The carbon reduction action plan released by the State Council on Wednesday signals a clear energy-saving roadmap and timeline, experts said on Thursday.
They highlighted that the relaxation of the requirement on the utilization rate of new energy may create about 74 gigawatts of new installations, bringing multiple benefits to key sectors.
The National Development and Reform Commission, China's top economic regulator, said that despite the significant progress made in advancing energy-saving technologies and carbon reduction, China's green transition is behind schedule for 2021-25, due to factors like the COVID-19 pandemic, making the task of meeting the binding targets essential this year and the next.
The plan outlines that by the end of this year, energy consumption and carbon dioxide emissions per unit of GDP should decrease by around 2.5 percent and 3.9 percent, respectively.
Non-fossil energy is expected to weigh around 18.9 percent in total energy consumption by the end of this year, with key industries expected to achieve energy savings equivalent to about 50 million metric tons of standard coal and reduce carbon dioxide emissions by about 130 million tons.
By 2025, the proportion of non-fossil energy consumption should increase to about 20 percent of the total mix, the plan said.
"The plan demonstrates China's strong commitment to a green transition despite challenges," said Jin Li, vice-president of the Southern University of Science and Technology. "It highlights several key issues to be addressed, including optimizing the energy structure, upgrading industries and transforming energy consumption patterns. It calls for dealing with problems like reliance on fossil fuels, low energy efficiency and outdated production methods and technologies in some industries."
To tackle these problems, the plan proposes specific solutions, including reducing fossil fuel consumption, increasing non-fossil energy use and implementing energy-saving and carbon-reduction actions in energy-intensive industries like steel, petrochemicals, construction and transportation. It also calls for refining policies and increasing financial support to facilitate China's green transition.
"This action plan signals further development opportunities for sectors like decarbonization of fossil fuels, new energy, energy storage, environmental protection, green buildings and electric vehicles," Jin said.
Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, echoed this sentiment. "The increasing share of new-energy installations already had a substantial impact on the grid due to its volatility and instability. Recent favorable policies are actively promoting the consumption of new-energy electricity, which will drive the development of multiple segments like energy storage and green power trading."
China Galaxy Securities analysts said that the action plan's stipulation that the utilization rate of new energy should be lowered from 95 percent to 90 percent in resource-rich areas, could create about 74 GW of new-energy installation space. They predicted that this demand could potentially increase China's photovoltaic installation scale in 2024-25.
The plan offers guidelines on healthier industry development by raising the entry requirement of new nonferrous metal projects. The analysts said low-quality silicon production capacities may be gradually eliminated, benefiting companies with cost and technology advantages in silicon materials and batteries.
Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said emission reductions need a stable mechanism that allows various industries to improve energy efficiency and also gain benefits from the process.
Beyond the new-energy sector, the application of low-carbon technologies in high-energy-consuming sectors like green buildings will also see broad development opportunities.
Charlie Zheng, chief economist at Samoyed Cloud Technology Group, said, "Under higher energy-efficiency and environmental standards, small-scale steel, cement and nonferrous projects may be gradually phased out, thus driving the upgrade of industry equipment manufacturing."
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