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Updated Feb 2, 2024, 11:00am EST
net zero

How China will drive the energy transition in 2024

REUTERS/Carlos Barria/File Photo
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The Facts

China is both the world’s largest carbon emitter, responsible for a third of global greenhouse gas emissions, and the runaway leader in driving renewables deployment.

Even as it expands its coal fleet, China’s massive manufacturing capacity could potentially speed up the world’s energy transition: Solar panels, lithium-ion batteries and electric vehicles, billed as the “new three” by Chinese officials, are now the country’s fast-growing exports.

It’s hard to overstate China’s role in the energy transition. Beijing’s progress in cutting its emissions will have a huge impact on the world’s efforts to keep global heating within the Paris Agreement target of 1.5 degrees Celsius.

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Ahead of next week’s lunar new year festival, we looked at some potential key moments for China’s climate and energy agenda in the year of the dragon.

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Xiaoying’s view

Here are five major issues that will define the year ahead when it comes to the energy transition — and China’s role in it.

To peak or not to peak

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This year could be critical to China’s stated goal of peaking CO2 emissions before 2030. Although Beijing’s climate envoy said at COP28 that the country was still calculating which year it might peak, the Centre for Research on Energy and Clean Air (CREA), a Helsinki-based think tank, projects that China may have reached the milestone in 2023, thanks to its record growth in renewable deployment: China added more solar power capacity last year than the U.S. has installed in its history, according to Bloomberg.

If the projection stands, a peak in overall global emissions is “very likely to follow,” CREA’s lead analyst Lauri Myllyvirta told me. That would also “eliminate the perception that China’s emissions growth makes it implausible for the world as a whole to get on track to Paris Agreement targets,” he noted.

But there are uncertainties, including whether China’s power demand will continue to surge, said Yu Aiqun, a research analyst at San Francisco-based Global Energy Monitor. “The massive coal power capacity installation in recent years may undermine [China’s] effort to peak power sector emissions,” she said.

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The renewables rush

It’s no secret that China’s renewable expansion has been fast. But exactly how fast? The country is on track to hit leader Xi Jinping’s wind and solar target this year, an astounding six years ahead of schedule. The Chinese energy regulator expected around 200 gigawatts (GW) of wind and solar capacity to be installed this year, pushing the country’s year-end capacity over 1,200GW, a figure it was meant to reach by 2030.

“Although the industry has expected the target to be achieved in advance, the fact that it could be achieved as early as 2024 still caught many by surprise,” said Ran Ze, a director at the China Representative Office of the Environmental Defense Fund, an international non-profit. China’s robust performance could serve as an example to other countries looking to scale up their wind and solar capacity, and help the world achieve its target to triple renewable capacity by 2030, he added.

China “has turned from a ‘follower’ to a ‘forerunner’ and to a ‘pacesetter’ in a short time span” in the global clean energy transition, Beijing’s foreign spokesperson said of the potential overdelivery.

More growth for EVs

The total number of new energy vehicles (NEVs) — which include pure electric, plug-in hybrid and fuel-cell vehicles — on Chinese roads is projected to reach 30 million this year, equivalent to about nine times the total number of NEVs across the European Union. The Chinese figure amounts to nearly 10% of all vehicles owned in the country, according to China EV100, a Beijing-based think tank. It predicted annual sales of NEVs in the country would smash the 10-million mark for the first time this year, indicating the pace is rapidly accelerating.

This will be “a very important and influential development worldwide,” said Liu Xiaoshi, the executive deputy secretary-general of China EV100.

An even more efficient growth stage for the Chinese EV market, already the world’s largest, could be around the corner: “As soon as the EV ownership ratio hits 10%,” Liu told me, “its economies of scale will kick in further because a noticeable segment of the transport sector will have been electrified, creating a bigger momentum.”

Betting big on sodium-ion

Chinese companies are trying to get ahead of the world in developing sodium-ion batteries, a technology that does not involve lithium, a critical but scarce raw material. BYD, the world’s largest EV seller, started building a $1.4 billion plant dedicated to sodium-ion batteries in the eastern city of Xuzhou in January, while Farasis Energy and JMEV, a battery manufacturer and an EV maker based in the southern province of Jiangxi, are promoting the world’s first EV powered by sodium-ion batteries. CATL, the world’s largest EV battery maker, is also working on mass production of the technology.

China already has the most patents related to sodium-ion batteries worldwide, followed by Japan and the United States, according to Andy Zhou, who leads Deloitte China’s automotive sector team. He said that the sodium-ion rush is largely driven by Chinese firms’ desire to find a cheaper and more accessible alternative to lithium-ion batteries.

Zhou warned that the technology still has a long way to go: Sodium-ion batteries have smaller capacities and shorter life spans, meaning it is more feasible to use them to power EVs with lower speeds and shorter ranges, or for energy storage, he said.

Looking ahead to 2035

China plans to release its new national climate targets — formally known as the Nationally Determined Contributions, which will determine the path of its climate actions through 2035 — next year.

The 2035 targets will be “particularly important” for China, partly because they are the first set of international commitments it needs to make for its post-peaking years, said Li Shuo, the director of China Climate Hub at the Asia Society Policy Institute. Plus, the country will need to set targets that cover all greenhouse gases across the whole economy, as China pledged to do in its joint climate statement with the U.S. in November.

Beijing’s targets are “particularly pertinent” for the many developing countries that are highly vulnerable to climate change impacts, noted Richard Black, the director of policy and strategy at Ember, a London-based energy think tank. These countries “are usually allied with China but [their] people are looking to the world’s biggest greenhouse gas emitter to cut emissions as quickly as possible.”

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Notable

  • 2024 will be remembered for another pivotal moment: the retirement of Beijing and Washington’s climate envoys, Xie Zhenhua and John Kerry. In Foreign Policy, the China-focused journalist Lili Pike explained how the pair of long-time opponents — and friends — helped shape the global climate agenda.
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