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Chinese state-owned energy companies fast-track peak carbon emissions plans
21 April 2021Bernadette Lee
A number of state-owned Chinese companies, including large oil
and energy players, are fast-tracking their peak carbon emissions
plans with the aim of achieving the target before 2030, say
analysts. This follows the "State of the Nation" address by Premier
Li Keqiang in early March.
Li called for the formulation of specific plans to achieve peak
carbon emissions before 2030, which has become an immediate task
for all levels of government agencies and state-owned
enterprises.
This will have major implications on industry- and
company-specific five-year energy plans, which are expected to be
released over the next few months, according to Lara Dong, research
and analysis director, power at IHS Markit in Beijing. Those
specific plans follow the release of the national 14th Five-Year
Plan, which included an unprecedented emphasis on climate change
(see IHS Markit article.).
A number of Chinese companies set their decarbonization goals
some years ago, following government directives, but a series of
official announcements since 2020 have accelerated such moves, said
Bing Han, senior research analyst I, power at IHS Markit in
Beijing.
China's commitment to reach carbon neutrality by 2060 and peak
carbon emissions by 2030 was unveiled during a President Xi Jinping
address to the United Nations in September 2020.
A top-down campaign and political task
Decarbonization is now a top-down campaign and a political task,
and companies need to first announce their commitment and follow up
with specific action plans to demonstrate their support for the
national campaign on carbon emissions peak and carbon neutrality,
Dong said.
"The action plans to reach carbon emissions peak before 2030 is
required by the 14th Five-Year-Plan (FYP), and you will see key
Chinese companies making their pledges public and setting specific
targets through the 14th FYP. Decarbonization will involve
different levels of government, state-owned companies, and
sectors," she said.
State-owned companies that have set their targets for peak
carbon emissions include State Power Investment Corporation, which
has pledged to achieve peak emissions by 2023. China Huadian
Corporation and China Datang Corporation, both of which are among
the five largest state-owned power generators, aim to do the same
by 2025.
Sinopec
Meantime, state-owned oil company Sinopec (formerly known as
China Petrochemical Corporation) in March announced plans to build
1,000 hydrogen refueling stations in the country by the end of
2025. Sinopec is the country's largest hydrogen producer with an
annual output of 3.5 million mt.
"As part of China's 14th Five-Year Plan, Sinopec has included
'clean' in the company vision for the first time. [With] the goal
of building China's largest hydrogen energy company, Sinopec will
also be promoting clean energy construction through accelerating
the transformation of hydrogen sources from grey hydrogen to blue
and green hydrogen," the company said in a 11 March statement.
The company plans to transform its businesses, providing oil,
gas, hydrogen, electricity, and non-oil products in support of
China's carbon neutrality goals, Ma Yongsheng, Sinopec president,
said.
Sinopec stepped up construction of an integrated hydrogen energy
supply chain in 2020, spanning various fields including operations,
research and development in technology, production storage and
transportation, and network distribution
China National Offshore Oil Corporation (CNOOC) and PetroChina,
two of the large national oil companies in China, also set carbon
emissions peak targets.
Feasible, measurable action plans
While most of these Chinese companies may set specific action
plans focusing on carbon emissions peaking at this stage, they
could be viewed as part of the long-term net-zero effort as well,
Dong said. But she also cautioned the need for companies to come up
with feasible and measurable action plans.
Material actions, according to Han, would involve hefty
investments.
The China Hydrogen Energy Alliance predicted China's annual
hydrogen demand would hit approximately 60 million mt by 2050,
which would help the country cut 700 million mt of carbon
emissions. Hydrogen energy will reduce carbon dioxide emissions by
6 billion mt globally per year by 2050, according to the
International Hydrogen Council.
