China's wager on gas anyone? Questioning the wisdom of Gas Investment as a Short-term Strategy for China.
In China, natural gas continues to play a significant role in the country's energy transition, offering a cleaner alternative to coal but still posing emissions challenges. The nation currently exports 12 billion cubic metres (bcm) of gas to other provinces annually and plans to increase this by an additional 20 bcm every year from 2027.
China's demand for natural gas has surged in recent years, with consumption rising from 207.81 bcm in 2016 to 377.30 bcm in 2021, at an annual growth rate of 12.67%. Natural gas now accounts for 8.8% of the primary energy mix, up from 6.1% in 2016. However, domestic production has only increased from 136.87 bcm in 2016 to 215.55 bcm in 2021, leaving China with a growing import dependency that often exceeds 40%.
The government has supported the natural gas industry by promoting "coal to gas" projects and infrastructure expansion. Yet, challenges persist in logistics and infrastructure, which can constrain supply and slow the transition from coal. Moreover, China's energy transition is marked by conflicting priorities, as the government also promotes renewable energy and fossil fuel production, complicating efforts to achieve deeper emissions reductions and reach climate goals.
Natural gas is considered a bridge fuel due to its lower emissions compared to coal and oil, facilitating the shift towards cleaner energy while providing energy security. Despite rapid growth in wind and solar, natural gas (and coal) will likely continue to play a role in balancing the intermittency of renewables and meeting peak demand, especially as the grid modernizes and storage solutions mature.
However, the high import dependency exposes China to geopolitical risks and price volatility in global gas markets. Efforts to boost domestic production and diversify import sources are ongoing but have not eliminated these risks. The ongoing emissions, policy tensions, and infrastructure deficiencies present challenges for China's energy transition.
Looking ahead, natural gas will likely remain a transitional bridge fuel as China works to accelerate the deployment of renewables and modernize its energy infrastructure. The Chinese government is pursuing "dual carbon goals" to peak carbon emissions before 2030 and reach carbon neutrality before 2060. However, the higher cost and uncertain supply of natural gas make it an unnecessary detour in China's energy transition, especially in export-dependent provinces like Guangdong, Jiangsu, and Zhejiang, which face an uncertain future due to potential declines in power demand caused by trade wars and slowed exports.
In conclusion, natural gas continues to serve as a key component of China's energy transition, underpinning efforts to reduce air pollution. However, its role is complicated by supply vulnerabilities, ongoing emissions, and policy tensions between supporting renewables and maintaining fossil fuel security. Looking ahead, natural gas will likely remain a transitional bridge fuel as China works to accelerate the deployment of renewables and modernize its energy infrastructure.
- To achieve its 'sdg' goals, China is actively investing in renewable energy sources like wind and solar, but natural gas remains a significant part of its energy mix.
- The advancement of environmental-science reveals that while natural gas emits less carbon compared to coal and oil, it still contributes to climate-change.
- Science suggests that for China to achieve carbon neutrality and combat climate-change effectively, it must accelerate its transition from fossil fuels to clean energy.
- The global industry has recognized the importance of clean energy and is creating opportunities for financial investments in renewable energy projects.
- As part of the energy transition, policy-and-legislation is playing a crucial role in promoting renewables and discouraging fossil fuel production.
- Despite the challenges, some provinces in China, such as Guangdong, Jiangsu, and Zhejiang, are heavily dependent on exporting energy, including natural gas, affecting their transition to cleaner sources.
- The sector of real-estate cannot ignore the impacts of climate-change, thus, sustainable construction practices that utilize clean energy are becoming increasingly popular.
- The stock-market is also responding to the push for clean energy, with companies that invest in renewables seeing growth in their value.
- War-and-conflicts and political instability can create uncertainty in global energy markets, impacting the price of natural gas and other fossil fuels.
- In addition to carbon emissions, other sources of pollution like nitrogen oxides and sulfur dioxide are also addressable through the transition to cleaner energy sources.
- Accidents, particularly car-accidents and industrial incidents, often result in increased carbon emissions due to the burning of fossil fuels during emergency response and cleanup efforts.
- General-news outlets cover the progress of China's energy transition and its impact on the environment, politics, and the economy, both domestically and internationally.
- In the sports world, football teams and European leagues are also adopting sustainable practices, such as using renewable energy for stadium operations and reducing their carbon footprint.
