China’s carbon neutrality goal: more action needed on ground, report says

Guo Rui
·4-min read

China needs to halve carbon dioxide emissions from its coal-fired power plants by the end of the decade if it wants to achieve its carbon neutrality goal by 2060, according to a London-based climate research group.

While the net zero emission goal was achievable, its execution on the ground was a matter of concern, TransitionZero said in a report published on Thursday titled “Turning the Supertanker – Powering China’s coal to clean transition with actionable analytics”.

“The implementation gap between the government’s net zero target and what is happening on the ground is a cause for concern from both a climate and economic perspective,” it said.

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Specifically, the report recommended China close, convert or put into reserve 364 gigawatts of coal-fired power capacity by 2030, and regulate and reform its national carbon trading scheme known as the emissions trading system (ETS).

Using satellite imagery, machine learning (ML) and financial modelling, TransitionZero said replacing China’s coal plants with clean energy alternatives could save US$1.6 trillion.

It said also that the ETS in its current form would have no impact on reducing emissions as it was oversupplied by 1.56 billion tonnes – the equivalent of a year’s worth of European Union’s ETS emissions – mainly due to data falsification and inaccurate benchmarking.

“For this reason, we recommend China cancel all new coal immediately and indefinitely, issue guidance on a net zero aligned phase out, reform their ETS and use satellite imagery and ML to keep ETS data falsification in check,” the report said.

China began emission trading experiments 10 years ago with pilot schemes in Beijing, Shanghai, Tianjin, Shenzhen, Chongqing, Guangdong and Hubei. These paved the way for a trial launch of the ETS in February and online trading is expected to begin this quarter.

“We hope the Chinese government reforms the ETS before trading starts in earnest. If they don’t, the ETS will not play any meaningful role in meeting China’s net zero pledge because it will remain structurally oversupplied,” Matthew Gray, co-chief executive of TransitionZero, said.

China began emission trading experiments 10 years ago. Photo: Reuters
China began emission trading experiments 10 years ago. Photo: Reuters

“We believe the Chinese government has the ability to replicate our technology to avoid data misreporting. The Ministry of Ecology and Environment already uses technologies such as drones to monitor air pollution emissions. The use of satellite imagery and machine learning could be another power tool to help enforce the ETS,” Gray said.

Ma Jun, director of Institute of Public and Environmental Affairs in Beijing, said that while the phasing out of coal-fired power needed to be accelerated, it had to be done with care to avoid putting the power system at risk.

“The stability of China’s power grid is also important. Renewable energy sources such as wind and solar have huge potential, but there are problems with long-distance transmission and storage,” he said.

“China has more than 3,000 coal-fired power units of more than 1 billion kilowatts, more than half of which are too old and inefficient,” Ma said.

“New coal power plants under construction are much more energy efficient and it is acceptable to replace the old units with the new plants but coal-fired power should be eliminated in the long run.”

He agreed China should learn from other countries on emission trading.

“Trading [in the EU] was not active for a long time and the price of carbon was kept at a relatively low level and that is not conducive to the reduction of emissions. China should learn from the EU in this regard,” Ma said.

“This study mainly used satellite imagery and machine learning for monitoring, and that is perfectly fine, but in China there are other options to improve identification and verification [of emissions],” he said. “Satellite imagery gives us rough estimates and is good when there is no access to the data.”

Ma also said the ETS should be reformed to improve data transparency.

“All thermal power companies which participate in trading have their data audited and they should disclose their data to the public,” he said.

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