What’s next for the energy sector in China’s battle against air pollution?

Lauri Myllyvirta

City block scale heat pumps in Shandong. Photo credit: 纽恩泰空气能

This is the English version of an article published on 能源杂志 (“Energy Magazine”) on March 19, 2020.

Since the start of the “war on air pollution”, China’s progress on reducing PM2.5 air pollution has been the fastest in the world. With one year to go, the target of 18% reduction in PM2.5 levels from 2015 to 2020 has already been achieved, with national average PM2.5 levels falling by about 27% by 2019. Average concentrations of SO2 fell 55%.

The energy sector has been the main contributor to these air quality improvements, thanks to coal consumption reaching a peak in 2013, and rapid improvements in emission control technology. As the penetration of emission controls approaches 100% in large power plant and industrial sources, the easily achievable emission reductions have already been realized, and investment in clean power generation cooled down significantly in 2019. Now the sector faces new challenges, including: 1) new pollutants: continued increase in ozone pollution and slow progress in reducing concentrations of NO2; 2) maintaining and accelerating the transition to clean energy; and 3) reducing reliance on gas as solution for heating.

Ozone and NO2

Compared with the progress on PM2.5 and SO2, the trends for two other health-harming pollutants, ozone and NO2, are more alarming. Summertime ozone concentrations increased 11% nationwide from 2015 to 2019. All but four provinces had increases in ozone levels, with the largest increases taking place in Anhui, Tianjin and Shanxi. Average NO2 levels fell, but slowly, with a reduction of only 9% in four years.

These pollutants could be the next frontiers in China’s war on pollution. This is in line with experiences in areas of developed countries with a long history of air pollution problems, including California, London, western Germany and Italy. In developed countries, NOx emissions peaked in 1990, a decade later than SO2 emissions.

This is also aligned with research done in Northwest Agriculture & Forestry University that found falling PM10 and SO2 concentrations but rising NO2 concentrations in provincial capitals as provincial GDP grew.

Health impacts

While PM2.5 remains the pollutant that is most important to control from a public health perspective, NO2 and ozone also have serious health impacts. 

NO2 is a toxic gas that inflames the lining of the lungs, causing problems such as wheezing, coughing, colds, flu and bronchitis. Long-term exposure is associated with diseases such as diabetes mellitus, hypertension, stroke, chronic obstructive pulmonary disease (COPD) and asthma. Exposure to NO2 pollution is responsible for an 760,000 new cases of child asthma per year in China. 

NOx emissions also increase PM2.5 and ozone formation in the atmosphere. NOx has already become a more important contributor to smog episodes than SO2, as SO2 emissions have been cut dramatically. Without much faster progress on NO2, it will be challenging to keep up progress on PM2.5.

Ozone is a highly reactive gas that aggressively reacts with lung tissue, causing cell damage. Short-term ozone exposure results in irritation of throat and eyes, coughing, wheezing, inflammation of lungs and difficulties in breathing. Over a longer period of time, chronic damage to lung tissue may occur.

Ozone pollution triggers asthma attacks and may also worsen other respiratory illnesses such as pneumonia and bronchitis. Exposure to ground-level ozone caused approximately 300,000 premature deaths and 900,000 asthma emergency room visits in 2017.

Where do the pollutants come from?

Energy and industrial sectors are the main sources of both ozone and NO2 pollution. The dominant source of NO2 emissions is combustion of coal, oil and gas in power plants, industry and vehicles.

Ground-level ozone pollution is created when NOx and volatile organic compounds react in the presence of sunlight. The dominant human-made sources of ozone in China are industrial (average contribution 31%), transport (20%) and power plant (16%) emissions, for a total of two thirds of ozone pollution attributed to energy and industrial sources.

What are the solutions?

The “Blue Sky Defence Plan” and other action plans have included measures targeting NOx and VOC emissions, but specific targets for reducing ambient ozone or NO2 levels haven’t been set yet. Targeting reductions in concentrations would ensure public health benefits.

Lack of progress on NOx and increase in ozone show limits of policies focused on end of pipe measures – these pollutants are harder to control with filters. For example, in coal-fired power plants, SO2 scrubbers can achieve control efficiencies of 99% or more, while NOx control devices top out at around 90%. To maintain progress on PM2.5 and start reducing ozone and NO2, reducing the use of polluting fuels will be central.

Getting the energy transition back on track

Until the start of the “war on air pollution” and publication of the National Atmospheric Pollution Prevention action plan in 2013, national coal consumption had been increasing by 7% per year on average. This meant that even as air pollution control technology improved, air pollution levels kept increasing.

From 2013 to 2018, coal consumption fell by 3%. Furthermore, the reductions were concentrated in the sectors with highest emissions per tonne of coal used, industrial boilers and households. Under this new trend, improvements in emission control technology were no longer offset by increasing volumes of coal use, resulting in rapid progress on air quality.

The overachievement of 13th five-year plan air quality targets is in part a result of much slower coal consumption growth than projected a few years ago. The coal consumption control target in the 13th five-year plan meant limiting coal consumption growth to 1.8% per year from 2015 to 2020, while coal use actually fell from 2015 to 2018. This was a result of both clean energy growth and a shift to less energy-intensive economic structure.

However, coal consumption increased in 2019, as a result of large increases in demand for construction materials. A shift in economic policy from deleveraging to stimulating demand meant that the floor area of newly started construction projects reached new records, increasing demand for steel, glass and other construction materials.

Global Carbon Budget estimates that coal-burning grew 3% on year, as coal, steel and cement output grew by 4.5%, 7% and 6% in the first 11 months of 2019. Oil consumption growth accelerated to 6% in the first nine months of 2019, compared with 4% and 5% in 2017 and 2018, respectively.

The results of this increase in energy demand can be seen in air quality data: nationwide PM2.5 concentrations fell 2.9% in the first 11 months of 2019, which is much slower than in previous years. Ozone concentrations increased 6% in the first eleven months of 2019, while NO2 concentrations were unchanged despite major investments in controlling NOx emissions from power plants and steel sector. Two of the key control regions, Jingjinji and surrounding regions (“2+26”) and Yangtze River Delta, managed to reduce PM2.5 levels in line with the autumn-winter period targets in October and November, but the third priority region, Fenwei Plain, had increases in PM2.5 levels during both months.

At the same time, investment in non-fossil energy sources and in electric vehicles slowed in 2019. Newly installed wind power capacity fell 4%, solar power capacity by 53%, hydropower by 53% and nuclear by 31% in the first 11 months of the year, while newly added thermal power capacity increased by 13%. After booming on the first half of the year, electric vehicle sales fell 32% on year in the period from July to November. Accelerating investments in clean power generation will be key to ensure that the energy sector contributes fully to the air pollution efforts, and sufficient clean electricity is available to support the coal-to-electricity shift in industry and households – and oil-to-electricity shift in transport.

Heating sector solutions

The coal to gas shift in industry and households in the Jingjinji region has been an important driver of the reductions in PM2.5 and SO2 emissions, with the share of clean heating in rural villages reaching 43% in 2019. 

Emission reductions in the heating sector and industrial boilers have relied to a large part on replacing coal with gas. The leadership’s renewed emphasis on energy security could mean that rapid growth in the consumption of gas is no longer encouraged.

Supplying clean heating for tens of millions of households over the next years remains a major challenge, as gas supplies are limited and direct electric heating places high demands on electric grids and power generation.

This could include the efficient use of ground-source heat pumps, improvements in building energy efficiency, smart grid and smart heating systems that make use of wind and solar electricity when generation is high.

Building energy efficiency in particular is a major opportunity to make investments using local workforce that stimulate aggregate demand in rural economies and reduce the need for subsidized fuels. Simple measures like insulation and double-glazed windows, installed in millions of houses, would dramatically reduce the pressure on gas supplies.

In conclusion: Few people would have believed at the start of the previous decade that China’s energy sector, known internationally for its high reliance on coal and as a source of emissions could make such a major contribution to cleaning up the air.  Shift to clean energy can make a crucial contribution to the air pollution fight.

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