The most recent data show reductions in coal use in China for the third year in a row. China is on track to peak its carbon dioxide emissions between 2025 and 2030, which is an important element of its Nationally Determined Contribution (NDC) commitment under the Paris Agreement. However, the absence of comparable measures, or commitments, on other greenhouse gases means that total greenhouse gas emissions could continue to increase until at least 2030. Although China’s policies and actions appear set to achieve the CO2 goal in its NDC, as well as its national targets, the NDC itself is not yet ambitious enough to limit warming to below 2°C, let alone with the Paris Agreement's stronger 1.5°C limit, unless other countries make much deeper reductions and comparably greater effort than China.
On the 3 September 2016, China ratified the Paris Agreement, and it has policies in place to reach its NDC goals. These policies are currently centred around the targets set in its NDC, which include the target to peak CO2 emissions by 2030 at the latest, lower the carbon intensity of GDP by 60%–65% below 2005 levels by 2030, increase the share of non-fossil energy carriers of the total primary energy supply to around 20% by that time, and increase its forest stock volume by 4.5 billion cubic meters, compared to 2005 levels.
We rate the emission levels estimated for 2025 and 2030 resulting from all aspects of the NDC, except the carbon intensity target, as “medium”. However, the emissions resulting from the 2030 carbon intensity targets, if taken in isolation are significantly higher and would be rated as “inadequate”. Based on our analysis, the weak NDC carbon intensity targets, if taken literally, would only be reached at the expense of important national policies and actions, including in relation to reduced air pollution. In our judgment, this appears unlikely. Consequently, we give a hybrid rating "medium with inadequate carbon intensity targets.”
This means China’s NDC (and its national actions) are not yet consistent with limiting warming to below 2°C unless other countries make much deeper reductions and comparably greater effort than China.
Setting aside the carbon intensity target, China’s NDC’s actions and non-fossil energy target lead to GHG emission levels of roughly 13.2–13.6 GtCO2e in 2030 and to an improvement of carbon intensity of 70%. Current policy projections show China is likely to meet these target levels. If the NDC carbon intensity target were to be considered on its own, and there were no other national targets, this would lead to much higher 2030 emission levels of 14.7–16.5 GtCO2e.
China is implementing significant policies to address climate change, most recently aiming to restrict coal consumption, which may well have already peaked, which the most recent data seem to suggest. The CAT assesses that under a scenario with currently implemented policies, Chinese overall CO2 emissions could indeed peak around 2030, partly due to substantial restrictions on coal consumption in the period from now until 2020.
However, total GHG emissions are likely to continue increasing until 2030, as China has not yet implemented sufficient policies addressing non-CO2 GHG emissions (methane, nitrous oxide, HFCs etc.). This indicates a need for further action in this area, and it is encouraging that the NDC acknowledges that addressing these gases is important.
Our analysis shows that China will achieve both its 2020 pledge and its 2030 plans. The announcement that China will peak its CO2 emissions will have a significant impact on global CO2 emissions in the period after 2030, as most projections foresee increasing emissions for decades after that.
Paris Agreement targets
China’s NDC, submitted to the UNFCCC on 3 September 2016 includes a number of elements:
These elements were all in China’s INDC on 30 June 2015, and were carried over to the NDC submitted to the Paris Agreement on 3 September 2016. China’s NDC also includes a comprehensive list of actions to achieve its 2020 and 2030 targets. A large number of the policies have already been implemented.
China’s 2020 pledge consists of the following elements:
We analysed the effects of all these targets, including the non-fossil target for 2020 and 2030. To do this, energy-related emissions until 2020 were assumed to follow current policy projections from the IEA WEO 2015, adapted to reach the targets of 10% gas by 2020 and 15% and 20% non-fossil fuels by 2020 and 2030, respectively. Post-2020, we assume curtailed emissions growth rates to reach a peaking between 2025 and 2030. CO2 emissions from other sectors, cement and industry, as well as non-CO2 emissions, were assumed to follow present policies. This results in absolute emission levels of 13.2–13.5 GtCO2e excl. LULUCF in 2030.
The carbon intensity target
The target for a reduction in the economy’s carbon intensity of 60% to 65% below 2005 levels by 2030 leads to absolute emission levels of 14.7–16.5 GtCO2e in 2030 excl. LULUCF, with assumed GDP growth rates of 6.4% per year until 2020 and then 5.3% per year until 2030, based on IEA projections. Consequently, China’s implemented national actions appear much more ambitious than the 2030 target for carbon intensity. We find there is a gap of 0.6 to 3.3 GtCO2e between what China is already implementing, and its NDC carbon intensity target for 2030. If China were to improve its carbon intensity target to 70% reduction (or more) by 2030 from 2005 levels, this would close this gap, all other assumptions remaining the same.
CO2 emissions under the carbon intensity target would have to be significantly lower in 2030 if GDP growth were lower than assumed. With an average GDP growth of 5.3% throughout the whole period from 2012–2030 instead of 6.4% until 2020 and 5.3% thereafter, the emission levels in 2030 would be similar to the scenario with current policies and the 20% non-fossil primary energy target, and might also lead to emissions peaking earlier than 2025–2030.
Reconciling the targets
How can the apparent discrepancy between, on the one hand, the effects of all China’s NDC goals (except carbon intensity) and its national policies and measures, and, on the other, its NDC 2030 carbon intensity target, be explained?
CO2 emissions would be significantly higher if there were more coal in the fossil fuel component of primary energy supply than in our base case assessment, which we believe is consistent with present policies, projected through 2030. Under a range of different scenarios, allowing sufficient coal into the fossil fuel component of the primary energy supply to meet the NDC carbon intensity target, with both high and low economic growth rate assumptions, leads to CO2 emissions increasing until 2030, based on the increase in coal use.
This situation contradicts another goal in the NDC, namely that CO2 emissions would peak by 2030 or earlier, is inconsistent with other policies and actions being undertaken in China, and would result in lower natural gas usage than appears either likely or plausible.
These considerations show that it is extremely difficult to reconcile the NDC carbon intensity goals for 2030 with all other aspects of China’s national policies and actions, as well as the other goals in the NDC.
Is China is doing its “fair share” towards global efforts to reduce emissions to levels that would hold global warming below 2°C?
The emission levels estimated for 2025 and 2030 resulting from all aspects of the NDC, except carbon intensity, are in line with effort sharing approaches that focus on historic responsibility and capability and need. Approaches that are more stringent, requiring deeper action for China, focus on equality and capability/costs. Taken together, these emissions are at the upper end of the medium range for China in 2025 and 2030.
However, as discussed above, the 2030 carbon intensity targets stated in the NDC would result in significantly higher emissions that would be rated as “inadequate”. Our analysis shows that these intensity targets would only be reached at the expense of the NDC goal of peaking CO2 emissions by 2030 or earlier, and at the expense of important national policies and actions, including policies targeting air pollution. In our judgment, this would be unlikely.
A small improvement in the intensity target from a reduction of 60% to 65%–70%—or higher—by 2030, compared to 2005 levels, would unambiguously improve the overall assessment. Our analysis shows that the target of a 60 to 65% reduction in carbon intensity by 2030 needs to be considered as an "at least" goal.
As a consequence of this situation the Climate Action Tracker is reluctant to assign a rating of “inadequate” to China’s NDC, but nor can we assign an unambiguous “medium.” Our reluctance to assign an “inadequate” rating is due to the weight that we give to the visible climate policies and actions being undertaken in China, and expressed in our current policy projections, and which are reflected in the NDC in some detail. Unlike many governments, China’s current policy projections embed many climate policy-related actions and goals, and bring the country close to achieving its targets for 2030.
On the other hand, given the NDC is a measure of the overall level of international ambition, the carbon intensity target does not offer as strong a signal as is needed, a signal that would be consistent with China’s own national policies and actions. One plausible explanation is that the carbon intensity target provides a “safety” provision for China, allowing the possibility for higher emissions should its national actions and policies not work out as presently projected.
We therefore recommend a hybrid rating of “medium with inadequate carbon intensity target.”
China’s 2020 pledge is also “medium” on our scale.
With currently implemented policies, China will reach a GHG emissions level (excl. LULUCF) of between 12.2 and 12.5 GtCO2e in 2020 and 13.2–14.1 GtCO2e in 2030. A total of 8.8–9.0 GtCO2e in 2020 and 8.9–9.7 GtCO2e in 2030 are energy-related CO2 emissions. This is an increase in emissions of 22%–24% above 2010 levels by 2020 and 33%–40% by 2030.
This means that according to our assessment, China will meet its 2020 pledge and its NDC targets, but will be substantially above current emissions levels. Much of our projected increase in emissions is in spite of the decrease of coal consumption, relates to emissions of gases other than CO2.
China is implementing a range of policies in most sectors. Most significant is its commitment to limit the use of coal, and a strong increase of renewable and low carbon energy. For example, coal consumption in China has decreased every year since 2013, and since the 2007 Medium and Long Term Development Plan for Renewable Energy, China has increased its renewable energy capacity plans multiple times.
Controlling coal consumption
China’s National Action Plan on Climate Change mentions - in the context of the “reasonable control of the total coal consumption” - a target to increase the share of gas in the total primary energy supply to 10% in 2020. The Energy Development Strategy Action Plan (2014–2020) further defines the “reasonable control of the total coal consumption” as limiting coal to a maximum of 4.2 billion tonnes by 2020.
In February 2015, the Ministry of Industry and Information Technology (MIIT) and the Finance Ministry released the 2015–2020 action plan on the efficient use of coal, aiming at decreasing coal use by 160 million tonnes in the next five years (Xinhua 2015). The 13th Five Year Plan period (2016–2020) introduced more coal-related targets, such as a ban on new coal-fired power plants until 2018, and a cut in annual production capacity of coal of 700 Mtce—which translates to around 14% of total coal production capacity (Enerdata, 2016; Reuters, 2016). To combat air pollution, China is also shutting down coal-fired power plants, for example in Beijing, where the last remaining coal fired power plant will be shut down in 2016, and replaced with gas power plants (Bloomberg 2015b). These actions lead to significant emissions reductions in the CAT assessment of China’s current policy projections. We expect these actions to be important drivers on a pathway towards peaking emissions in China at the latest by 2030, if not earlier.
The latest data from the National Bureau of Statistics of China (NBS) show that, while thermal power generation in the period from January until August 2016 was only 1% higher than the generation in the same period in 2015, generation from hydropower had gone up by 12%, nuclear generation by 24% and wind power generation by 26%. The production of raw coal was down 10% from 2015 (National Bureau of Statistics of China, 2016).
In fact, it has been claimed that overall coal consumption in China may already have peaked in 2013, as it dropped 2.9% in 2014 and by another 3.6% in 2015. This appears to be mainly due to two factors: a decline in growth in the construction and manufacturing sector as a result of the overall slowdown of China’s economic growth, as well as a continued policy drive to lower coal use in order to reduce air pollution and greenhouse gas emissions (Qi, Stern, Wu, Lu, & Green, 2016).
In our current policy projections, we have included an assumed peaking in coal by calculating the effect of a decrease in coal consumption of 160 million tonnes per year (Xinhua 2015) until 2020 and assuming either stable levels or further decreases at the same rate post-2020. This gives a range of emissions under this assumed peaking of coal consumption.
For the first time, the 13th FYP also included a target cap on total energy consumption, at 5 billion tonnes of coal equivalent, as well as targets on air quality progress in cities (Seligsohn & Hsu, 2016).
Renewable energy targets
In its 12th Five Year Plan period (2011–2015), China set a target of 700 GW of renewable energy capacity in 2020. This target was confirmed by the National Action Plan on Climate Change released in September 2014, which defines a number of actions and targets for 2020. These include a targeted 350 GW of hydropower capacity, 200 GW of wind power, 30 GW from biomass and 100 GW of solar power, as well as 58 GW of nuclear capacity (The People’s Republic of China, 2014).
The goal on solar power has since been revised upwards: at the 9th Asian Solar Forum in 2016, China’s National Energy Administration confirmed that an addition of 15–20 GW of solar power capacity is to be expected in the coming years, with 2020 levels projected at 160 GW (Yuanyuan, 2016).
Bloomberg New Energy Finance, in 2013, already expected an increase of non-fossil capacity of a similar order of magnitude, more than 800 GW between 2010 and 2030 (Bloomberg New Energy Finance, 2013), which would add up to more than 1100 GW in 2030.
A report by the Energy Research Institute illustrates a scenario of a high penetration of renewable energy, reaching a share of more than 50% of electricity generation in 2030. While the research is a scenario analysis and not linked to any policies, the report still shows that renewable energy is seen as an important pillar of energy supply in China, which can significantly contribute to a long-term sustainable energy system (Energy Research Institute, 2015).
Energy intensity and non-CO2 emissions
China’s energy intensity targets are supported by policies to reduce energy consumption. In the industrial sector, the TOP 1000 enterprises programme has proven to lead to effective energy savings, and has been extended to 10,000 installations. There is also an increasing number of efficiency standards for appliances, buildings and cars, and the uptake of electric vehicles (full and hybrid) is happening faster and faster (Forbes, 2016).
In 2014 and 2015, China has also started to tackle non-CO2 emissions, most notably HFC emissions. The National Development and Reform Commission (NDRC) is investing in demonstration projects for the controlled disposal of HFCs in industry. Further, it is setting up a reporting and monitoring instrument for F-gases for industrial companies (ESCO Committee of China Energy Conversation Association 2015). The NDC document also states targeted reductions of HCFC22 production of 35% by 2020 and 67.5% by 2025 below 2010 levels, and also refers to controlling HFC23, which is largely a by-product of HCFC-22 production. According to our initial assessment, this could lead to reductions of HFC23 of 230 MtCO2e in 2020 and 300 MtCO2e in 2025. As there is no clear regulation that assures implementation of these targets, we have not included these reductions in the current policy projections. However, they are an important stepping stone towards tackling this sector (EIA 2015).
Updates in most recent statistics
In September 2015, the NBS published revised energy statistics for 2000–2012. The revision reportedly solves a number of technical issues: most importantly, previously unallocated coal demand now being attributed to final consumption in industry (IEA 2015b). However, in the newest IEA publication of CO2 emissions from fuel combustion (IEA 2015c), these updated energy balances have only been included from 2011 onwards, resulting in a slight discontinuity in the emissions time series between 2010 and 2011. For more information, see the 2015 CAT update on China.
As China only makes available two inventory years which do not have the same scope and are thus not directly comparable, we use a combination of international data sources for energy related emissions (IEA 2014a) and non-energy emissions (EDGAR 4.2 (EC/JRC/PBL, 2011), CDIAC (Boden, 2013), and inventory data for LULUCF to determine historic emissions until 2010. For the projections, we used the enhanced policy scenario from the second National Communication until 2020, which leads to 45% improvement of emission intensity for energy related emissions. After 2020 we use growth rates of the World Energy Outlook 2015 (IEA 2015a). We add projections from US EPA (2012) for non-CO2 emissions. For CO2 process emissions, we use growth rates from the non-OECD region from the IEA’s Energy Technology Perspectives report (IEA 2014b).
The estimate of the post-2020 contribution reflects China’s announcement to peak emissions no later than 2030, decrease carbon intensity by 60% to 65% below 2005, and aim at a share of non-fossil fuels in primary energy consumption of 20% in 2030. We consider four options to quantify emission trajectories: calculate absolute emissions from the targeted intensity and projected GDP, the share of non-fossil fuels, peak emissions in 2030, and peak emissions in 2025. For the non-fossil target, we start from the current policy scenario of the WEO2015 and add the effect of recently-adopted policies including the cap on coal and the target for gas of at least 10% and a share of 20% non-fossil fuels (excl. biomass).
For the calculation of the intensity target, we use historic data from China’s Statistical Yearbook and GDP projections from WEO2015 and IMF. Our projection calculations are based on the GDP growth rate from the IEA World Energy Outlook 2015 (6.4% annual growth between 2012 and 2020, and 5.3% annual growth between 2020 and 2030). We have used the IMF 2015 as an alternative scenario for 2012 to 2020 (average of 6.6% annual growth). It would seem unlikely that the Chinese government is actually planning for a lower GDP growth rate than in our central estimate case, as the 13th Five-Year-Plan targets a growth of 6.5% until 2020 (The People’s Republic of China, 2016).
To illustrate potential peaking scenarios, we assume the growth rate of CO2 emissions linearly approaches zero in the respective years. Assuming that the minimum non-fossil share and the latest possible peaking (in 2030) are consistent, we adapt the starting growth rate in 2020 so that the absolute total emission level matches the calculated level resulting from the non-fossil fuel target.
Based on projections from US EPA (2012), however, non-CO2 GHG emissions will continue to grow. This growth will determine the absolute level of total GHG emissions in 2030, and the continuing upward trend points to a need for further policies. China has started to implement some of the actions on non-CO2 emissions indicated in the NDC (see section on current policies), but those are not yet concrete enough to quantitatively include them in our assessment.
We also look at the target to increase the forest stock, under limited data availability: Assuming a wood stock density of around 1.3 tonnes of biomass per cubic metre with a 50% carbon content, the increase in forest stock by 4.5 billion m3 by 2030 from 2005 levels translates into an additional sink of around 430 MtCO2/year, on average, over the period from 2005 to 2030. In comparison, the sink was historically around 400 MtCO2/year. China does not specify whether emissions from forests are included in the carbon intensity target.
Current policy projections
For projections of energy-related CO2 emissions, we use projections from the World Energy Outlook 2014 (IEA, 2015). We adjust the renewable energy capacity based on the most ambitious numbers among those reported in the Bloomberg New Energy Finance report (Bloomberg New Energy Finance, 2013) and official communications from China, and the share of gas and the cap on coal according to the National Action Plan on Climate Change (The People’s Republic of China, 2014). For non-CO2 emissions, we use growth rates from US EPA’s anthropogenic GHG emissions projections applied to the historic data, and use growth rates from the IEA’s Energy Technology Perspectives (ETP) report (IEA, 2010) for CO2 process emissions. Later ETPs do not provide country level data.
We further account for expected emissions reductions from increased renewable energy capacity targets, the target of 10% gas and the targeted decrease in coal consumption. The cap resulting from the coal decrease uses Chinese data from the recent communication as a starting point: the 160 million tonnes of coal are converted to Mtoe and subtracted from the 2014 value (assuming that coal consumption in 2015 will be at a similar level as in 2014).
To quantify emission reductions from the fuel switch, we consider two options. The first is to maintain the total primary energy demand as in the current policy scenario of the WEO 2015 (we assume that the targets are met by shifting from coal towards gas and renewables). The second option is to allow for some flexibility in the total primary energy demand and assume that the coal cap is reached through increasing efficiency additionally to the already expected development of renewable energy and gas.
When shifting away from coal, it is likely that China will shut down older combustion facilities first. This changes the efficiency of the combustion of the primary energy and thus the emissions factor. To reflect this, we use an average of the emission factors implied by the WEO2015 current policy scenario and the new policy scenario for our calculations.
To calculate the reductions of HFC23, we assume that a direct correlation exists between HCFC22 and HFC23 in China. This means that we apply the reduction targets for HCFC22 from the NDC to HFC23 emissions in 2010. We compare this against the reference case—the current policy projections - where we use a historic value from the EDGAR emissions base for HFC23 and growth rates from US EPA for HCFC22, again assuming a linear correlation to HFC23.
We use Global Warming Potentials from the Second Assessment Report of the IPCC.
Bloomberg (2015a). China Boosts Solar Target for 2015 as It Fights Pollution
Bloomberg (2015b). Beijing to Shut all Major Power Plants to Cut Pollution
Bloomberg New Energy Finance (2013). The future of China's power sector. From centralised and coal powered to distributed and renewable? (14 October, 2013).
Boden, T.A., G. Marland, and R.J. Andres (2013). Global, Regional, and National Fossil-Fuel CO2 Emissions. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. Department of Energy, Oak Ridge, Tenn., U.S.A. doi 10.3334/CDIAC/00001_V2013
Climate Action Tracker. (2014). China, US and EU post-2020 plans reduce projected warming
Enerdata. (2016). China confirms ban on new coal-fired power plant construction until 2018. Retrieved September 27, 2016.
Energy Research Institute. (2015). China 2050 high renewable energy penetration scenario and roadmap study.
ESCO Committee of China Energy Conversation Association. 2015. “Notice on the Disposal of Hydrofluorocarbon.” (Accessed on July 1, 2015).
European Commission, Joint Research Centre (JRC)/Netherlands Environmental Assessment Agency (PBL) (2011). Emission Database for Global Atmospheric Research (EDGAR), release version 4.0.
Green, F; Stern, N. (2015). China’s “new normal”: structural change, better growth and peak emissions. Grantham Research Institute on Climate Change and the Environment.
IEA (2014a). Energy Balances. International Energy Agency, Paris
IEA (2014b). Energy Technology Perspectives. International Energy Agency. Paris
IEA (2014c). World Energy Outlook 2014. International Energy Agency. Paris.
IEA (2015a). World Energy Outlook 2015. International Energy Agency. Paris.
IEA (2015b). World CO2 emissions from fuel combustion: Database documentation. International Energy Agency, Paris.
IEA (2015c). CO2 emissions from fuel combustion (highlights). International Energy Agency, Paris.
IMF (2015). World Economic Outlook Database. International Monetary Fund. Washington D.C.
National Bureau of Statistics of China (2015). Statistical Communiqué of the People's Republic of China on the 2014 National Economic and Social Development
National Bureau of Statistics of China. (2016). National data. Retrieved October 7, 2016.
The People’s Republic of China (2014a). National Action Plan on Climate Change (2014–2020).
The People’s Republic of China (2014b). Energy Development Strategy Action Plan (2014–2020).
The People’s Republic of China (2012). Second National Communication on Climate Change of The People’s Republic of China. (14 November, 2012).
The People’s Republic of China (2011). China's 12th Five Year Plan.
The People’s Republic of China. (2016). China’s 13th Five-Year Plan.
The People’s Republic of China (2010). China's pledge to the Copenhagen Accord. Compiled in: Compilation of information on nationally appropriate mitigation actions to be implemented by Parties not included in Annex I to the Convention, UNFCCC (2011)
The People’s Republic of China (2009). Government announcement.
Qi, Y., Stern, N., Wu, T., Lu, J., & Green, F. (2016). China’s post-coal growth. Nature Geoscience.
Seligsohn, D., & Hsu, A. (2016). How China’s 13th Five-Year Plan Addresses Energy and the Environment. Retrieved September 27, 2016.
US EPA (2012). Global Mitigation of Non-CO2 Greenhouse Gases, Washington, D.C., USA.
Xinhua News Agency (2014). Chinese carbon emissions to peak in 2030.
Xinhua News Agency (2015). China to reduce coal consumption for better air
Reuters (2016). China to allocate $4.6 bln to shut 4,300 coal mines. Retrieved September 27, 2016.
Yuanyuan, L. (2016). China’s PV Industry Slated for High Growth Over the Next Five Years. Retrieved September 27, 2016.
Zhang et al. (2014). Carbon emissions in China: How far can new efforts bend the curve?