China unveils green transition guidelines amid global energy challenges

In a move towards a sustainable future, China has launched guidelines to accelerate the green transition across all areas of economic and social development. The plan aligns with global efforts to address climate change, as highlighted in BP's Energy Outlook 2024, which stresses the urgent need to shift from fossil fuels to low-carbon energy sources.

Issued by the National Development and Reform Commission (NDRC), the guidelines provide a roadmap for China to achieve progress in its green transition by 2030. By 2035, the country aims to have established a green, low-carbon, and circular economy, with the goal of "Beautiful China" basically achieved.

These guidelines come at a time when global energy consumption patterns are under intense scrutiny, with BP's report revealing that despite increasing investments in low-carbon energy, global carbon emissions continue to rise.

China's green transition goals

The guidelines outline a multifaceted approach, including optimizing territorial space development, promoting green transitions in the industrial and energy sectors, and advancing green transportation and urban-rural development. Key goals include increasing non-fossil energy to 25 percent of total consumption by 2030 and expanding the energy conservation industry to 15 trillion yuan (about $2.1 trillion).

In July, the Nanjing's Maqun Bus Depot completed a solar PV project with 1,770 rooftop panels. Operated by Nanjing Public Transport, the project generates green electricity for the depot's operations, with surplus power fed into the grid. This initiative reflects a commitment to environmental goals and marks a key step in integrating public transport with renewable energy, fostering sustainable urban development.

Liu Qiong, director of the National Energy Conservation Center at the NDRC, emphasized the comprehensive nature of these guidelines. "Incorporating sustainability into every aspect of development and promoting this transition across all sectors and regions is key to enhancing China's development strengths and building a more competitive modern economy," he said.

The guidelines also target the green transition in consumption, encouraging people to adopt green and healthy lifestyles. They aim to boost green consumption by expanding government procurement of green products and promoting trade-in programs for new energy vehicles and green home appliances, especially in rural areas.

"The green transformation in the consumption sector still requires coordination across various stages, from the source to the process and end point," Liu added. "This will require further institutional and policy reforms to boost the vitality of green consumption."

Urgent need for a low-carbon shift across the globe

China's green transition efforts are set against the backdrop of a complex global energy landscape. According to BP's Energy Outlook 2024 published in July, the world is currently in an "energy addition" phase, where both fossil fuels and low-carbon energy sources are being consumed in increasing amounts.

Spencer Dale, BP's chief economist, highlighted the challenges of transitioning from this phase to an "energy substitution" phase, where low-carbon energy would grow rapidly enough to reduce the consumption of fossil fuels and curb carbon emissions.

"The world is in an 'energy addition' phase of the energy transition, consuming increasing amounts of both low-carbon energy and fossil fuels," Dale explained. "The challenge is to move – for the first time in history – to an 'energy substitution' phase, where low-carbon energy increases sufficiently quickly to allow the consumption of fossil fuels, and with that, carbon emissions, to decline."

Despite growing investments in renewable energy, global carbon emissions have continued to rise at an average rate of 0.8 percent per year over the past four years, according to the report. This trend raises concerns, as the carbon budget estimated by the Intergovernmental Panel on Climate Change (IPCC) could be exhausted by the early 2040s, making it difficult to limit global temperature rises to 2°C above pre-industrial levels.

China, as a major consumer and producer of energy, plays a crucial role in the global energy landscape. The BP report suggests that China's energy demand will peak in the mid-to-late 2020s and then decline by 2050 under both the current trajectory and net zero scenarios.

This anticipated shift reflects the country's broader trends in energy consumption and the ongoing transition towards renewable energy. The guidelines emphasize the importance of financial instruments and investment mechanisms in supporting green projects. The extension of carbon emission reduction support tools until the end of 2027, along with the development of green financing options, demonstrates China's ongoing efforts to advance its green transition.

However, the NDRC acknowledges that challenges remain. China's energy structure is still heavily reliant on coal, and fossil fuels continue to play a significant role in the economy. Moreover, global environmental and climate issues are becoming increasingly politicized, with green trade barriers escalating.

Any successful and enduring transition needs to address all three elements of the energy trilemma: security, affordability and sustainability, Dale noted. "The longer it takes for the world to move to a rapid and sustained energy transition, the greater the risk of a costly and disorderly adjustment pathway in the future."

As the world faces the complex challenges of energy transition, China's actions could significantly influence the trajectory of global energy consumption in the coming decades.