At the United Nations General Assembly this September, President Xi pledged that China would achieve carbon neutrality by 2060, with domestic carbon emissions peaking in 2030. Being the biggest carbon emitting country (~30% of global share), China will likely need to set much higher green energy targets in the coming five years in order to reach their goal1.
China's previous target for 15% renewable contribution was achieved in 2019, and China has continued moving toward a cleaner energy structure, with coal's share in energy consumption declining to about 58% in 2019 from over 70% a decade ago2. After aggressive investments and policy support in past years, Chinese companies today dominate the manufacturing and deployment of key technologies in solar, wind and renewables, but more will be needed to reach net zero (Fig 2). Carbon emissions per unit of GDP are on a clear downward trend over the past decades, and looks set to trend further downwards in the future given China's strong commitment. The national carbon emissions trading system, which has been piloted in 7 provinces and municipalities since 2011 and is expected to be the world’s leading carbon trading system3. Carbon emissions trading should incentive businesses to lessen emissions and further green their businesses, and should in turn be supportive of the clean energy technologies that will be needed in the transition.
Another promising green trend is the growth of the electric vehicle (EVs) market due to the tightening emission standards. EVs now account for around 5% of total car sales in China, and the government targets 25% EV penetration in new cars sold by 20254. China has also launched a wide range of “green” finance instruments since 2016, including green bonds, loans, shares, development funds and insurance products. The Chinese green bond market, with total outstanding bonds of USD 140 billion at end-2019, is now the world’s 2nd largest, and 6th most active by issuance. Meanwhile, mandatory Green Credit Guidelines have mobilized banks’ support of green loans, which is now a vast RMB 11 trillion outstanding at the end of Q2 2020.