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National Emissions Trading Kickoff
By Lu Yan  ·  2021-11-05  ·   Source: NO.45 NOVEMBER 11, 2021
Students hold up their handcrafted posters on ecological protection in Xingtai, Hebei Province, on June 3 (XINHUA)

Yang Zhongyong, a farmer in Anji, a county known as the Kingdom of Bamboo in Zhejiang Province, would never have dared to imagine making money out of "thin" air. But this actually became a reality through the bamboo forest he had grown.

At the price for carbon quotas announced at China's national carbon market in Shanghai on its opening day of July 16, Yang stood to gain more than 370,000 yuan ($57,831) from the carbon emission trading of his bamboo forest.

According to calculations, the average annual carbon emission reduction per hectare of a bamboo forest is about 6 tons. Yang's land can reduce over 7,045 tons of carbon dioxide under his contract period.

He went on to use the quota as a pledge to secure a bank loan by the end of July. After receiving the loan, he hired a construction team to repair the roads running across his land—which had been wrecked by a recent typhoon.

"These actions enable bamboo forest managers to improve land quality, reduce carbon emission and increase income; it makes the ecological value of the forest become tangible. It subsequently has a demonstrative significance for bamboo production areas across the country," said Wang Jingxin, a professor with the Land Academy for National Development at Zhejiang University.

The start of trading in the national carbon market emerged as the country's latest endeavor in realizing its goals of peaking carbon dioxide emissions before 2030 and achieving carbon neutrality before 2060, objectives announced by President Xi Jinping at the general debate of the 75th Session of the United Nations General Assembly on September 22, 2020. Xi further stated that China would be scaling up its Nationally Determined Contributions (NDCs) by adopting more vigorous policies and measures.

In October, China released a white paper documenting the country's progress in mitigating climate change, and sharing its experiences and approaches with the international community.

"Led by the green economic and social transition, China is focusing on the green and low-carbon development of the energy sector, and accelerating the formation of industrial structures, production modes, ways of work and life and spatial configurations that help to conserve resources and protect the environment. It is fully committed to high-quality development that prioritizes eco-environmental protection and a green and low-carbon way of life," the document announces.

People ride shared bikes at a park in Shenyang, Liaoning Province, on June 24 (XINHUA)

Greener outlines 

As the largest developing country, with a population of over 1.4 billion, China faces major challenges across an array of vital areas. These include economic development, improving the people's lives, pollution control, and eco-environmental protection, according to the white paper titled Responding to Climate Change: China's Policies and Actions, released by the State Council Information Office.

"It will not be easy for China to achieve its new NDC targets," as it will take approximately 30 years of painstaking efforts to transit from peaking carbon emissions to achieving carbon neutrality, making the largest reduction in carbon dioxide emissions per unit of GDP (carbon intensity) in the world, the white paper says. In order to meet its targets in response to climate change, the government has implemented wide-ranging strategies, regulations and actions.

For example, the response to climate change has been incorporated into national economic and social development plans. Slashing carbon intensity by 18 percent from 2020 to 2025 is set as a binding target in China's Outline of the 14th Five-Year Plan (2021-25) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035, blueprints for the world's second largest economy as it kicks off a new journey toward realizing its full potential.

To meet the targets, national- and regional-level government work groups have been established with the tasks of responding to climate change, as well as conserving energy and reducing emissions.

Energy-intensive and high-emission projects are put under scrutiny. During environmental inspections earlier this year, inspection teams found that several regions were failing to rein in energy consumption and emissions. The construction of a production line for raw materials used in cement with a daily capacity of 6,600 metric tons in Jiujiang, Jiangxi Province, for example, had commenced without having previously passed the related energy conservation tests, according to an inspection report. The local development and reform commission failed in its supervisory responsibility by not discontinuing the project and, as a result, the partly completed production line had been in operation until the problem was exposed.

In the same vein, Henan was urged to speed up the phasing out of coking capacity as the province optimizes an industrial structure that in some areas is still dominated by smokestack industries. With 4.8 million tons of new annual coking capacity in the pipeline last year, total capacity either in operation or under construction in Anyang, Henan, reached 10.2 million tons a year, stretching far beyond the requirements of local steel sectors.

Laying bare all the issues at hand, inspectors handed out a number of environmental violation notices to local authorities. Relevant companies were punished and fined, officials were held accountable and remedies were adopted for projects.

Teng Fei, deputy head of the Institute of Energy Environment and Ecology at Tsinghua University, believes that China features several institutional advantages, as local governments are liable for the results of implementing policies. "However, some officials with a sloth-like management style tend to reach the goals at huge administrative costs. For example, some regions simply roll out massive power cuts by the end of the year to achieve the yearly control targets, leading to the malfunctioning of society," Teng explained, adding that in the future, market and companies alike should shoulder more responsibilities in cutting emissions.

Teng added that, when it comes to tackling climate change, the government should extend more incentives to China's rural areas given a large amount of greenhouse gases stem from farming activities such as rice cultivation. "Compared with the U.S., where farmers operate on large ranches, Chinese planters grow their crops on a rather small scale. For all of them to accept new environmental technologies or methods, there's still a long way to go. More subsidies should be granted as a means of motivation," he noted.

The Dalad Photovoltaic Power Base in the Kubuqi Desert in Inner Mongolia Autonomous Region on September 14, 2020 (XINHUA)

A road less traveled 

"We are facing a challenge in balancing development and reducing carbon emission," Wang Can, a professor with the School of Environment at Tsinghua University, told Beijing Review, adding that the key solution lies in technologies, including those related to energy storage and renewable energy sources, which China has been developing for years. "There is a learning curve for the adoption of technology—it takes time for technology to mature and achieve large-scale applications, which will in turn lead to the lowering of development cost and even larger-scale utilization, forming a virtuous cycle," he said.

China's ambitious objective to achieve carbon neutrality will force industries to speed up their transformation and upgrade, according to Fan Feilong, Deputy General Manager of Ping An Capital, a private equity firm based in Shenzhen. "A large number of technological breakthroughs are expected to be made, promoting our capabilities in technological innovation. Also, a number of new industry leaders are expected to emerge," Fan told China Daily, adding that more capital will be poured into hi-tech enterprises with new technologies or innovative models.

The CNH Energy Yulin Chemical Co. Ltd. set up an industrial plant in Yulin, a major coal base in Shaanxi Province. Here, coal is recycled into polyglycolic acid (PGA), a degradable material that can be used to manufacture a variety of products such as disposable tableware, toothbrushes or surgical sutures. It is estimated that 50,000 tons of PGA will be churned out annually by utilizing the coal mined in the city.

"The modern coal-based chemical industry should accelerate its shift to green and low-carbon undertakings," Chair of the company Zhang Xiansong said, adding that the industrial chain should pursue high-end diversified development for meeting market demand and producing eco-friendly goods.

The company also plans to work with scientific institutions, including the Chinese Academy of Sciences, to apply relevant research outcomes to industrial production in the green transformation.

The expansion and usage of alternative energy sources have also facilitated the pursuit of a greener path for China's energy industry. In mid-October, China embarked on a series of large wind power and photovoltaic projects in its desert areas across the Inner Mongolia Autonomous Region, Gansu and Qinghai provinces and Ningxia Hui Autonomous Region. Take the photovoltaic power construction project in the Kubuqi Desert in Inner Mongolia, China's seventh largest desert, as an example. Its project will log an annual average of more than 4.1 billion kWh of on-grid electricity, thus helping save over 1.25 million tons of standard coal equivalent or slash 3.4 million tons of carbon dioxide emissions.

As the largest emitter among all manufacturing sectors in China, accounting for about 15 percent of the annual domestic carbon footprint, the steel industry, too, has embraced the green move.

On May 1, China applied a provisional zero import tax rate on pig iron, crude steel, recycled steel raw materials and ferrochrome. The step is expected to reduce import costs, expand steel imports, support domestic producers to cut crude steel output, and guide the industry to substantially cut energy consumption.

Export tariffs on ferrosilicon, ferrochrome and high-purity pig iron were raised. There is no reason to continue exporting numerous ordinary products given China's highly limited resources, said He Wenbo, Executive Director of the China Iron and Steel Association.

Steel mills capable of big-ticket investments have started tapping into the potential of hydrogen metallurgy, an emerging technology that applies hydrogen instead of carbon as a reducing agent to abate carbon dioxide emissions. 

Beijing Jianlong Group, one of China's largest private steel enterprises, established a plant in Inner Mongolia this year. The factory features China's first hydrogen-based high-purity pig iron production line. By employing novel steelmaking technology, an alternative to the outdated blast furnace method, the plant operation overcomes certain fundamental problems like a dependence on large-scale operation and coking coal.

Zhang Zhixiang, Chairman of Jianlong Group, said the plant features the world's first industrial-scale application of hydrogen metallurgy. "Our ultimate goal is to replace carbon completely with hydrogen in steelmaking," he noted.

Public participation 

In October, students at a primary school in Guangzhou, capital of Guangdong Province, were encouraged to participate in an exhibition of handcrafted posters themed Low Carbon, Happy Life. With colorful crayons, they drew pictures of sustainable examples in their daily lives and wrote down tips on how to conserve energy and resources. "Soaking rice in water for 10 minutes before cooking it can save time and electricity," one pupil wrote. "Taking a shower instead of a bath can conserve water resources," another one advised.

"I'm happy that the school incorporates these topics in my child's education. It can help him develop a bigger interest in the matter and put the tips into practice on an everyday basis," Wu Jingze, a father as well as an environmentalist, told Beijing Review.

"The public takes on the role of both customer and employee. Their ecological awareness and response to the low carbon initiatives have a direct impact on industrial innovation and the speed of policy implementation," Wang said, explaining that all people should know about cutting carbon emissions and the necessity to tackle climate change.

Through regular activities, including those for National Energy Conservation Week, National Low Carbon Day and World Environment Day, the public is getting more knowledgeable about climate change. On apps that people use to pay for public transportation, mainly buses and subways, special discount coupons are constantly on offer to encourage more people to opt for green, low-carbon modes of transport.

Moreover, old urban residential buildings and rural houses have been renovated with the help of green building materials. These energy-saving reconstruction projects in various regions are mainly government-led.

At the beginning of this year, Kou Guozhan, a villager in Yuanguang Village, Hebei Province, applied to participate in this type of local project, after seeing the makeover his neighbors' homes had received. "To be honest, I didn't know what exactly constituted energy-saving reconstruction. But after the renovation, my home became warmer on cold days and cooler in summer, saving me a lot on electricity," he said.

Most rural houses are constructed with traditional building materials and methods, often resulting in poor thermal insulation. "The renovation drapes the house in a warm coat, making it more energy- and eco-friendly," noted Peng Hongwei, a local government official with the housing and urban-rural development department.

(Print Edition Title: Keeping It Neutral) 

Copyedited by Elsbeth van Paridon 

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