Browse TTP’s updates on the latest insights and analysis in chronological order below.
November 13, 2023
Song Yingying, Chief Analyst, China Merchants Securities co. Ltd.
The implementation of the coal power capacity pricing mechanism marks a crucial step that will further stabilize industry’s anticipation and boost enthusiasm for power generation. With the rapid expansion of renewable energy, there is an urgent need for coal-fired power to play a supportive and regulatory role in order to ensure the security and stability of the electricity supply. Under the current single electricity pricing mechanism, coal power enterprises struggle to fully recoup their costs. Additionally, due to high coal prices in recent years, thermal power companies in general have experienced great losses, resulting in unstable industry expectations and a decline in the incentive to generate electricity. The introduction of the coal power capacity pricing mechanism comes at an opportune moment, offering an opportunity for power generation enterprises to recover a portion or all of their fixed costs, thereby stabilizing coal power profitability. In this way, the value of the thermal power industry is expected to be re-estimated.
November 13, 2023
Chen Meian, Hu Min, Institute for Global Decarbonization Progress (iGDP)
Ninety percent of China’s methane emissions from the energy sector originate from coal mining, whereas the number is lower than 30% in Europe and the U.S. The main emission of this kind is from oil and gas extraction. In China’s agriculture, methane emissions mainly arise from animal intestinal fermentation and rice cultivation. Notably, rice cultivation emissions exceed levels in the Europe and the U.S., while animal fermentation emissions are lower. Considering its unique circumstances, China’s newly published “Methane Emission Control Action Plan” (“Plan”) aims to strike a balance between methane emission control and the security of energy, food, industry and production.
If China were to implement key tasks under a new policy scenario, it would see a substantial decrease in methane emissions by 2035 – approximately 260 million tons of CO2e compared to 2022. Compared with a baseline scenario (no new policies), new policy measures would yield a cumulative reduction of about 2.3 billion tons of CO2e from 2022 to 2035. The “Plan” outlines varying types of emission reduction potential across different industries and measures, with the energy sector contributing 66% of the reduction, the agricultural sector 28%, and the waste sector 6%.
November 6, 2023
Chen Qiuhua, Vice President of Goldwind Science & Technology Co.,Ltd.
At present, cost reduction is a paramount concern in the wind power industry. But customers are not just looking for the cheapest turbines, they give higher priority to the most cost-effective turbines in terms of electricity generation throughout the entire life cycle. To ensure the optimal levelized cost of electricity, we need to make the turbines more affordable and increase power generation efficiency over the whole life cycle.
November 6, 2023
Hu Yucheng, Partner at Fresh Capital
From a long-term perspective, restarting the China Certified Emission Reductions (CCER) scheme is a positive development. CCER represents a significant incremental market: it raises emission costs of high-emission enterprises on one side, while providing additional income for new energy and low-carbon assets on the other, thus creating a positive cash flow.
As the CCER market becomes more standardized, it leaves no room for previous speculative projects. For example, forest carbon sinks are expected to be one of the main CCER projects. The types of forestry resources and their property rights will have clear requirements in the new methodology. However, not all forestry resources can effectively function as carbon sinks, and there have been irregularities in the market previously. Such speculative projects will not be recognized by the CCER scheme.
October 31, 2023
Institute of Environment and Sustainable Development in Agriculture
In recent years, although the rice planting area in China has fluctuated, the yield per unit of area of rice has continued to increase. At the same time, rice fields are also the main source of methane (CH4) emissions in China (187 Mt CO2e), accounting for 40.1% of the total methane emissions from agricultural activities in the country. Given that over 60% of China’s population relies on rice as their staple food, improving rice quality and ensuring an efficient supply are paramount prerequisites for the strategic shift towards low-carbon rice production.
Faced with future challenges related to climate change, rice supply, and the imperative to reduce emissions and increase carbon sequestration, the implementation of China’s low-carbon rice production strategy requires comprehensive consideration of both human interventions and nature-based solutions. Human interventions include variety selection, optimized irrigation, fertilization, and cultivation, as well as the collaborative development of bio-fertilizer products and high-efficiency machinery. Nature-based solutions primarily involve practices such as green manure planting and the implementation of diverse crop rotation systems to enhance biodiversity within the overall crop management and intensive rice production system.
October 31, 2023
Zheng Fei, Associate Professor, Institute of Atmospheric Physics, Chinese Academy of Sciences
The ongoing El Niño is still in the process of developing and is anticipated to be a powerful event, likely leading to other extreme climate events in the future. This year (2023), it is highly possible that the winter monsoon in China will be weak, resulting in elevated winter temperatures and an increased likelihood of air pollution in the northern regions. Conversely, in the southern regions, precipitation levels are expected to rise, accompanied by cooler temperatures. Furthermore, El Niño will have a more pronounced impact on its second year of formation (2024). Northern China may experience springtime drought, while the south of Yangtze River is at a significantly higher risk of extreme precipitation and flooding during the summer. This demands extra vigilance.
October 27, 2023
Pan Jiahua, deputy chair of China’s National Expert Committee on Climate Change
In the name of ensuring a stable energy supply, China still depends on fossil fuels. In 2022, we spent 3.03 trillion yuan on oil, costing 2.51% of our GDP. However, did this tremendous cost bring any employment opportunity or economic growth? Unfortunately, no, the expenditure just goes up in smoke. But if the money is invested in the production of photovoltaic modules, wind turbines, power batteries, automobiles, and heat pumps, there will be an immense potential for job creation and economic growth in these industries.
Moreover, from a security perspective, our dependence on oil constantly raises concerns. Is it available and affordable? Can we ensure a secure supply? These endless concerns have consumed great defense, diplomatic and financial resources. However, a pure electric vehicle only consumes 12 kWh of electricity per 100 km, which costs a mere 6 yuan at standard residential electricity rates. In contrast, a fossil fuel car requires 8 liters of oil per 100 km, amounting to more than 60 yuan. From 60 to 6, this can help improve people’s well-being significantly!
October 24, 2023
Institute of Public & Environmental Affairs (IPE)
While China will continue playing an important role in the global supply chain, some labor-intensive industries will be relocated to Southeast Asia and South Asia. Meanwhile, the extraction of raw materials related to the new energy industry is expanding into Africa and South America, posing serious challenges to local environmental regulations and infrastructure.
To avoid another round of pollution transfer and ecological destruction, it is essential to establish a sustainable global supply chain. The emission reduction commitments made by large enterprises and financial institutions need to be implemented in the core regions of the global supply chain. We also need to help emerging supply chain regions enhance their environmental management capabilities. By establishing regional and even global platforms for corporate environmental responsibility, we can strengthen the climate resilience of the supply chain and create a fair and competitive environment, thus building a global supply chain that is environmentally friendly, climate-friendly and eco-sustainable.
October 18, 2023
Tang Xiaoyang, Professor, Department of International Relations, Tsinghua University
China’s financing cooperation with Africa has demonstrated an “openness to possibilities” characterized by three main features: first, it is free of political preconditions. Second, it adopts pragmatic and diverse forms of financing, considering both the business requirements and national strategy. Third, its debt assessment mechanism puts more emphasis on the actual situation and the dynamic development potential, rather than following the standard based on a single development mode set by western financial institutions.
The difference on financing approaches between the “West” and China should not be taken as a simple competition between two political models, it actually reflects the divergence of perspectives on economic development. For African countries, comparing the two approaches may help them have a chance to think deeply about debt and adjust their policies. However, this does not mean taking sides, (…) The fundamental way out of the debt problem is still for African countries to form their own social consensus and lead all sectors and industries to make a concerted transformation.
October 16, 2023
Wang Huijun and his research team, Nanjing University of Information Science and Technology
Mei-yu is a unique summertime weather phenomenon in East Asia. In China, Mei-yu in the middle-lower Yangtze River valley (YRV) region is typically characterized by continuous rainy weather from mid-June to early July, significantly impacting agriculture, economy, and people’s daily lives. In the context of global warming, abnormal Mei-yu weather has led to severe meteorological disasters in recent years.
Over the past 60 years, there has been a noticeable increase in the number of rainless days, precipitation intensity, and the frequency and intensity of extreme rainfall events during the Mei-yu season in YRV region. The most pronounced trend was the increase in precipitation intensity. This suggests that with global warming, the weather during the Mei-yu season has become more unpredictable and extreme.
October 16, 2023
Zheng Ying, Invited Researcher at China Society of Automotive Engineers
Faced with increasing trade requirements for recycling rates and the use of renewable materials, Chinese battery manufacturers find it relatively manageable thanks to their existing work. However, calculating the carbon footprint within their supply chains is a task that departs from traditional production methods and is relatively unfamiliar to most companies.
On the other hand, carbon footprint standards and databases are still underdeveloped, both nationally and globally. This may be a unique opportunity for Chinese battery companies to take the lead or participate in carbon footprint standard setting, and thus increase their influence in the field of sustainable development.
October 12, 2023
Liu Gang, Zhan Fan and Deng Xiangzheng, Chinese Academy of Sciences
China’s food system emitted 2.4 gigatons of CO2-equivalent in 2019, half of which was emitted at the production stage. About 47.6% of the GHG emissions were attributed to CO2, 0.8 Gt CO2e to CH4, 14.1% to N2O and 4.2% to F-gases.
There were substantial differences in the emission structure and sources among the provinces. Further analysis indicated that the differences among provinces were caused by the separation of food production and consumption: people living in wealthier coastal and central regions consumed food from western and northeastern regions. Therefore, the government should consider interregional synergies when developing strategies to reduce food-system greenhouse gas emissions.
October 7, 2023
Chen Ying, Senior Research Fellow at Chinese Academy of Social Sciences
Influenced by the relationship between the U.S. and China, the issue of climate change often indicates the direction of bilateral relations. Historically, when China-U.S. relations are strengthened, climate change becomes an early area of collaboration. It can also serve as a litmus test of the sincerity and effectiveness of cooperation between the two countries. Despite efforts, executing substantial cooperation remains difficult and challenging between the two countries right now.
At present, relations between China and the U.S. are at an unprecedentedly complex phase. On the one hand, the U.S. calls for China’s cooperation in the field of international climate governance. On the other hand, it continues to apply pressure and containment measures against China – a stance that is logically inconsistent and unworkable.
September 25, 2023
Economic Daily Commentary
Digitalization and low-carbon development are key aspects of modern industrialization and play a crucial role in the current scientific and technological revolution. Digital technology has become an important driving force in improving the efficiency, quality and core competitiveness of the industrial sector, while low-carbon standards help adjust the direction of industrialization and promote the new technological revolution in emerging industries.
To achieve new industrialization, it is essential to promote the integration of digital technology into the real economy. It is equally important to accelerate the development of green industry and build a production system that is both environmentally friendly and resource-efficient.
September 21, 2023
Xie Zhenhua, China’s Special Envoy for Climate Change
Leaders from China, the US and the EU have all stressed the importance of ensuring the success of COP28. To that end, I have agreed with Kerry and Timmermans that we are committed to showing the utmost flexibility and constructiveness during this conference. Our goal is to find bridging solutions for some of the sticky issues that have arisen in the ongoing negotiations.
In the past two months, Kerry and I have held video conferences almost bi-weekly to discuss arrangements for our next meeting and the Climate Action Working Group. I also proposed to Kerry that I am willing to travel to the US for further discussions if needed, seeking to achieve positive outcomes for the benefit of all.
September 19, 2023
Zhu Yulong, Automotive Industry Analyst
Chinese companies were somewhat prepared for trade-related investigations as there were signals of growing pressure from the EU. Some Chinese EV manufacturers have already planned to build local manufacturing facilities in the EU to avoid potential anti-subsidy tariffs and to better meet the demands of the European market. Following the EU’s recent move to defend its own auto industry, although Chinese companies haven’t made an explicit statement yet, they will certainly accelerate their pace in establishing overseas factories.
Not only car manufacturers, but also Chinese EV battery manufacturers have long been planning to set up factories in Europe. In the future, both upstream and downstream players in the EV industrial chain will need to further localize their investments and operations in order to tap the European market.
September 16, 2023
Liu Jizhen, member of the China Academy of Engineering
We need to be clear that energy storage is not a panacea. Energy storage will have a limited role in the new energy system dominated by renewables. The real solution lies in building a coordinated power system that includes generators on the supply side, consumers on the demand side, and the grids.
Europe and the US have completed their energy revolution from coal to oil and gas, while China is still in a “coal-based energy era” – that is China’s national conditions. We must vigorously promote the clean transformation of fossil fuels, the scaling up of clean energy and the diversification of energy sources without ignoring our national conditions and current situation.
September 14, 2023
Pan Jiahua, deputy chair of China’s National Expert Committee on Climate Change
As China’s economy is in dire need of growth drivers after the pandemic, a misinterpretation has arisen that the “dual carbon” targets should be put aside to make way for economic growth. This misinterpretation is based on the thinking that the fossil fuel industry can promote growth because it is highly capital-intensive, while “dual carbon” is an environmental protection task which is an investment without any return.
I have to say, this kind of thinking has failed to keep up with the times! The transition from conventional to new industries is itself an economic growth path. Compared to fossil fuels, the manufacturing of renewable energy equipment, energy storage, and end-use energy equipment has a longer industry chain, which can create more jobs and have more growth potential.