Event Summary: “CHINA: Carbon Neutral by 2060 – Innovation” – Energy Post
Here are the highlights of our 2-day 4-session workshop “CHINA: Carbon Neutral by 2060 – Innovation”, compiled by Sara Stefanini. It’s a quick and efficient way for readers to see the main points made by our expert panellists. Held at the end of May, it was the fourth of our EU-China workshops since the first was held in November 2020, produced for the EU China Energy Cooperation Platform (ECECP). As always, leading speakers from the EU, major companies, think tanks and academics took part, with live audience Q&A at the end of each session. Commercial participants came from Shell, Total Energies, Scania, Air Liquide, Schneider Electric, Danfoss and more. The first session is the plenary, followed by Renewables, Grid Balancing and Storage, and Co-operating in China. To access the full videos, full summaries and all the presentation slides, click here.
Day 1: Tonic for the Transition (opening session)
Viktorija Kaidalova
Head of Section, Foreign Policy Instrument, Delegation of the European Union to China
Chunping Xie
Policy Fellow at the Grantham Research Institute on Climate Change and the Environment, London School of Economics
Zhonghua Xu
VP, Head of TotalEnergies R&D for Asia and National Chair for Energy Working Group at the EU Chamber of Commerce in China
Simon Göss
Energy & Climate Analyst, Co-Founder at Carboneer
China’s energy transition
CCUS and carbon removal prospects
Innovation priorities
Government policies and goals
Technology innovation, cooperation and clear government policies are needed to push both China and the European Union towards their targets for net zero emissions by 2060 and 2050, respectively.
The two major energy markets, and emitters, are approaching the challenge from different starting points.
Europe’s electricity market is already well integrated, allowing for higher renewable energy integration even without huge power storage capacity. The EU Emissions Trading System has seen ups and downs, with policy interventions driving price swings and uncertainty, but it has fundamentally driven emission reductions in the industries that trade on the market.
The EU’s carbon border adjustment mechanism, along with the RepowerEU package of policies proposed in response to the war in Ukraine, will serve to further reduce fossil fuel use in the bloc, and especially reliance on Russian oil and gas.
The development of carbon capture storage and use facilities is beginning to pick up in Europe too, although still in its early stages. The EU is now looking at developing a bloc-wide transport system that would allow CO2 emissions captured in one country to be piped to and stored in another.
China is starting from further behind, with a power sector dominated by coal, growing power demand and a less integrated national power market that limits the amount of renewables that can be integrated into the grid.
Innovation will be crucial to China’s energy transition, including carbon capture for industrial sectors and power plants and the expansion of the country’s new national carbon market to industries. Digitalisation, green hydrogen, electric vehicles and long-term energy storage will also be needed in China to increase renewables use and meet growing energy demand while reducing fossil fuel use.
Day 1: Renewables
Xing Zhang
Centre for Research on Energy and Clean Air
Zhenyu Tong
Business Development and Sales Manager, Novozymes
Mickael Naouri
Public Affairs Director, Power-to-X, Air Liquide
Renewables growth
Transport and heavy industry technologies
The role of coal
Policy needs and challenges
Innovation priorities
China is driving a renewable energy boom, yet the dual priorities of cutting emissions and ensuring energy supply risks keeping coal dominant in the long-term – unless other technologies step in to fill the gap.
Low- and zero-carbon technologies such as green hydrogen, power-to-x, biofuels and biogas offer the potential to decarbonise hard-to-abate sectors such as heavy duty transport and steel, can offer energy storage for intermittent renewables, and can help reduce air pollution and waste.
Hydrogen, for example, could help bridge an east-west divide that risks pushing Chinese provinces to develop new coal-fired power plants for their own energy supply security. The problem is that western China has more renewable energy resources, while eastern China has the bigger demand hubs. Hydrogen can store the clean power and be transported over long distances.
Biogas, meanwhile, offers a low-tech solution to produce renewable gas, make use of wastewater and food waste, and reduce methane emissions.
The key for China is to take a centralised and systemic approach to this transition, rather than allowing different provinces and developers to take diverging routes. The government needs to incentivise fossil fuel power plants, especially coal, to become backup suppliers for renewables, and stop provinces from building new coal plants that risk becoming stranded assets.
Day 2: Grid Balancing & Storage
Octavian Stamate
Counsellor for Energy and Climate Action, EU Delegation to China
Guido Dalessi
CEO, Elestor B.V.
Walter Boltz
Senior Advisor on European Energy
Anders Hove
Project Director, Sino-German Energy Transition Project at GiZ
Battery storage
Vehicle-to-grid technology
Electric vehicle benefits
The energy transition
The clean energy transition will require greater flexibility – and that calls for energy storage solutions.
A power system based on renewable energy is possible, but it comes with much greater intermittency than fossil fuel power, over days and seasons, depending on the location. Different types of technologies will be needed for different applications and different markets.
The exponential growth of electric vehicles, both in China and the European Union, offers a number of climate action benefits. In China, the shift to electric vehicles is already reducing air pollution, including in cities where coal-fired power remains dominant, and air quality will continue to improve over time.
In the longer term, electric vehicles could also offer a smaller option for improving flexibility, by feeding power into the grid when they’re not being used. This could only involve a tiny portion of passenger cars – or only commercial vehicles such as school buses and food delivery trucks – but it would still benefit the market.
Flow batteries, consisting of large tanks and membrane stacks, are an emerging technology that could offer long-duration energy storage and replace fossil fuel power plants. Excess power generated from the batteries could be turned into hydrogen and transported.
Crucial to these technologies growing, however, is policy support, including a clear roadmap for developers and subsidies to encourage the uptick.
Day 2: Co-operating in China
Luc Lui
GM of Corporate Alliance and Digital Ecosystem, Schneider Electric
Dongye Zhang
China Country Manager, Shell Offshore Wind
Alfred Che
Vice President, Danfoss China
Clean and efficiency energy solutions
Level playing field in China
Differences between Europe and China
China is a huge and growing market for new clean energy technologies, as the country works to reach climate neutrality by 2060 while developing new sectors such as digitalisation.
This creates opportunities and space for European majors to bring their innovation and expertise to China, to develop technologies such as floating offshore wind or district heating and energy services connected to data centres and wastewater treatment facilities.
Natural, economic, political, cultural and market conditions are different in China – it is important for multinational companies to learn, adapt and work with Chinese businesses, cities, experts and policymakers so as to thrive in this market.
Understanding these differences, and being able to demonstrate real-world examples of how their innovation works – such as a data centre supplying heat to Danish households – as well as estimates of the opportunities offered, can help international companies bring added value to China’s endeavours.
Summary compiled by Sara Stefanini
ECECP is funded by the European Union