electricity demand were driven by heavy industry. Steel, other metals and cement were responsible for the largest increases.

The most significant turnarounds were in primary steelmaking, cement manufacturing, and the consumption of diesel, which is primarily used to transport bulk freight.

These are all closely related to the construction sector, which was affected by movesThe government is working to reduce the amount that can be borrowed, with a particular focus on real estate. Additionally, local governments were interveningTo limit steel production in line with the late 2020 target of limiting 2021’s steel output to 2020. 

 

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Local governments have imposed strict output restrictions that have affected steel plant operations during summer. However, a recent Politburo instruction to avoid “campaign-style” emission reduction measures was widely seenAs a rebuke for these curbs. (See Carbon Brief’s recent explainer(Read more about this development.

Additionally, production in second half of the year will be affected by a sharp rise in crude iron production in first half. would need to fallTo meet the target, increase by approximately 11%

The expectationNow is the time to set a new, more restrictive goal to limit production. Even though the target is less restrictive, it would still be enough to stop the approximately 10% increase in steel output over the past 12 month.

Aligning investments

Contrary to the leadership’s call to “resolutely contain high energy-consumption, high-emissions projects”, the power and steel sectors have continued to announce plans for new coal-based power and steel projects in the first half of 2021.

AnalysisFrom the Centre for Research on Energy and Clean Air(CREA) Global Energy Monitor(GEM), also published today tracks announcements made in these sectors from 2021 to date.

The analysis revealed announcements for 18 new blast furnaces with a total production capacity of 35mt per year and 43 new coal-fired power plants totalling 24 gigawatts. If these projects were approved and built, they are expected to emit approximately 150m tonnes (MtCO2) of CO2 per annum, equivalent to the amount of the entire annual emissionsThe Netherlands 

Under China’s iron and steel capacity control rules, new projects “replace” retiring capacity so total capacity does not increase, but old plants close to retirement are replaced by new equipment.

According to the latest requirementsThe air pollution priority regionsShould require1.5 tonnes of the old capacity will be shut down for every tonne they authorize, up from 1.25.

In practice, however, the CREA/GEM mapping found that the ratio was around 0.9-1.1 tonnes closed for every tonne permitted in all the provinces, including in 2020–21, meaning little-to-no net reduction in capacity to date. There is also a major problemIllegally operated and illegally constructed capacity

The steel industry’s proposedEmissions targets would result in a significant fall in the demand pig ironOver the past decade, blast furnaces produced these products.

This means that blast furnaces that are retiring will be replaced by newer ones on a very 1:1 basis. If they can’t produce the expected output, operators of new facilities could face financial distress.

This could make it more difficult for the government to slow down or institute a new round to support heavy industry.

However, there is a shift in the mix for new capacity building in the power sector. Major power firms said in a survey91% of their new-generation investments were made in non-fossil capacities early in the year.

The solar industry expectsRecovery from a recession: Investments and installations slow start to 2021This year, around 60GW of solar panel capacity was installed. Solar panel manufacturing has seen a surge, with around 60GW of capacity installed in 2012. 51% increaseThe forecast was confirmed in the first half.

If the expectations can be met, the second half of the year would see the mix of added power capacity align better with the country’s climate goals – as well as a targetIn 2021, we plan to install 90GW of solar power and wind.

Climate plans

China’s climate envoy Xie Zhenhua recently revealed that the top-level design for the country’s climate effort will be released soon and described the key features.

The plan will include targets and plans to increase clean energy and reduce fossil energy; industrial optimization and upgrading; and energy-saving and low carbon buildings. low-carbon transportation systems? circular economyresource efficiency; technological innovation; green financing; fiscal, taxation and pricing policies; improving carbon market; and implementing nature-based solutions.

The scale of the challenge is illustrated by the chart below, which shows that annualised emissions across the Chinese economy have continued to steadily increase in recent years – albeit with a levelling off in the second quarter of 2021.

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Chinas annual CO2 emissions broken down by sector and fuel

Annual change in quarterly carbon dioxide emissions, broken down by fuel type and sector, millions of tonnes. Estimated emissions are from National Bureau of Statistics dataProduction of different fuels as well as cement China Customs dataInformation on imports and exported WIND InformationData on inventory changes, applicable IPCCThese are the default emissions factors annual emissions factorsFrom 2018 to 2018, per tonne cement production Monthly values are converted to annual fuel consumption data in annual Statistical CommuniquesTo National Energy Administration dataon fossil gas and coal consumption in the first quarter and second quarters 2021. Chart by Carbon Brief Highcharts.

Some sector-specific plans are also becoming more clear, such as the steel sector. reportedlyTargeting a peak in emissions before 2025 and a 30% reduction in peak emissions by 2030. The power industry is one of the most polluting sectors. is expectedTo reach its peak emissions earlier than the national peak. This is intended before 2030. debateIt is possible to still inquire about a particular date.

A new Politburo directive on reducing carbon emissions has sent mixed messages, receiving divergent interpretations over what it means for China’s level of ambition.

The directive called on one hand for “resolutely containing” high-energy, high-emissions projects, and on the other hand warned against “campaign-style” measures to reduce emissions, while urging the government to issue a CO2 peaking action plan as soon as possible.

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The purpose could be read as a directive not to make too many interventions in steel production or electricity consumption, in the name reducing carbon emissions. 

However, the directive also told party officials to “establish before breaking”, indicating, according to some expertsNow is the right time to invest in clean infrastructure and not curb high-emitting activities.

State media and experts responded positively to the directive warned against “unrealistic pledges” and emphasised that reaching carbon neutrality is a “long-term task”.

These statements are interpreted in some quarters as the country’s leadership “softening its tone on climate ambition”. Others disagreeThey also emphasize the fact that they signal an end for ad-hoc reactions and favor strict, top level planning to meet the targets.

The directive was ultimately adopted. can be read as a signal that the pace of China’s low-carbon transition will be controlled by the central government alone.

Data sources

The analysis data was compiled from the National Bureau of Statistics of China (NEA), China Electricity Council (CEC), and China Customs official data release, as well as WIND Information, an industrial data provider.

Data from multiple sources were cross-referenced. Official sources were used when possible. WIND Information was used to adjust data.

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The CO2 emissions estimates are based upon the National Bureau of Statistics default fuel calorific values and the IPCC default emissions factors. The cement CO2 emissions factor is calculated using. 2018 data.

Oil consumption data was limited to oil products consumption. Crude oil consumption was therefore estimated using imports and production data.

Official releases that did not include changes between 2019 and 2021 are used to calculate these. However, only the most recent release is linked to.

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