Insights Library

Browse TTP’s updates on the latest insights and analysis in chronological order below. 

Development of new energy vehicles stands as a crucial national strategy in China     

Ouyang Minggao, Academician of the Chinese Academy of Sciences 

The development of new energy vehicles stands as a crucial national strategy in China, based on considerations of oil security, air pollution, and industrial advancement. China is also a front-runner in automotive intelligence. Electric vehicles, with their inherent advantage in intelligence, outmatch traditional fuel-powered vehicles in terms of autonomous driving capabilities. 

New energy vehicles represent a technological ecosystem rather than a mere shift to electrification. This comprehensive system encompasses the essence of the Fourth Industrial Revolution and propels three fundamental transformations: electrification, intelligence evolution, and decarbonization.  

The realization of the three transformations aims to make China an automotive powerhouse. Beyond that, it involves not only domestic strategies but also global market integration, fostering thus upscale development.   

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Hydrogen energy project investment speeds up while green hydrogen policy needs to be strengthened    

Liu Xueye, Project Lead for Green Economics & Yang Li, Senior Program Director for Energy Transition, Institute of Global Decarbonization Progress (iGDP)

After analyzing hydrogen energy policies and major projects listed by 28 provinces from 2020 to 2023, iGDP had the following findings: first, during the past four years, investment in hydrogen energy listed in major projects of each provincial region has accelerated, with an overall increase of three times. 

Second, hydrogen production projects make up a small percentage of the total, in which green hydrogen manufacturing projects are predominant. However, there is a lack of sufficient policies and guidance for related segments. 

By categorizing these policies and projects, it was noted that China lacks unified national standards for defining green hydrogen, its technical pathways, and thresholds. The “Standards and Evaluation of Low-Carbon Hydrogen, Clean Hydrogen, and Renewable Hydrogen” group standard released by China Hydrogen Alliance in 2020 sets thresholds at 14.51 kg CO2e/kg H2 for low-carbon hydrogen, and 4.9 kg CO2e/kg H2 for clean hydrogen while renewable hydrogen requires renewable energy as the hydrogen source. These thresholds exceed the 3.4 CO2e/kg H2 set by the EU and Japan for green hydrogen.  

In provincial major project lists, we can find emerging hydrogen projects that utilize waste resources for production. These projects not only effectively utilize existing waste materials but also reduce land usage and the demand for renewable energy in hydrogen production processes. Therefore, incentivizing relevant technological innovations and effectively reducing greenhouse gas emissions, particularly carbon dioxide emissions, generated during hydrogen production processes, may be a key focus area for future hydrogen energy policies in China.   

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To reduce energy intensity, China will implement stricter measures targeting high-energy-consuming industries    

Yang Fan, Chief Policy Analyst, CITIC Securities 

The goal of reducing energy consumption per unit of GDP by 13.5% during the period of China’s 14th Five-Year Plan(2021-2025) now seems challenging to achieve, and it may not stay a rigid goal. It is anticipated that there won’t be a resurgence of “rushing to carbon peak”, but stricter measures will be implemented, especially targeting sectors with high energy consumption and pollution.

In the short term, reducing the proportion of the mining and construction industries, increasing the utilization of clean energy, and enhancing energy efficiency in traditional and high-energy-consuming industries are the three main focal points for reducing energy consumption this year.

Regarding long-term mechanisms, the expansion of the carbon market and the construction of a new energy system are expected to accelerate within the year. It is projected that the steel, electrolytic aluminum, and cement industries will be brought into carbon trading this year, and reforms in the electricity market are also expected to progress rapidly.

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New policy to boost the development of new energy vehicles in China’s state-owned automotive companies     

Zhang Yuzhuo, chairman of the State-owned Assets Supervision and Administration Commission of the State Council

From the perspective of state-owned asset management, a key focus is to encourage bold innovation in enterprises and remove institutional barriers that hinder high-quality development. For example, in the realm of new energy vehicles, state-owned automotive companies are not progressing swiftly enough. Therefore, we’re adjusting policies to separately evaluate the new energy vehicle business for three major central state-owned automotive enterprises (FAW Group, Dongfeng Motor Corporation, and Changan Automobile). We’ve noticed that despite the ongoing advantages of traditional fuel vehicles, there’s a global trend among automotive companies to implement new energy vehicles businesses, which requires heavy investment in the initial stage. If we only consider the immediate profits, this might slow down companies’ progress. Therefore, our policy aims to address this challenge by evaluating their technology, market share, and prospects in the future. 

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China’s storage market needs different types of products to meet varying duration requirements    

Huang Zhiguo, Deputy Director of the Integrated Energy and Dual Carbon Ccenter, CRRC Zhuzhou Institute

In the emerging energy storage sector, lithium batteries dominate the market. However, lithium batteries are only suitable for relatively short energy storage durations of 1 to 4 hours, so they struggle to meet the requirements of medium to long-term applications and can’t address some energy storage needs. Boosting research and technological advancement in energy storage products with varying durations and types is essential for the continuous development of the energy storage industry. We need to actively promote the large-scale application of energy storage across multiple time scales and the coordinated operation of diverse energy storage systems. For example, hydrogen energy (storage) is the most promising solution for long-term, seasonal energy storage. 

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Nuclear power should be treated equally with other non-fossil fuel energy sources in China’s green energy system   

Yang Changli, Chairman of China General Nuclear Power Group 

As a stable and reliable low-carbon energy source, nuclear is the only non-fossil fuel energy source excluded from China’s green energy framework. Such exclusion not only hinders the achievement of the nation’s “dual carbon” goals but also goes against the long-term prospects of the nuclear power sector. 

Nuclear power (in China) can contribute over 160 billion kilowatt-hours of electricity to the market per year, making it a significant green energy option. However, currently nuclear power firms are unable to furnish official certifications like green certificates, which hampers their ability to meet the growing social demand for green energy consumption. 

Moreover, the exclusion of nuclear power from China’s green energy system poses challenges to its market competitiveness. When purchasing nuclear power, entities responsible for renewable energy integration, such as grid operators, electricity retailers, and consumers, are still required to assume the same duties and quotas as when buying fossil fuel energy. This fails to acknowledge nuclear power’s contributions to emission reduction, thereby discouraging consumer enthusiasm for it. 

Incorporating nuclear power into the green energy framework is both necessary and feasible. The policy precedent of including hydropower in green certificates offers valuable insights for the integration of nuclear power. 

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China’s photovoltaic industry needs to maintain a steady and healthy growth in 2024    

Xing Yiteng, Director of New Energy Division, Department of New and Renewable Energy, National Energy Administration

The unprecedented surge in China’s photovoltaic (PV) installations in 2023 is an unusual (thus unsustainable) case stemming from various factors: a surprising drop in upstream prices in the PV industry, accelerated construction of power stations during the post-pandemic period, and the concentrated launch of large-scale wind and solar projects. This year, however, the foremost goal for the industry is to ensure stable and healthy growth, avoiding drastic fluctuations. As the second-largest contributor to China’s installed capacity, the PV industry shoulders greater responsibilities and faces mounting pressures. It needs to proactively adapt to the power system, prepare for greater participation in the electricity market on a larger scale, and explore effective mechanisms for integrating distributed renewable energy generation into the market. 

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Storage and Transportation are key to effective utilization of biomass energy  

Li Jingming, General Secretary of China Biogas Society 

Biomass energy plays an indispensable role in recycling waste resources, promoting circular development, protecting the environment and so on. By using mature technologies that already exist, biomass energy can be harnessed in various forms—solid, gas, and liquid—with applications spanning across diverse scenarios.  

The recently issued Opinions on Accelerating the Construction of a Waste Recycling System underscore the importance of establishing a robust system for collecting and transporting waste resources, which is key to the effective utilization of biomass energy. To ensure the good function of such a system, several problems need to be taken into consideration. For instance, it is crucial to link the straw collection and transportation system with downstream industries. Merely collecting and storing without effective utilization may lead to new issues and waste. Additionally, given the continuous and seasonal nature of waste resources, the collection and transportation system require periodic maintenance and equipment updates. 

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The diversity of risks and opportunities across sectors results in variation in the ESG disclosure landscape with distinct indicators  

Zhang Junjie, Professor of Environmental Science and Policy, Duke Kunshan University

ESG essentially helps businesses identify risks and opportunities in environmental, social, and corporate governance. As a result, ESG disclosures reflect strong industry characteristics, with risks and returns varying significantly across different sectors. 

Taking the power industry as an example, thermal power sector may encounter significant risks in the transition process prompted by tightening climate policies. However, within these risks lie opportunities, such as the expansion of renewable energy sources, implementation of smart grid technologies, and development of electric vehicles. Meanwhile, for companies in agriculture-related sectors, the primary risk stems from climate-related issues. Both long-term climate change and extreme weather events can pose challenges to production, supply chain stability, and market expansion. Thus, it is essential to consider to what extent information in ESG disclosure will influence the company and the whole society. 

If we can demonstrate that investment in ESG helps businesses improve their operational performance, aligning shareholder interests with those of other stakeholders, then debates over whether to prioritize ESG will no longer occur.  

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New energy vehicles will play an indispensable role in emissions reduction in the transportation industry after carbon peaking   

Liu Daizong, East Asia Director, Institute for Transportation & Development Policy

Like other sectors, emissions reduction in the transportation industry requires simultaneous efforts in three areas: reducing (unnecessary travel), transitioning (transportation modes), and improving efficiency. New energy vehicles mainly fall under the latter area. 

During the phase leading up to carbon peaking, namely before 2030, transitioning transportation modes and reducing non-essential travel will play a more crucial role. However, after 2030, during the transition from the “peak” to “zero”, new energy vehicles will play a significantly important role. Without new energy vehicles, it will be very challenging for the transportation industry to achieve net-zero emissions. 

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