In the context of global carbon neutrality, clean energy is regarded as the core solution to the climate crisis and the green engine of economic recovery in the post-pandemic era.
At present, China has entered the late stage of the "14th Five-Year Plan" and is about to enter the "15th Five-Year Plan" period, which is a critical period to achieve the "double carbon" goal. In the context of global climate governance after COP28,China's clean energy industry is not only facing a window of opportunity for development, but also has to deal with the dual challenges of international and domestic realities, and needs to continue to make efforts in overall diplomacy, industrial policy, technological innovation, modernization and energy securityAchieve the healthy and rapid development of the clean energy industry, help promote a just green transition, and coordinate climate change, high-quality, safe and sustainable energy.
The 28th Conference of the Parties (COP28) to the United Nations Climate Change Conference, which concluded on December 13, 2023, adopted a final agreement calling on countries to:"Reduce the energy system's dependence on fossil fuels in a just, orderly and equitable manner, and accelerate action in this critical decade to achieve science-based net-zero emissions by 2050".。The agreement also calls for a twofold increase in global renewable energy capacity by 2030Accelerate research and development of technologies such as carbon capture and storage to help achieve emission reduction targets. The agreement is seen as the "UAE Consensus" for countries to accelerate climate action this decade. The consensus explicitly proposes to "phase out" fossil fuels such as oil, gas and coal, and is widely regarded as a milestone for the first time since the 2015 Paris Agreement. Due to the large differences in energy structure, emission reduction gaps and actual positions, there were contradictions and controversies in the language of fossil fuels and emission reductions, and the final agreement was reached after several rounds of negotiations and extensions. For COP28, China stressed its shared commitment to the objectives and principles of the Convention and its Paris Agreement. In terms of pragmatically promoting a just green transition, China advocates avoiding a "one-size-fits-all" target, which should be based on each country's national conditions, capabilities, development stage and resource endowment. This not only demonstrates China's pragmatic commitment to the Paris Agreement, but also reflects China's wisdom in exploring a green, low-carbon and sustainable development path suited to its national conditions. In the face of the upcoming carbon peak and carbon neutrality goals by the middle of this century, COP28 and the evolution of the global climate governance and energy pattern driven by COP28 will also bring new opportunities and challenges to China's clean energy industry.
Opportunities in the window of the global climate agenda
In the post-COP28 era, China's clean energy industry has ushered in a window of opportunity for the global climate agenda, which is mainly manifested in the following three aspects:
First, we need to promote global climate governance. Since the Paris Agreement, the international situation of global climate governance is undergoing profound changes. First, China-US competition and cooperation have entered a new stage. As the two largest economies and greenhouse gas emitters, China and the United States are deeply influenced by their cooperation and actions on climate change, and the changing dynamics of US-China competition and cooperation are crucial to global climate governance. From China-US climate cooperation under the global climate governance process led by Obama, to the comprehensive regression of Trump's withdrawal from the Paris Agreement, to Biden's goal of reshaping the US global leadership and playing the "climate card", China needs to be both cooperative and contained. In this context, China has taken practical actions to reduce emissions independently to achieve its commitment to carbon neutrality and carbon peaking, which provides development space and momentum for the domestic clean energy industry. Ahead of COP28, China and the United States jointly issued the Sunshine Country Statement on Strengthening Cooperation to Address the Climate CrisisIt was decided to launch the "Task Force on Strengthening Climate Action in the 20s of the 21st Century", which will focus on areas of cooperation including energy transition, methane, circular economy and resource use efficiency, low-carbon sustainable states and cities, deforestation, etc. This sends a positive signal for China and the United States to restart cooperation and jointly tackle climate issues. The second is the shift in Western countries' climate policy toward China. The EU and most European countries are largely consistent with the US position in the security, political, and major economic fields. In recent years, Western countries' policies toward China have been mainly affected by the Russia-Ukraine conflict, the European energy crisis, and the great power game between China and the United States. Germany and France uphold the principle of pragmatism in their China policies, while Britain has "left the EU" but its China policy is still greatly influenced by the United States, while southern Europe's China policy is basically more friendly, while Central and Eastern European countries have a more complicated attitude toward China. The main reason is that, on the one hand, Biden has repaired and expanded alliances through "values diplomacy", and has surfaced some easing towards China. On the other hand, Western countries, out of their own economic and trade needs, have returned to rational consideration of the impact of "decoupling" from China on their economies. March 2023, European UnionUrsula von der Leyen, the chair of the committee's relationship with China, said that "there is a need to focus on risk reduction, not decoupling", and US politicians have repeatedly mentioned "de-risking". France, April 2023The Institute of International Relations (IFRI) released a report entitled "China and the United States: An Unbalanced EU", arguing that the EU cannot abandon China according to the will of the United States, but must develop its own industries and find allies in the wider region. The G7 summit in May 2023For the first time, the communiqué introduced the phrase "de-risk" on China: "Our policy approach is not intended to harm China and does not seek to hinder China's economic progress and development." We have not decoupled or turned inward, while recognising that economic resilience requires de-risking and diversification." July 2023 GermanyThe China Strategie clearly states that "China is both a partner, a competitor and a systemic adversary", stresses that it will not seek "decoupling" from China but "reduce dependence" in economic and trade matters, and emphasizes cooperation in areas such as climate change, biodiversity, and energy transition. On the whole, the China policies of the United States and Western countries have shifted from confrontation and prevention to "decoupling", to downplaying "decoupling" and emphasizing "de-risking", that is, maintaining cooperative relations with China on the premise of protecting their own interests and competitive advantages. With the change of the United States' attitude towards China's competition and cooperation, European countries have unanimously demanded that China make greater contributions to greenhouse gas emission reduction, while turning to a rational and pragmatic attitude towards China, which has created an international agenda and a window of policy incentives for the development of China's clean energy industry.
Second, domestic policy support has been strengthened. First, the "dual carbon" goal has been clearly put forward as the goal and guidance of the "14th Five-Year Plan". On September 22, 2020, at the 75th session of the United Nations General Assembly, China proposed that "carbon dioxide emissions should peak before 2030 and achieve carbon neutrality before 2060". ThereafterThe goal of "carbon peak and carbon neutrality" has been written into the work report, the "14th Five-Year Plan" and the outline of the long-term goals for 2035All departments and levels** have formulated the 14th Five-Year Plan and local climate action policies under the guidance of the "dual carbon" goals. The report of the 20th National Congress of the Communist Party of China made it clear that we should actively and steadily promote carbon peak and carbon neutrality, based on China's energy and resource endowment, adhere to the principle of establishing first and then breaking down, implement the carbon peak action step by step in a planned manner, further promote the energy revolution, strengthen the clean and efficient use of coal, accelerate the planning and construction of a new energy system, and actively participate in global governance to address climate change. The second is to comprehensively formulate guiding documents and vigorously promote the energy revolution and energy transition. In November 2021, the National Energy Administration and the Ministry of Science and Technology jointly issued the "14th Five-Year Plan for Scientific and Technological Innovation in the Energy Field".The overall goal of energy science and technology innovation before 2025 is proposed, and the relevant centralized research, demonstration test and application promotion tasks are determined around advanced renewable energy, new power system, safe and efficient nuclear energy, green and efficient fossil energy development and utilization, and energy digitalization and intelligence. In March 2022, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly issued the 14th Five-Year Plan for Modern Energy SystemIt is clear that by 2025, the proportion of non-fossil energy consumption will increase to about 20%, and the proportion of non-fossil energy power generation will reach about 39%. In October 2022, 9 departments including the National Energy Administration jointly issued the "14th Five-Year Plan for Renewable Energy Development".It is clear that by 2025, the total consumption of renewable energy will reach about 1 billion tons of standard coal, accounting for about 18% of primary energy consumption; Renewable energy generates 3Around 3 trillion kilowatt hours, wind and solar power generation has doubled. It can be said that from the first to all departments, the energy transition and the modernization of the energy system during the "14th Five-Year Plan" period have been accurately arranged, providing perfect policy incentives and institutional guarantees for the accelerated development of China's clean energy industry.
Third, new drivers of energy technology innovation. The world's energy transition is accelerating in an all-round way, with major breakthroughs in emerging technologies in the fields of renewable energy, unconventional oil and gas, nuclear energy, energy storage, and smart energy, and the proportion of non-fossil energy is rising. In terms of renewable energy and power systems,The United States and Europe have explored the realization of advanced renewable energy-friendly grid-connection, energy storage, hydrogen energy and fuel cell technology test demonstration. In terms of unconventional oil and gas technologies,The U.S. is leading the shale gas technology revolution and achieving a new situation of equal emphasis on conventional and unconventional oil and gas. At the level of traditional nuclear energy technology and energy security,The United States, Russia, France and other countries are focusing on breakthroughs and innovations in the new generation of nuclear energy technology. At the level of cross-integration of informatization and intelligence,The United States, Europe, Japan and other countries have laid out the cross-integration of traditional energy technology and new information and transportation technologies, and advanced information technologies such as big data, Internet of Things, and artificial intelligence have been deeply embedded, and energy-transportation-information infrastructure has realized network interconnection. These technological advances and experiences will provide China with a development model worthy of reference and a reserve of innovative resources for technology introduction and localized application. Strengthening international cooperation in energy can accelerate the experimental application of new technologies in multiple scenarios and jointly promote the green and low-carbon transformation of energy. In the past decade, China has initially established an energy science and technology innovation system, and the energy technology revolution has made important phased progress, and China's clean energy industry will have the opportunity to make breakthroughs in technology research and development and product innovation to enhance its competitiveness. In the past three years, China has made significant technological progress and breakthroughs in the field of clean energy, including 13 key areas such as solar power generation, wind power generation, extra-large hydropower generation, advanced nuclear power, clean and efficient thermal power generation, and interaction between new energy vehicles and power grids. By the end of 2022, the proportion of non-fossil energy consumption in China reached 175%, renewable energy ** capacity reached 121.3 billion kilowatts. As of the end of June 2023, the number of new energy vehicles in the country reached 16.2 million. In 2023, China made many innovative achievements in the efficient use and green transformation of traditional energy sources such as coal, oil, natural gas, nuclear power, and hydropower, and achieved technological breakthroughs in emerging energy technologies such as wind power and solar energy.
The dual challenges of the international situation and domestic realities
Although China's clean energy industry is facing many opportunities after COP28, it is also facing the dual challenges of complex international and domestic situations.
First, at the level of the international situation, the competitive pressure of advanced technologies has increased, and the impact of geopolitics and value conflicts are still continuing. First, with the expansion of the global clean energy market, China's clean energy industry will face competitive pressure from all over the world, especially those developed countries with advanced technology and strong capital strength. United StatesBiden** promulgated the Bipartisan Infrastructure Law (BIL) in 2021 and the Inflation Reduction Act (IRA) in 2022, which involves expanding the domestic clean energy market in the United States and vigorously stimulating the "reshoring" of related manufacturing industries. European UnionSince the energy crisis in 2021, combined with the impact of the Russia-Ukraine conflict, the "RepowerEU" plan was launched in 2022 in an effort to get rid of dependence on Russian fossil energy, especially natural gas imports. In 2023, the EU will release the Green Deal Industrial Plan (GDIP) to deal with the unfair competition in the new energy industry caused by the US IRA, and prevent the relocation of local new energy companies in the EU by strengthening investment in the manufacturing capacity of net-zero emission technologies. These measures have undoubtedly brought great pressure to export enterprises in various countries, and this series of bills has had a chain reaction, triggering the control and competition for the clean energy industry chain among major economies, and bringing huge challenges to the global industrial chain layout of China's clean energy industry, manufacturing industry going overseas and international market share. The second is the uncertainty of the US policy on global climate governance, the erosion of the "principle of common but differentiated responsibilities", and the encirclement and suppression of climate ethics. Whether the U.S.-China climate cooperation can open a new chapter is still being challenged by domestic political changes in the United States. Although the China-US Sunnyland Statement brings hope for the future of China-US climate cooperation, there is still great uncertainty about whether the specific cooperation can be finally implemented. The year 2024 will also bring greater volatility to the U.S. climate policy toward China, but both the Democratic and Republican parties are consistent in their China policy, that is, to prevent China's rise from threatening U.S. hegemony. The political symbolization of climate governance has made the United States not give up on eroding the "principle of common but differentiated responsibilities", such as bypassing the Paris Agreement and forming small multilateral organizations and rules such as the "Net Zero** Initiative", "Climate Club", and "Global Methane Reduction Commitment", and concocting the "Ending China's Developing Country Status Act" and other targeted actions, which may accompany China-US climate cooperation for a long time and constrain China's climate action. As the world's largest developing country, China has made remarkable achievements in global climate governance and clean energy transition, but for a long time to come, it will still face climate ethics encirclement, accusation and pressure from the United States and the West and their leading international organizations around issues such as "just transition" in the context of global climate governance.
Second, at the domestic level, the development of the clean energy industry is still constrained by technical bottlenecks and market failures, and energy security and sustainable clean energy transformation need to be comprehensively considered. First, at the level of technological innovation, there are technical bottlenecks in China's new energy industry, and the market mechanism needs to be improved. Although China has made remarkable achievements in the field of clean energy, there are still shortcomings in some core technologies, and it is necessary to further increase investment in scientific research, improve market mechanisms, and break through technological bottlenecks. On a technical level,Due to the large volatility of new energy, in the context of the large-scale development of new energy, whether the power generation of new energy can be accepted and stored by the power gridThere are still problems in land space, grid-connected consumption, technological innovation, system cost, etc., and there are still deficiencies in key technological innovations such as energy storage, hydrogen energy, and electronic control technology with power semiconductors, chips, and software as the core. The core of the new energy industry is the power system and the power system, and the flexibility of the power grid has become the core bottleneck restricting the new power system and the new energy industrial revolution. In the context of the "dual carbon" goal,The practical way out to solve this problem mainly depends on breakthroughs in hydrogen energy, energy storage and intelligent technology, as well as the "trinity" of collaborative solutions. In addition, the development and reuse of new energy equipment will also bring huge environmental challengesHowever, at present, the level of industrialization of equipment is still relatively low and needs to be further strengthened. At the market level,The market mechanism of the new energy industry is not perfect, and there are still problems such as the rapid decline of subsidies, the unreasonable electricity price mechanism, disorderly competition, and the risk of overcapacityContinuous reform and innovation in policy, technology, market and other aspects are needed. Second, at the level of energy strategy, the clean transformation of China's energy industry should consider the balance between national energy security. At the heart of the COP28 consensus that will bring about a shift in global climate governance is the global withdrawal of fossil fuels such as natural gas and coal between now and mid-century. In recent years, China has actively promoted the transformation of the energy structure, reduced its dependence on fossil energy, and increased the proportion of clean energy. However,Even if the proportion of non-fossil energy consumption is reached by 2025, about 80% of it will still rely on traditional energy. However, China's energy dependence on foreign countries is still high, especially the external dependence on natural gas is more than 70% and 40% respectively. Therefore, changes in geopolitics and international relations, regional premiums, changes in transportation routes and other factors will continue to affect the stability of energy imports. In the future, responding to a possible energy crisis and ensuring sufficient oil, gas and coal will also be the focus of energy securityFor example, promote energy, strengthen energy cooperation along the Belt and Road, and promote energy import cooperation with Central Asia and Russia; accelerate the green and low-carbon transformation of energy, and promote the transformation of domestic coal, ** and natural gas industries to improve quality and efficiency; strengthen energy reserves, optimize and improve oil and gas storage and transportation capacity; Support the domestic supply of fossil energy, stabilize the long-term coal agreement**, and ensure people's livelihood needs; Strengthen international policy cooperation and support RMB energy pricing and settlement.
At present, China has entered the late stage of the "14th Five-Year Plan" and is about to enter the "15th Five-Year Plan" period, which is a critical period to achieve the "double carbon" goal. In general, in the context of global climate governance after COP28, China's clean energy industry is facing a window of opportunity for development, and also has to deal with the dual challenges of international and domestic realitiesIt is necessary to continue to make efforts in overall diplomacy, industrial policy, technological innovation, modernization and energy securityAchieve the healthy and rapid development of the clean energy industry, help promote a just green transition, and coordinate climate change, high-quality, safe and sustainable energy.
Author: Li Yangyang (Institute of International Science and Technology Relations, Postdoctoral Fellow).
*: Chinese Academy of Science and Technology Development Strategy.
Editor: Chen Meishan.
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Company Profile
Zhonghe Carbon (Beijing)** gathers professional resources from all walks of life to conduct in-depth research on the deployment of "carbon peak and carbon neutrality", and actively serves and supports major national strategies. Through field visits, special training, summit forums, exhibitions, industrial consultations and other forms, we will explore the development direction of new energy, the construction of industrial parks, the construction of carbon trading market system, major scientific and technological breakthroughs, green finance, green agriculture and other issues under the background of carbon peaking and carbon neutrality, and provide services and intellectual support for the development of local enterprises and institutions.