What is China’s ‘double carbon’ policy?

Business & Technology

China plans to reach peak carbon use by 2030 and become carbon neutral by 2060. The reality of the countryโ€™s commitment to economic growth may make that impossible, and certainly highly challenging in energy-intensive industries like cement and steel, but โ€œdouble carbonโ€ has since provided a slogan and a direction for Chinese government organizations and the private companies that seek to capitalize on government plans.

An automated production line of a technology company in Zhejiang Province. Xinhua/Xia Pengfei.

China plans to reach peak carbon use by 2030 and become carbon neutral by 2060. The reality of the countryโ€™s commitment to economic growth may, however, make that impossible.

Xรญ Jรฌnpรญng ไน ่ฟ‘ๅนณ first proclaimed Chinaโ€™s “double carbonโ€ objectives at the United Nations General Assembly in September 2020. Since then โ€œdouble carbonโ€ has provided an overriding slogan and direction for Chinese government organizations and the private companies that seek to capitalize on government plans.

With the main goals of increasing non-fossil energy consumption, improving energy utilization efficiency, and reducing carbon emissions, implementation of the โ€œdouble carbonโ€ policy has begun in earnest.

  • Various plans are being released for key areas such as energy, industry, construction, and transportation; as well as key industries such as coal, electricity, steel, and cement. The use of coal is planned to drop by more than 80% by 2060. A central role in the development of energy consumption in China is assigned to solar energy, which is expected to become the largest primary energy source by around 2045.
  • The government is promoting a range of green technologies such as wind turbines, solar panels, new energy vehicles, green building construction, and energy-saving products.
  • The government is supporting carbon financial product innovation, including carbon-neutral bonds and a carbon neutral index on the Shanghai Stock Exchange.

The Chief of CICC ไธญ้‡‘ๅ…ฌๅธ, a Chinese state investment bank, estimated that achieving carbon neutrality would require 139 trillion yuan ($21.21 trillion) until 2060, or about 2% of Chinaโ€™s annual GDP. The implementation of โ€œdouble carbonโ€ implies the gradual withdrawal of traditional energy systems and their replacement by new energy, but this is a long and arduous process of radical change that will require sustained commitment.

With Chinaโ€™s continued dependence on coal and government priorities for economic growth, double carbon may remain a slogan, rather than a reality.