China will adopt more vigorous policies to ensure carbon dioxide emissions peak before 2030, and carbon neutrality is achieved before 2060, President Xi Jinping told the United Nations.
Xi’s announcement was obviously intended to draw a sharp contrast with policies pursued by U.S. President Donald Trump as political and diplomatic rivalry between the two countries intensifies.
But it also makes strategic sense for a country that has plentiful domestic resources of coal, wind, solar and hydro, but is short of both oil and gas and is increasingly reliant on imports.
China would be the world’s biggest beneficiary from an accelerated energy transition towards an electrified system based on renewables, nuclear and hydro, plus coal coupled with CO2-capture technology.
For China, ambitious plans to re-orient the energy system away from imported oil and gas to domestic energy are not just about climate change and urban air pollution but also economic and national security.
China was a net importer of coal, oil and gas in 2018, the National Bureau of Statistics (“China Statistical Yearbook”, NBS, 2019) shows.
But while it relied on net imports to satisfy just 5% of coal consumption, net imports accounted for 43% of gas consumption and 69% of oil consumption
Oil and gas imports have risen relentlessly over the last two decades. Increasing car ownership and conversion of heating systems to gas have boosted domestic use while production has lagged behind.
As a result, oil and gas have become an increasing burden on the country’s balance of payments, accounting for 11% and 2% of all merchandise imports in 2018.
Oil was the second-largest merchandise import cost, after semiconductors, while gas ranked ninth (“International trade statistics yearbook”, United Nations, 2019).
China’s energy consumption is set to increase further over the next two decades, which will worsen its dependence on imports, unless government policy changes the energy mix