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Page added on September 29, 2020

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China’s net-zero goal to send coal, oil demand diving

Alternative Energy
China’s “monumental” announcement it is targeting carbon neutrality by 2060 has cemented a permanent downward track for coal demand in the country and points to a peak in its use of oil as early as 2025, according to Bernstein Research.

The predictions are part of a radical transformation expected from the world’s largest consumer of energy and biggest carbon-emitter, to meet the surprise goal announced this week by President Xi Jinping – a goal about 40 years ahead of expected, Bernstein said.

Mr Xi also announced China, which represents almost 30 per cent of global carbon emissions, would reach peak emissions before 2030.

It spells a reversal of the rapid growth in fossil fuel demand in China that has propped up global energy commodity markets since early this decade. It is expected to have implications for international oil prices, as well as for imports from major suppliers of coal and gas such as Australia.

“The key message is, with this strategy that China has come out with, we expect very limited demand growth here on in for oil in that net zero plan,” Hong Kong-based senior oil and gas analyst Neil Beveridge said on a webcast.

“We still think gas is going to grow in the energy mix in the next 10 years but beyond that it does look more questionable.”

Australia is China’s biggest supplier of liquefied natural gas, with giants such as Sinopec, CNOOC and PetroChina major customers for export ventures in Queensland and Western Australia.

The impact is, however, most dramatic on coal, now 57 per cent of China’s energy mix and which Bernstein expects will fall to nearly zero by 2050.

“We really believe downward is the only way forward for Chinese coal prices and coal’s share in China’s electricity mix,” said Bernstein’s Asian renewables analyst Lu Wang.

This is really a Herculean challenge which will require enormous amounts of investment.

— Neil Beveridge, Bernstein Research

The firm is forecasting China’s oil demand will plateau at about 14 million barrels a day some time between 2025 and the end of the decade, and then start to decline, dropping to less than 6 million barrels a day by 2050.

Gas use is seen almost doubling from about 330 billion cubic metres today to about 600 billion cubic metres in 2030, “but beyond that China will effectively go ex-growth”, Dr Beveridge said.

Renewables set to soar

Coal is seen immediately starting a sustained decline through to 2050, “when it really gets taken out of the energy mix”, he said.

In contrast, renewables are set to soar, with installed capacity of solar PV generation rocketing from less than 300 gigawatts today to more than 2500 gigawatts by 2050, when its share of the electricity mix would be 32 per cent compared with 3 per cent today. Wind power growth is almost as rapid, rising from 210 gigawatts today to almost 1400 gigawatts by 2050.

Hydrogen is a huge beneficiary, with demand potentially growing from less than 10 million tonnes today to 140 million tonnes by 2050, when it will be 11 per cent of the energy mix.

Wood Mackenzie Asia Pacific vice-chairman Gavin Thompson underscored that big questions remain about China’s goal, including the definition of “carbon neutrality” and the road map to achieve it.

But the consultancy is expecting increased investment in wind, solar, electric vehicle and battery storage deployment, as well as support for green hydrogen and carbon capture and storage (CCS) technology to reduce China’s annual 10 billion tonnes of carbon emissions. It said China will need to deploy more than 1 billion tonnes of CCS capacity across its power and industrial sectors to deliver its 2060 target.

“This is really a Herculean challenge which will require enormous amounts of investment,” Dr Beveridge said of the task to transform China’s energy mix.

The firm puts the investment required at $US250 billion ($354.4 billion) a year by the mid-2030s, dropping to about $US150 billion a year by the 2040s. Over the next 30 years some $US5.5 trillion, or about $US184 billion a year, would be needed on renewable power, CCS and hydrogen.

Dr Beveridge said that more broadly, China’s announcement puts pressure on other countries to move more vigorously on emissions commitments.

“Certainly if you look at countries like Japan, Australia – wealthy OECD countries that have not made the commitment to net zero by 2050 or 2060 –I think there’s really no excuse for that now.”

afr.com



9 Comments on "China’s net-zero goal to send coal, oil demand diving"

  1. bochen787 on Tue, 29th Sep 2020 8:58 pm 

    This is the Chinaman’s Century, amerifuckers!

  2. southwest_PA on Thu, 1st Oct 2020 8:09 am 

    “Hydrogen … will be 11 percent of the energy mix.” Hate to break it to you, but hydrogen is not an energy source. It’s a storage medium. “Green” hydrogen is solar, hydro or wind power stored in chemical form.
    Typical financial article, low on physics…

  3. Abraham van Helsing on Thu, 1st Oct 2020 9:01 am 

    “Hydrogen … will be 11 percent of the energy mix.” Hate to break it to you, but hydrogen is not an energy source. It’s a storage medium. “Green” hydrogen is solar, hydro or wind power stored in chemical form.
    Typical financial article, low on physics…

    Nobody claims that hydrogen is an energy source. Hydrogen “merely” being a storage medium is exactly the point why hydrogen is being brought up in the renewable energy narrative in the first place.

    Another clueless American kicking in open doors, in the deep conviction of shedding light upon the world.

    The only one “low on physics” is southwest_PA. Wetback by any chance?

    /sigh

    The article is reasonable.

    Australia is China’s biggest supplier of liquefied natural gas, with giants such as Sinopec, CNOOC and PetroChina major customers for export ventures in Queensland and Western Australia.

    More reason why Australia could end up in Chinese hands, certainly if Australia would be dumb enough to respond with a liquid gas boycott after an Anglo naval defeat in the SCS.

    Remember the behavior of Japan in 1941? They were forced to occupy the Dutch East Indies, after they were oil-starved by the US in a successful attempt to force Japan into the war. Pearl Harbor was an intentional US pawn sacrifice in order to get the American Century started, via the desired war participation.

    https://documents1940.wordpress.com/2017/09/25/time-life-the-american-century/

    The Chinese have far better cards than the Japanese had in 1941. The Japs had 5% global GDP in 1941, The Chinese something like 20% and counting.

  4. Cloggie on Thu, 1st Oct 2020 9:15 am 

    “This is the Chinaman’s Century, amerifuckers!”

    Actually it isn’t. It will be a multipolar world, with Europe being the primary address again and copy cat China the #2. How about finally producing a Chinese car, let alone a plane, rather than these eternal hammer and nails for Walmart? Where is your Rembrandt, Shakespeare, da Vinci, Keppler, Copernicus, Newton, Leibniz? There isn’t any. All we have is a demographic hellbent on consensus and social harmony, eliminating any impulse for the creative individual:

    https://en.wikipedia.org/wiki/The_Geographer

    The figures regarding universities and sports, as well as Russian aspirations to become member of the European Common Home, should give you a clue about who will rise to prominence next:

    https://deepresource.wordpress.com/2020/09/30/world-university-research-ranking-2020/

    But hey, we will respect you as a major ancient civilization and will accept the New Silk Road, provided trade is balanced. At least you are better than Muslims and Africans, not that that sets the bar very high. But hey, you gotta row with the paddles you have (ancient Dutch proverb)

    https://i.pinimg.com/originals/42/03/b3/4203b3643d3883cdac7281ab1e27be9f.jpg

  5. Bo Chen on Thu, 1st Oct 2020 9:16 am 

    About your german cars…..
    https://enapp.chinadaily.com.cn/a/202009/30/AP5f7440f8a310b0a661bf0f97.html

    Its going the same way of your german high speed trains

  6. Abraham van Helsing on Thu, 1st Oct 2020 9:51 am 

    “About your german cars…..
    https://enapp.chinadaily.com.cn/a/202009/30/AP5f7440f8a310b0a661bf0f97.html

    Its going the same way of your german high speed trains”

    Yep, invented by creative Europeans and assembled by cheap Chinese labor. Win-win situation.

    What about German highspeed trains? Thanks to the Germans, French and Canadians, you now have them too. You would never have got them without white technological aid.

    German ICE (have sat in that one several times en route from Holland to Frankfurt Airport)

    French 2007 TGV speed record (575 kmh):

    https://www.youtube.com/watch?v=EOdATLzRGHc

    German maglev train technology in China:

    https://www.youtube.com/watch?v=fvMXvRA03ps

  7. bochen787 on Thu, 1st Oct 2020 9:57 am 

    EV is the future, guess no one hear heard of BYD, Chanje, Geely, etc

    BMW is trading tech transfer for access to China consumer market… long term win for China…

    Germans mastered ICE but its on the way out

    Dont let the door hit you too hard…

  8. Cloggie on Thu, 1st Oct 2020 10:06 am 

    EV is the future, guess no one hear heard of BYD, Chanje, Geely, etc

    BMW is trading tech transfer for access to China consumer market… long term win for China…

    Germans mastered ICE but its on the way out

    Dont let the door hit you too hard…

    Of course EV is the future:

    https://deepresource.wordpress.com/2019/08/18/e-vehicles-2025-and-the-winner-is-volkswagen/

    2025:

    1. Volkswagen
    2. Renault-Nissan-Mitsubishi
    3. Geely
    4. Tesla
    5. Toyota

    What door?

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