Li Zheng | Adhere to the safe transformation and ensure the timely realization of the carbon peak ta
Speech Shorthand
Tsinghua PBC School of Finance Global Green Finance Forum
Li Zheng, Dean and Professor of the Institute for Climate Change and Sustainable Development at Tsinghua University:
It is a great honor to have the opportunity to participate in today's event. In the next 20 minutes, I will present to you the research conducted by our institute on the long-term transition path for China to achieve carbon neutrality.
I will discuss this from three aspects, starting with the current state of energy and emissions. Climate change has become not only a long-term and profound challenge for humanity, but also an urgent one that requires our immediate attention.
Last year's COP28 in the UAE elevated the global effort to address climate change to a new level. The famous UAE Consensus, targeting 1.5 degrees Celsius, calls for a just, orderly, and equitable transition of the energy system away from fossil fuels. With the goal of doubling global renewable energy by 2030, it's fair to say that the world has already taken action. Although negotiations on specific responsibility allocation are still ongoing, there is a general recognition that this is a long-term crisis requiring human cooperation.
For China, we have always been at the forefrontproductExtremely powerfulOn the road to energy transition, China's new energy and renewable energy development momentum is very rapid, and it reached a new level last year.。In 2023, China's total installed capacity of renewable energy reached 1.52 billion kilowatts, accounting for more than 50% of the country's total installed power capacity.Clean energy generation amounted to approximately 3.2 trillion kilowatt-hours, accounting for 34%.China has done tremendous work in the wind and solar energy industry chain, which accounts for a very high proportion.
However, due to my country's economic growth and various factors such as the pandemic and the international situation, total energy consumption and carbon emissions have increased. Last year, energy use reached 5.72 billion tons of standard coal equivalent, and the increase in carbon dioxide emissions from coal is still significant. But this is a temporary phenomenon, and China is already on the path of transformation. In fact, this is a race between coal and renewable energy at their peak; it's a matter of who has a slightly larger share. Although there will be some twists and turns on China's transformation path, the overall trend is very clear.
Coal is the main source of carbon dioxide emissions in my country. During the transition process, the supply of heat and electricity is the sole contributor to carbon dioxide emissions. From the demand side, the top five industries (steel, cement, chemicals, non-ferrous metals, and manufacturing) account for a high proportion. As industrialization is gradually completed and infrastructure construction is improved, these carbon emissions will gradually decrease.
In the second part, we will look at the energy transition path toward carbon neutrality.At the Institute for Climate Change and Sustainable Development at Tsinghua University, where I work, we have always focused on China's energy system. Therefore, we have established a combined bottom-up and top-down model for estimating energy transition pathways, enabling us to research the transition paths to carbon neutrality under the established climate goals. I will now present some of our research findings.
We believe that achieving carbon neutrality by 2060 primarily involves a long-term low-carbon transition path targeting 2 degrees and 1.5 degrees of carbon dioxide emissions as set by the Paris Agreement. This requires peaking carbon emissions before 2030, with a potential carbon dioxide surplus of 1.5 billion to 3 billion tons by 2050, and achieving net-zero emissions of all greenhouse gases by 2060. We believe carbon neutrality should be considered on a global economic scale, encompassing all greenhouse gases. The key balance here involves two aspects: first, by the time of carbon neutrality, carbon sinks should essentially offset non-CO2 greenhouse gas emissions; second, emissions from energy systems and industrial engineering should reach net-zero levels.
To achieve the above goals, the energy system must first be transformed through three approaches: improving energy efficiency, decarbonizing the energy structure, and carbon capture.
We estimate that primary energy consumption will plateau around 2035, with the focus now on continuously improving energy efficiency. From an energy efficiency perspective, energy intensity per unit of GDP should decrease by 25% by 2035 compared to 2020, and further decrease to 75% by 2060, thus placing us among the world's leading energy efficiency nations.
Simultaneously developing renewable energy and improving the energy structure are fundamental measures to achieve energy transition. By reducing carbon emissions through energy structure, the proportion of non-fossil energy will continuously increase; it should reach over 25% by 2030, 70% by 2050, and 80% to 90% between 2050 and 2060. This will result in energy-related carbon dioxide emissions decreasing by more than 80% by 2060 compared to 2020. Any remaining emissions will be offset through technological means. While increasing non-fossil energy, we must reduce the use of fossil fuels, including coal, oil, and natural gas, with a significant reduction in coal consumption. In the future, 80% to 90% of energy will be provided by non-fossil energy.
From the perspective of current technological availability, we may still use some fossil fuels, but there is still considerable uncertainty, depending on technological progress. Even if breakthroughs are achieved in long-term energy storage technology or nuclear fusion technology, the future remains uncertain. At the same time, non-fossil energy is growing rapidly. We estimate that for non-fossil energy to achieve carbon peaking and enter a rapid decline phase by 2030, wind and solar installed capacity needs to reach 3 billion kilowatts by 2030, 4.5 billion kilowatts by 2035, and even higher by 2050. This rapid growth of non-fossil energy, especially wind and solar, is a necessary condition for achieving carbon peaking and carbon neutrality.
As I mentioned earlier, due to safety concerns and technological needs, we may still need to use some fossil fuels. However, this energy consumption cannot emit carbon, so we need carbon capture and storage. The model projects that 1.89 billion tons of carbon dioxide will need to be captured by 2060 to address the difficult-to-reduce emissions from the industrial sector and the carbon emissions from the energy sector. Biomass negative emission technologies and direct air capture carbon emission technologies may be applied.
Significant changes are also needed on the energy consumption side. Currently, there are many types of energy used. To achieve carbon peaking and carbon neutrality, the electrification level of end-use energy needs to be greatly improved, which we estimate to be two-thirds, approximately 64% or 65%. Hydrogen and biomass energy need to reach a corresponding proportion, thus significantly reducing the amount of fossil fuels directly used in end-use sectors. From an electricity perspective, total electricity consumption is projected to reach 1.8 billion kWh by 2060, with approximately 3.4 trillion kWh of electricity used to produce hydrogen, generating about 86 million tons of hydrogen, the vast majority of which is green hydrogen. Green hydrogen is the correct way to utilize hydrogen. Hydrogen energy will play a crucial role in energy, industry, construction, and transportation, but how do we make this a win-win situation? In the long term, hydrogen is definitely needed, but in the details, this is a question that needs further discussion.
Biomass energy will be very popular in various industries in the future. We believe that by 2060, the consumption of biomass will be about 500 million tons of standard coal equivalent, which will be used for fuel, negative carbon emission and zero carbon fuel. Biomass will play a very important role in the future.
From a sectoral perspective, the industrial sector needs to accelerate its transformation. Therefore, the industrial sector must reach its peak emissions target by 2030. In the future, for industries with difficult-to-reduce emissions, such as heavy industry and chemicals, the utilization of hydrogen as a raw material will play a crucial role. In this area, low-carbon transformation mainly requires improving industrial and energy consumption structures, while simultaneously increasing energy efficiency. The necessary technologies are listed below, including energy conservation, electricity substitution, hydrogen energy, methanol, and so on.
We hope the building sector will peak around 2025, and must reach its peak before 2030. From the perspective of transformation and development trends, on the one hand, we need to control the amount of new buildings. On this basis, we will address the transformation of the building sector through electrification and various zero-carbon and low-carbon heating sources. Therefore, technologies such as electricity substitution, waste heat heating, solar-storage-DC-flexible energy transfer, and flexible building load will gradually develop. China has already begun to develop these technologies. For example, Tsinghua University is also considering how to achieve zero-carbon transformation of its campus and find efficient and low-cost methods to achieve low-carbon campuses.
The transportation sector needs to be electrified. Transportation, aviation, and shipping are sectors where emissions reduction is difficult. We have discussed many new technologies at today's meeting, and these are actually things that have already begun to emerge internationally, but have not yet been fully implemented. In the future, the carbon emissions from these sectors will remain relatively high.
The power sector is the most important sector because energy is used on a large scale and carbon emissions are also concentrated there. The power sector plays a more significant role in the decarbonization process than other sectors, bearing the responsibility for negative carbon emissions. The entire system is carbon neutral by 2060, but the power system needs to achieve carbon neutrality around 2055 and generate some negative emissions to provide support for sectors that have difficulty reducing emissions.
Non-CO2 greenhouse gas emissions are also very important. While CO2 accounts for about 85% of all greenhouse gas emissions, the remaining percentage, exceeding ten percent, comes from non-CO2 emissions such as methane and nitrous oxide, which are extremely difficult to reduce. Energy, agriculture, and waste emissions—these non-CO2 components—are particularly challenging to reduce. We hope that non-CO2 greenhouse gas emissions will peak simultaneously with CO2 emissions before 2030, stabilize and decline around 2035, and then enter a period of rapid decline.
In summary, China's energy transition path consists of three main aspects: first, supply-side decarbonization, aiming to increase non-fossil energy to 85%; second, consumption-side electrification, increasing from the current 26% to 64%; and third, zero-carbon electricity. While developing renewable energy sources for electricity, current security considerations necessitate the use of some fossil fuels. This portion must utilize carbon capture and storage (CFS), achieving negative carbon emissions through biomass-based CFS (BECCS) and direct air capture (DAC) technologies.
Today's theme is green finance. Green finance is crucial for promoting energy transition and offers new opportunities and economic growth potential for China, making it a very worthwhile endeavor. In conclusion, while the prospects for emissions reduction are promising, the challenges of achieving them are immense. Although I believe the overall trend is certain for the future, significant difficulties remain. Therefore, we must strike a balance between development and green transition, maintain strategic focus, and steadfastly develop renewable energy.
The final suggestion is that efforts to achieve peak carbon emissions by 2030 must be made in all regions...Industries and businesses need to take action and clearly define peak values and peak points so that everyone has a target and a meeting point.This is what I wanted to share with you all, thank you!