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Chinese state-owned energy companies fast-track peak carbon emissions plans
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.
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.
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