NOTE: This assessment is based on our May 2022 assessment with the additional policy inclusion on the 14th Five Year Plan for Renewable Energy (provincial targets have yet to be included). We have also revised emission pathways with the latest historical emissions and economic data, as well as GDP forecasts.
China’s 20th Party Congress in October 2022, outlining President Xi Jinping’s vision for the next five years, delivered no new headline policy updates on climate and environment but re-emphasised key trends of the last year. This includes pushing for modernisation and efficiency gains in industry and energy systems, evolving the economy towards higher value and cleaner production, and the necessity of coal as a “backstop for energy security”.
While China’s energy transition continues to build momentum—highlighted by sectoral peaking plans and supercharged national and provincial ambition on renewables rapid scaleup—unfortunately, dependency on carbon-intensive fossil fuels is set to stay for the immediate future.
Our analysis on China’s current policies show they continue to lead to greater decarbonisation levels than under its NDC targets.
Ahead of COP26 in November 2021, China officially submitted to the UNFCCC its carbon neutrality “before 2060” target and updated NDC targets, strengthening its previous non-fossil share and carbon intensity targets, while adding a new renewable energy capacity target. However, while China’s updated NDC was an improvement on previous targets, it leaves room for further target-raising ambition. We project that China is likely to comfortably overachieve its targets without substantially increasing its current mitigation efforts, despite increasing emissions in the short-term.
China’s international targets are supported by its Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality and Action Plan For Carbon Dioxide Peaking Before 2030 , as well as the 14th Five Year Plan (FYP), which includes energy and carbon intensity reduction targets, as well as energy targets such as non-fossil shares for energy and electricity sectors.
The CAT current policies scenario, which incorporates China’s latest policies and guidance as well as technological trends, shows that growth in non-fossil energy shares and solar and wind capacity installations will surpass the country’s official NDC targets.
China’s updated NDC target remains “Highly insufficient” and if all countries followed the level of ambition implicit in this development, it would lead to a warming of 3°C degrees globally. We rate China's current policies as “Insufficient” to meet the Paris agreement’s 1.5°C limit, and are more consistent with a global warming of 3°C.
We earlier estimated China’s emissions to have risen by 3.4% to 14.1 GtCO2e in 2021 due to a large spike in energy demand but latest data shows it rose to 14.3 GtCO2e—this is concerning as power consumption has been projected to rise 5–6% in the upcoming year.
In 2020–2021, China began toning down its outlook on coal, highlighted by President Xi Jinping when he announced that China will strictly control coal consumption until 2025 and start to gradually phase it down thereafter. By the end of 2021, however, China had seemingly completely reneged on this strategy to focus on shoring up coal (and other fossil fuels) supply off the back of energy security and shortage concerns. China has also pledged to end financing for building coal plants overseas, with 2021 marking the first year since 2000 that China’s two global policy banks provided no new energy finance commitments to international governments. The pledge could result in the cancellation of 43 GW of new coal projects across Asia, including no new coal projects in countries such as Bangladesh and Sri Lanka.
In 2021, China produced its highest-ever annual output in coal production. The continued short and medium-term reliance on coal and fossils was emphasised in March 2022 in both China’s “Two Sessions”, the annual plenary sessions of two of China’s major political bodies, and the newly published 14th FYP for the energy sector.
However, renewable energy will also continue to be a national priority in parallel; installed capacity for renewables surpassed 1,000 GW in 2021. Energy from non-fossil sources in China needs to grow by around 13% by 2025 and 52% by 2030 (from 2020 levels) to achieve its FYP and NDC targets. China issued new renewable targets in 2022, aiming to generate 3300 TWh electricity from renewable sources by 2025, approximately 35% more than it did in 2020.
In the wake of the illegal and unprovoked Russian invasion of Ukraine, China is likely to double down even more on energy security with a multi-pronged approach: building domestic fossil and renewable production capacity at an accelerated rate and establishing a diverse portfolio for energy imports, both from the development of overseas projects and increase in (discounted) energy cooperation with Russia.
China’s Long-term Low Greenhouse Gas Emission Development Strategy (LT-LEDS/LTS) submitted to the UNFCCC in October 2021 strongly suggests that the carbon neutrality target covers carbon dioxide only; previously the CAT had analysed the target as if it covered all greenhouse gases as claimed by Xie Zhenhua and Tsinghua University. Due to the size of China’s emissions, this difference can make up to 0.1°C more (CO2) or less (all GHGs) warming in 2100.
The CAT keeps China with an overall rating of “Highly Insufficient”. China’s climate commitments in 2030 are also rated as “Highly Insufficient” as emission levels expected under the most ambitious NDC targets are compatible with warming levels of between 3°C and 4°C by the end of the century, if all countries followed this ambition. For the purposes of this rating system, we treat China's NDC commitment as unconditional, as it has not indicated a level of ambition that would be achieved with international support (a conditional NDC target).
To improve on its rating and become compatible with Paris Agreement’s 1.5°C limit China would need to reduce emissions as early as possible and well before 2030, decrease coal and other fossil fuel consumption at a much faster rate than currently planned, and set clear phase-out timelines. China’s updated NDC update is only a slight improvement from its first NDC and does not result in an improvement in the CAT’s rating; China needs to adopt more ambitious medium-term climate targets to match its long-term net-zero goal.
According to our analysis, China is expected to overachieve its NDC targets under its current policy projections. We have revised our projections to incorporate the latest policy developments and analysis. We project China’s GHG emissions levels will be at 13.4 to 13.9 GtCO2e/year in 2030, an increase of 22% to 26% from 2010 levels.
The CAT keeps China’s policies and action rating as “Insufficient”. Current policy projections closely match China’s modelled domestic pathways consistent with global warming of over 2°C and up to 3°C by the end of the century (if all countries had this level of ambition). This rating takes into account that international support is needed for only a fraction of the policies and actions China needs to take to be consistent with the 1.5-degree limit.
China announced that it will “strictly control coal consumption” over the next 14th Five-year Plan (FYP) period (2021–2025) and “will phase down coal consumption” over the 15th FYP period (2026–2030), and has kept emphasis on its continued efforts to peak carbon emissions before 2030 and reach carbon neutrality before 2060.
However, China’s yearly coal output reached its highest ever level in 2021, while consumption also grew by 4.7% after the country experienced an increase in energy demand (relying on coal). As a result, the CAT estimates that emission levels in 2021 rose to 14.1 GtCO2e, a 3.7% rise from 2020. China plans to add an additional 30 GW of coal in 2022 and a total of 180 GW by 2030 from 2020. The outlook on coal is primarily driven by increasing concerns of energy security, highlighted by the widespread power shortages experienced in 2021.
Renewable energy installation continues to be a national priority amidst the NDC targets of an updated non-fossil share (25% by 2030) and renewable (solar and wind) capacity (1,200 GW by 2030), which are supplemented by domestic renewable targets to make up half of the country’s installed capacity by 2025. China’s 14th FYP on energy pledges that 39% of electricity in 2025 will be generated from renewable resources.
In industry, China's aluminium sector had initially targeted a peak in carbon emissions by 2025, with a 2025 peak target for the steel sector, and a cement sector peak target of 2023. However, the discussed targets have not been officially adopted, and the steel sector’s carbon peaking date has now been delayed.
Chinese Ministry of Industry officials have also raised the national new energy vehicle (NEV) sales target from 20% to 25% in 2025. China’s LTS stipulates that 40% of new vehicles sold by 2030 would be NEVs, with authorities suggesting this be raised to 100% by 2035. China’s EV stock will need to make up over 65% of the entire car fleet and sell its last fossil fuel car by 2040 to be compatible with the 1.5°C temperature goal.
Under China’s NDC targets, the country’s emission levels would reach between 13.4 to 14.7GtCO2e/year in 2030, an increase of 22% to 33% from 2010 levels.
The CAT keeps China’s domestic target rating in 2030 as “Insufficient”, indicating that its 2030 domestic targets need substantial improvements to be consistent with the 1.5°C temperature limit. China is due to overachieve its updated NDC targets with existing policies and developments, an indication it could further raise its commitments. If all countries were to follow China’s approach, warming would reach over 2°C and up to 3°C. This rating takes into account that China would need international support for a fraction of the policy actions required for it to be consistent with the 1.5°C limit.
China’s emission levels under its NDC commitments are substantially higher than what would be deemed 1.5°C compatible compared to our “fair share” approach, resulting in our unchanged fair share rating of “Highly Insufficient”.
The “Highly insufficient” rating indicates that China’s NDC target in 2030 leads to rising, rather than falling, emissions when compared to its fair share and is not in line with any interpretation of a fair approach to meeting the 1.5°C temperature limit. If all countries were to follow China’s approach, warming could reach over 3°C and up to 4°C.
This rating takes into account the fact that China has effectively submitted an unconditional NDC target but has not indicated a level of emissions that would be achieved with international support (a conditional NDC target). In any event, the present level of unconditional commitment falls substantially short of the commitment that would be consistent with China's fair share contribution to meeting the Paris Agreement's goals.
China’s President Xi Jinping first announced China’s commitment to reach “carbon neutrality before 2060” in a declaration at the UN General Assembly in September 2020. China has since officially submitted a long-term strategy (LTS) to the UNFCCC in October 2021. As the LTS submission does not meet the majority of our criteria for a best-practice approach in LTS formulation, we keep China’s net-zero target evaluation as “Poor”.
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