Current Opinion

Carefully selected insights and analysis from China’s thought leaders on climate change and the low-carbon transition

The trends in methane emissions in China’s energy sector align with the emissions dynamics and spatial distribution of coal and oil and gas sectors

Teng Fei, Professor and Deputy Director of the Institute of Energy, Environment and Economy, Tsinghua University 

Our team’s research shows that China’s energy methane emissions experienced rapid growth from 2011 to 2013, followed by a decline from 2014 to 2016, and then stabilized from 2016 to 2020. Methane emissions and intensity peaked in 2014, and emissions intensity decreased by 20% from 2014 to 2020. These trends are consistent with the emission dynamics and spatial distribution in the coal and oil and gas sectors. 

The temporal shifts in methane emissions from the energy sector are primarily driven by coal methane. Over the past decade, many coal mines have been closed in China. Due to the significantly higher emission factors of closed mines compared to those of active mines, methane emissions from abandoned mines (AMM) far exceed existing research estimates. This increase contributed to the peak in energy-related methane emissions in 2014. Meanwhile, coal production has shifted to regions with lower gas content, such as Inner Mongolia and Xinjiang, resulting in a nationwide reduction in the average emission factor for coal and a subsequent decline in methane emissions and intensity after 2014.  

Methane emissions from the oil and gas sector, however, have continued to increase. Between 2011 and 2020, shale gas production increased significantly, and the number of cross-border oil and gas pipelines expanded under the Belt and Road Initiative, resulting in a notable increase in the number of oil and gas facilities in operation. The methane emission intensity of shale gas production is more than twice that of conventional natural gas and is gradually accounting for about 35% of China’s total methane emissions from natural gas. As a result, the average methane emission intensity of natural gas exploration and production increased by 26%. In addition, imported pipeline gas has become the second largest source of methane emissions in the oil and gas sector, with long-distance international transport exacerbating the average emission intensity of pipeline transport. 

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To establish a diverse New Collective Quantified Goal (NCQG) in climate finance, countries should engage in more in-depth discussions and consultations

Wang Yi, Vice-Chair of China’s National Expert Panel on Climate Change

Negotiations on the New Collective Quantified Goal (NCQG) at the 29th Conference of the Parties on Climate Change (COP29) are confronted with diverse financing needs and a lack of a sustainable financial order and governance framework for the various sources of finance. Countries should work together to establish a multi-layered collective climate finance framework and global financing model based on existing international climate rules, with developed countries taking primary responsibility for emission reductions. This can be achieved through various approaches, including reforms of multilateral development banks (MDBs), debt-for-climate swaps, and sustainable financial governance, to facilitate the mobilization and integration of climate finance. In addition, ongoing discussions are essential to address various issues related to the management of funds. 

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Despite the EU’s restrictive measures, there is still potential for cooperation between China and the EU in the electric vehicle sector

Wu Zelin, Associate Researcher, Institute of International Relations, Shanghai Academy of Social Sciences

Despite the EU’s incentives for its domestic electric vehicle industry and restrictions on imports from abroad, there are still opportunities for cooperation. First, China can improve communication and consultation with the EU. On the one hand, cooperate on training in areas such as battery carbon footprint accounting standards and battery recycling, which would help the entire industry chain meet carbon emission requirements. On the other hand, continue discussions to address unfair trade barriers against China.   

Second, Chinese car companies can set up production factories in the EU or elsewhere. Even if the EU decides to impose tariffs on Chinese electric vehicles, China can avoid these tariffs by manufacturing components domestically and assembling them abroad. Some EU member states are also actively attracting Chinese carmakers to develop local supply chains and create jobs. In this context, Chinese companies may still retain a cost advantage.  

Third, promoting plug-in hybrids as flagship products for the EU market could serve as a breakthrough for China. 

Fourth, cooperation between Chinese battery manufacturers and EU car brands is crucial. As Chinese battery companies tend to have both scale and cost advantages, using Chinese batteries can reduce the cost and improve the competitiveness of EU electric vehicles, leading to a mutually beneficial outcome in the market.   

Finally, China should strengthen partnerships with EU carmakers for mid-to-high-end models, expanding its market presence with higher-quality products. 

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CCER may gain international recognition through carbon reduction cooperation mechanisms

Shi Weiwei, General Manager, Datang Carbon Assets Co.

International recognition of Chinese Certified Emissions Reduction scheme (CCER) is achievable. The International Civil Aviation Organization (ICAO) previously included the CCER mechanism in its list of qualified emission reduction mechanisms under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). It could potentially be re-included in the future, allowing international airlines to purchase emission reductions generated by the CCER mechanism for compliance, thereby expanding its international reach.  

Additionally, the CCER mechanism might gain international recognition through other avenues. For instance, two countries could establish an international emission reduction cooperation mechanism under Article 6.2 of the Paris Agreement, mutually recognizing the emission reductions from the CCER mechanism (as internationally transferred mitigation outcomes). This scenario is also a plausible path to international acknowledgment. 

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First Round of China’s National Carbon Market Expansion Underway

Since the “Report on the Work of the Government” published in March emphasized the need to “expand the scope of the national carbon market,” discussions and calls for expansion have intensified. In September, a consultation draft was released to initiate the first round of expansion, bringing the cement, steel, and aluminium industries into the carbon market. What implications does this hold for industries and carbon emissions trading? In this month’s issue, TTP will focus on the first expansion of China’s national carbon market.

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