China is shifting its focus from controlling energy consumption to controlling carbon emissions, a change from process control to results-oriented management that will compel industries to adopt green technologies in the energy transition.
The State Council of China today released the “Work plan for accelerating the establishment of a dual control system for carbon emissions“, marking the first time China has issued a national work plan on this subject since proposing the transition from energy consumption dual control to carbon emission dual control at the Central Economic Work Conference in 2021. The “dual control of carbon emissions” refers to controlling the carbon emission intensity per unit of GDP and the total carbon emissions. Previously, “dual control of energy consumption” referred to controlling the energy consumption intensity per unit of GDP and the total energy consumption.
The work plan proposes that from 2026 to 2030, a dual control system focusing on intensity control, supplemented by total volume control, will be implemented. After reaching peak carbon emissions in 2030, the focus will shift to a system where total volume control is primary and intensity control is secondary. The work plan explicitly states that carbon emission indicators will be included in future national development planning.
China’s 2020-2025 plan already includes a target of an 18% reduction in carbon emission intensity. However, progress on this target has lagged due to the energy-intensive development model followed during the pandemic. The rapid development of clean energy in China has laid the foundation for accelerating the reduction of carbon emission intensity. In recent months, clean energy power generation met the growth in electricity demand, leading to a decrease in the proportion of electricity generated from coal and gas. The output of the cement and steel industries has also been declining due to the slump in the real estate sector, suggesting that China’s CO2 emissions may have peaked in the first quarter of this year and showed a downward trend in the second quarter. However, the current trend is not sufficient to achieve the 18% target, and China needs to accelerate the development of clean energy while reducing the use of fossil fuels in the power sector and other industries.
The introduction of the work plan raises expectations that China will consider carbon emissions as a crucial factor in its economic development over the next five years. The development of clean energy enables the Chinese government to set more ambitious emission reduction targets. To align with the climate goals of the Paris Agreement, China needs to peak its emissions as soon as possible and achieve a 30% reduction from the peak by 2035. Doing so will not only make the goal of achieving carbon neutrality by 2060 feasible and credible but also position China as a world leader in the burgeoning clean technology industry, while continuing to drive national economic development.