China Briefing, 10 February 2022: ‘Green’ Olympics; Steel industry instructions; Beijing-Moscow energy deal

§ Snapshot

New analysis published by Carbon Brief has examined how Beijing attempts to power the Winter Olympics 2022 with 100% “green” energy. The assessment found that the event has accelerated the renewable energy development of the co-host city of Zhangjiakou, which now has more renewable capacity than most countries in the world.

Meanwhile, the Chinese authorities have issued new “guiding opinions” on the nation’s iron and steel industry. The document stipulates that the industry should “ensure” to peak its carbon emissions “before 2030”. The timeline has been perceived as a “delay” or “dial-back” as the previous target was 2025.

Elsewhere, Beijing and Moscow unveiled a new gas deal last Friday, which would see Russia boosting its natural gas exports to China by “a quarter”, Reuters reported. The newswire described Moscow’s move as “bolstering an energy alliance with Beijing” while Chinese officials said the agreement “provides a new guarantee” for its “dual-carbon” goals.

§ Key developments

Analysis explains how Beijing runs Olympics on ‘green’ power

WHAT: The Winter Olympics 2022 in Beijing – which China has said would run solely on “green” electricity – has accelerated the development of the renewable energy infrastructure of the co-host city of Zhangjiakou, a Carbon Brief guest post has found. Situated some 110 miles northwest of the Chinese capital, Zhangjiakou has seen rapid installations of wind and solar capacity – so much so that the city’s renewable energy capacity now dwarfs that of many countries – the analysis discovered. It noted that Zhangjiakou is also home to a “pioneering” renewable energy grid, which uses high-voltage direct current to transport locally generated wind and solar power to Beijing users. The analysis is written by Carbon Brief’s guest contributors, Lauri Myllyvirta and Xing Zhang from the Centre for Research on Energy and Clean Air (CREA). 

HOW: The analysis showed that the total electricity consumption from the start of the preparation to the end of this Olympics would be about 400 gigawatt hours (GWh) and that the organisers had reportedly purchased 237GWh of renewable power by the end of 2021. This indicates that the electricity use at the venues during the games themselves would be 160GWh or so. The analysis pointed out that the wind and solar power generation in Zhangjiakou during the 17 days of the Winter Olympics is due to be around 2,300GWh, more than 10 times the venues’ projected electricity use. 

‘LEGACY’: According to the article, China’s renewables push for the Olympics would benefit Beijing’s low-carbon energy transition in the long run. It noted that the renewable electricity grid is projected to continue providing Beijing with about 10% of the capital’s annual electricity consumption every year – or around 14 terawatt hours (TWh) – after the games. But the analysis also highlighted China’s “continued reliance” on coal power as the coal-fired power plants in and near Beijing have been instructed to be ready to supply power if needed.

‘CARBON NEUTRAL’: The analysis came as Beijing’s efforts to make the Winter Olympics 2022 “carbon neutral” attracted wide attention. One particular talking point has been the “tiny” Olympics flame at the opening ceremony. The flame was “subject to plenty of ridicule outside the mainland by viewers who expected the usual giant cauldron”, the South China Morning Post reported. However, according to the team behind the ceremony, the design was aimed at saving fuel and showing China’s determination to cut emissions, according to Beijing-based Bing Dian Weekly. The director of the ceremony, Zhang Yimou, a renowned film director, told China’s state news agency Xinhua that the inspiration came from a “low-carbon and environmental concept”. In the meantime, some international media outlets, such as Associated Press, Reuters and Quartz, shone a spotlight on the technology of using carbon dioxide (CO2) as a refrigerant for the games.

‘FAKE’ SNOW: The debate over Beijing’s 100% dependence on artificial snow has continued. Several international outlets raised concerns over the past week. CNN described human-made snow as “incredibly resource-intensive”, while the New York Times called it “the environmentally unfriendly secret of winter sports”. Time said the International Olympic Committee’s selection of Beijing “raises questions about how sustainable the Winter Olympics are”. The Washington Post ran an opinion piece titled: “The Beijing Olympics’ snow problem is more serious than you think.” In comparison, Chinese state media has praised Beijing’s snow-making technology. The Global Times reported that “high-quality, green man-made snow is a feature of the Beijing Winter Olympics”. Chinanews.com said that the organisers were using surface water and “green” electricity to make snow, which “will not cause a burden to the environment”. Furthermore, the Science and Technology Daily reported on Beijing’s “highly efficient utilisation of snow”.

China issues ‘guiding opinions’ for iron and steel industry

WHAT: Three central government agencies – namely, the Ministry of Industry and Information Technology, the National Development and Reform Commission and the Ministry of Ecology and Environment – jointly issued “guiding opinions” on the nation’s iron and steel industry on Monday. The document says that it aims to promote “high-quality growth” of the industry, which it describes as being a “foundation” and “key” to China’s “green, low-carbon development”. (“High-quality growth” is a social and economic development model proposed by China’s president Xi Jinping in 2017, which prioritises quality and benefits over scale and speed.) The document is not to be confused with the industry’s carbon-peaking “implementation plan”, which is expected to be released this year. 

HOW: The “guiding opinions” instruct the iron and steel industry – the largest coal consumer in the country – to employ “innovative” technologies and “control” its total production. They also direct the industry to carry out its “green” and “low-carbon” transition in a “coordinated” way. In particular, they order the industry to “ensure” that it will peak its carbon emissions “before 2030”. The timeline is different from the targets previously set by a national industry association. The China Iron and Steel Association (CISA) said last March that the industry would aim to peak its emissions “before 2025”. It also said that “by 2030”, the industry’s emissions should be 30% lower than the peak level. (Last week’s China Briefing explained the importance of “guiding opinions” in China’s governing system.)

TARGETS: The document also lists a series of quantitative targets to be met “by 2025”. For example, it directs the industry to complete “super-low-emission” renovations for more than 80% of its production capacity, reduce its “comprehensive energy consumption” per tonne of steel by more than 2% and cut water consumption by more than 10%. It also stipulates that more than 15% of the crude steel production should come from electricity-powered furnaces.

MEDIA COVERAGE: Some Chinese media outlets have interpreted the 2030 peaking target as a “delay”. Jiemian News reported that the draft of the “guiding opinions” had directed the iron and steel industry to “attempt to take the lead and achieve carbon peaking by 2025”. Wang Guoqing – director of the Lange Steel Information Research Centre in Beijing – told the website that the change was to “prevent overreaction” and “ensure safe carbon reduction”. The 21st Century Business Herald reported that the timeline was “delayed by five years” compared to the draft. Xu Xiangchun – director at Shanghai-based commodity information provider My Steel – told the newspaper the fact that the final document did not stress peaking emissions ahead of schedule was “beneficial” for the industry to reduce emissions “orderly”. Internationally, Bloomberg said that Beijing had “quietly scaled back its ambition to cut carbon emissions from the giant steel industry”.

ANALYSIS: Zhong Shaoliang – chief representative of the World Steel Association’s Beijing Office – told Carbon Brief that the 2030 peaking target in the document “does not mean that the Chinese government intends to delay the carbon-peaking time of the iron and steel industry”. He said that, instead, the government set a looser time range “out of consideration for the amount of steel economic development would require and the progress of the development of decarbonisation technologies”. He noted that ​the move​ could also prevent steel companies from setting “overzealous” or “unrealistic” goals purely to peak their emissions. Zhong added: “My personal view is that, based on the trend of China’s demand for steel before 2030, the industry’s actual peaking time is highly likely to be before 2025. However, under the 2030 target, steel companies will be able to formulate more scientific, sensible and orderly low-carbon development strategies.”

§ ​​Other news

RUSSIA-CHINA: Russian president Vladimir Putin unveiled new oil and gas deals worth an estimated $117.5bn (£86.6bn) with China as he met with his Chinese counterpart Xi Jinping in Beijing last Friday, Reuters reported. The newswire described Russia’s agreement to the 30-year gas contract as “bolstering an energy alliance with Beijing amid Moscow’s strained ties with the West over Ukraine and other issues”. It noted that the gas deal would boost Russia’s natural gas supply to China by “a quarter” by delivering 10bn cubic metres of extra gas every year through a new pipeline from Russia’s far east to China. 

REACTION: Putin was quoted telling Xi that “our oilmen have prepared very good new solutions on hydrocarbon supplies to the People’s Republic of China” and that “a step forward was made in the gas industry”. Le Yucheng, China’s deputy foreign minister, told state media following the Xi-Putin meeting that the gas deal was “yet another significant and symbolic collaboration in the energy sector” between the two countries’ businesses. He said the agreement “provides a new guarantee” for China’s aim to achieve its “dual-carbon” goals.

48BN: The contract was signed by Russia’s Gazprom – which has a monopoly over the country’s natural gas exports – and China’s state-owned China National Petroleum Corporation. Gazprom said that “as soon as the project reaches its full capacity”, Russia would supply China with 48bn cubic metres of gas per year through the new pipeline and the “Power of Siberia” system. (The “Power of Siberia” network is not connected to pipelines that send gas to Europe, Reuters said.)

MORE GAS: China and Russia are discussing four more gas pipeline projects, according to Liu Qian, executive deputy director from the Centre for Russian and Central Asian Studies at the China University of Petroleum in Beijing. Liu told China Chemical Industry News that those projects included “Power of Siberia 2”, which would connect Russia with China via Mongolia. He also mentioned a far eastern route from Russia’s Vladivostok to China – which the latest gas deal is presumed to be part of – and a yet-to-be-constructed western route connecting Russia’s Siberia with China’s Xinjiang. The last out of the four, according to Liu, was a “supply boost” to the “Power of Siberia” system to bring up its annual exports from 38bn to 44bn cubic metres.

COAL: China’s state economic planner, the National Development and Reform Commission (NDRC), said on Tuesday that the country’s coal production during this year’s Lunar New Year holiday had increased, compared to last year’s Lunar New Year holiday. It said that the coal storage in power plants had reached 165m tonnes during the period, a 40m-tonne year-on-year increase. The news came as China’s Zhejiang province announced it had approved the construction of two “major pillar” coal-fired power projects with a combined investment of 12.9bn yuan (£1.5bn).

PRICES: Also on Tuesday, Bloomberg reported that “China’s dependency on coal is likely to worsen this year as the authorities struggle to rein in prices after the Lunar New Year break”. It added that the country had mined “more than 4bn tonnes” of coal “for the first time” last year and expanded its coal production capacity by some 300m tonnes to tackle power shortages. A day later, China’s state economic planner and energy regulator said that they had jointly held a meeting to ensure the stability of coal prices, according to an official release.

§ Extra reading

• Clean energy transition to fuel growth for China’s rare earths sector in 2022 – Avery Chen and Camille Erickson, S&P Global Market Intelligence
• World to China: Time to step up on climate – Ryan Heath, Politico
• Cooling towers, fake snow: What the Beijing Winter Olympics says about climate change – Joe Lo, Climate Home News
• China’s pledge to end overseas coal support yields mixed results in Serbia and Bosnia – Jelena Prtoric, China Dialogue

§ New science

A large but transient carbon sink from urbanisation and rural depopulation in China
Nature Sustainability

A new study has analysed the potential impact of urbanisation and rural “depopulation” on the carbon neutrality goal in China. It found that, although urban expansion caused an initial “aboveground” carbon loss of 20m tonnes during 2002–10, urban greening “compensates” these original losses with an overall balance of 30m tonnes of carbon in urban areas during 2002–19. The paper also showed that a maximum increase in “aboveground” carbon stocks was observed at “intermediate” distances – between two to four kilometres – to rural settlements. Dr Tong Xiaowei from the University of Copenhagen, a corresponding author of the paper, told Carbon Brief: “We explore[d] the relationship between tree growth and rural-urban migration in China which can help us [understand] how urbanisation, together with ecological restoration, can release human pressure from the environment and lead to tree growth, which is important for reaching carbon neutrality in China and other countries.”

Climate change and CCS increase the water vulnerability of China’s thermoelectric power fleet
Energy

A new paper has found that changes in the availability of water resources due to climate change may impact the “vulnerability” of China’s electricity generation. The study found that “many” plants in China are already experiencing water scarcity, adding that 120–176 GW of capacity would be “exposed” to water scarcity for at least one additional month per year in the 2030s. It also found that, in the absence of carbon capture and storage (CCS) technology, the national “usable” capacity of coal-fired power plants would increase “slightly”. However, the paper said that the addition of CCS – which requires more water – would “significantly” exacerbate water vulnerability, leading to further reductions of 7–8% in “usable” capacity. Yi Jin, a PhD candidate at Leiden University in the Netherlands and the paper’s lead author, told Carbon Brief: “The electric power sector has become the second-largest water user in China, following irrigation. Water availability is, therefore, a key component of China’s power production.”

Beggar thy neighbour? On the competitiveness and welfare impacts of the EU’s proposed carbon border adjustment mechanism
Energy Policy

New research has evaluated the “competitiveness” and “welfare impacts” of the EU’s proposed carbon border adjustment mechanism (CBAM) on both EU and non-EU countries. It found that the programme would lead to a “redistribution of competitiveness” among countries and regions. It estimated that the “burden” would be distributed “unevenly” among regions, with China, Russia and India being the hardest hit. Specifically, the study conducted sub-national-level analysis on China, which showed that income losses in landlocked provinces would exceed their export losses, while trade-exposed provinces would see an opposite pattern. Dr Pei Jiansuo, an associate professor at the Renmin University of China, the paper’s corresponding author, told Carbon Brief that looking forward, “a more pressing issue is to identify an economically effective, WTO [World Trade Organization] -compliant and equitable policy design”.

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