Sustainable development in China: the pathway of decarbonizing the energy mixABSTRACT
China is currently the largest emitter of greenhouse gases, reflecting the country’s energy sector and its dependence on fossil fuels. However, the model of economic growth supported by polluting energy is no longer sustainable, which leads to pressure for changes in favor of greener energy, in a way to meet the interests of the country’s new development strategy, in addition to ensuring energy security. In face of this framework, this article analyzes the ongoing process of decarbonization of the Chinese energy mix, concluding that efforts for energy transition in the country already reflect advances in renewable energy sectors, and converge with the goals of modernizing the economy.
KEYWORDS:
China; sustainable development; energy mix
RESUMO
A China é a maior emissora de gases do efeito estufa atualmente, refletindo o setor energético do país e sua matriz dependente de combustíveis fósseis. No entanto, o modelo de crescimento econômico apoiado em energias poluentes não é mais sustentável, levando a pressões para mudanças em prol de energias mais limpas, de forma também a atender os interesses da nova estratégia de desenvolvimento do país, além de garantir sua segurança energética. Diante desse quadro, este artigo analisa o processo de descarbonização da matriz energética chinesa em curso, concluindo que os esforços para a transição energética já refletem avanços em setores de energia renovável e convergem com as metas de modernização da economia.
PALAVRAS-CHAVE:
China; desenvolvimento sustentável; matriz energética
INTRODUCTION
In a context of the need to adapt productive and economic structures to mitigate the effects of climate change, China plays a fundamental role as it has consolidated its position as the world’s largest emitter of greenhouse gases (GHG) - a consequence of its highly dependent on fossil fuels energy mix (Climate Watch, 2023). The energy demand in the country is expected to continue to grow reflecting China’s economic development, while also increasing the level of GHG emissions if the basis of China’s energy mix is not transitioned to greener sources (Yi, 2021).
Faced with increasing global and domestic awareness of climate change and the negative consequences of the process on society and the economy, China seeks to position itself as a collaborative agent to mitigate this phenomenon, especially through the internal targets announced in its Five-Year Plans. Thus, it is understood that the Chinese energy mix will be one of the major focuses of changes and public policies to achieve China’s climate goals in the coming years. In this context, the article aims to evaluate China’s sustainable development model from the energy sector, analyzing the evolution of the country’s energy transition over the last decade, as well as the economic challenges it faces in decarbonizing its mix and meeting sustainability goals.
The research is based on the hypothesis that the decarbonization of the Chinese energy sector is supported by the country’s commitment to the energy transition, reflected in its environmental policies over the last decade, but that the process still faces challenges, given China’s great dependence on fossil fuels, especially coal and oil. Considering these goals and to verify the hypothesis for the questions posed, the article is based on an extensive bibliographical review, analysis of the country’s plans for the energy transition in the period considered and monitoring of news and reports on the subject, as well as gathering data on its energy sector, such as The World Bank, International Energy Agency, Asian Development Bank, Chinese National Bureau of Statistics, and Energy Institute, as well as news portals such as Carbon Brief and China Dialogue - sources that frequently publish analysis and studies on the subject of this research.
The paper is therefore structured in three sections besides this introduction and the conclusions to the article. Firstly, we discuss how China’s economic growth and social changes since the 1980s have influenced the formation of a highly carbon-intensive energy mix. This establishes a correlation between China’s economic growth and the increase in GHG emissions, driven especially by the energy sector.
The second section describes China’s role in the climate change process in terms of GHG emissions, and the evolution of the country’s environmental goals based on its Five-Year Plans, including the plans defined in the last decade (12th, 13th and 14th Five-Year Plans), to assess how climate goals fit into the country’s most recent development strategy.
The third section presents the evolution of fossil fuels and renewable energy, contrasting the development of each segment of the Chinese energy sector between 2011 and 2021, to highlight the process of energy transition underway in the country with the strengthening of renewables, such as solar and wind energy. It also seeks to present the contradictions in the energy transition process in China, exposing the evolution of polluting energy sectors.
CHINA’S UNSUSTAINABLE GROWTH
From a historical perspective, it is understood that China has undergone a transformation in its economy and socio-political organization in recent decades, allowing the country to achieve an average economic growth above the global level. Between 1980 and 2021, China’s Gross Domestic Product (GDP) grew by an average of 8.52% annually. In comparative terms, in the same period, the United States grew by 2.6% p.a., while the European Union was limited to 1.79% p.a.; and, since 2010, China has become the second largest global economy (World Bank, 2023). This intense economic growth, sustained over a long period, has had a major impact on China’s integration into the global economic order, also with environmental consequences.
The transformations in China’s productive and social structure, as well as the trajectory of significant growth, were accentuated from the 1980s onwards, when movements associated with the start of economic reforms in the country took place during the government of Deng Xiaoping (1978-1992). In general, the measures adopted by the reforms contributed to gradually lowering the barriers to international trade and foreign investment in areas considered strategic, but conditioned to domestic development objectives, with strong state participation and direction in macroeconomic and industrial policies. The transformations also resulted from the participation of state-owned companies, which adopted policies of high domestic investment in various sectors (Wei, 2017; Hiratuka, 2018; Júnior et al., 2020).
Therefore, China’s economic growth was accompanied by major changes in the domestic production structure, with an emphasis on increasing the participation of sectors with higher added value and growing technological complexity, managing to restructure and integrate the domestic production sector through an accelerated catching-up process. That resulted in a migration from an agricultural economy with more labor-intensive industries to a more integrated and technology-intensive industrial structure (Hiratuka, 2018; Borghi, 2023; Bresser-Pereira, Jabbour, Paula, 2020).
China’s development strategy and its impacts on the functioning of the domestic economy, however, affected environmental cycles by pressuring ecosystems to extract resources at a high rate. In addition, specialization in high GHG emitting industry sectors placed China as one of the main contributors to climate change (Yang, Zhao, 2019). It is estimated that in 1990, China emitted 2.9 GtCO2e of greenhouse gases, while in 2005 this figure rose to 6.93 GtCO2e, reaching 12.29 GtCO2e in 2020 (Climate Watch, 2023).
When analyzing the country’s GHG emission patterns by sector, it is possible to identify the centrality of the energy sector (Graph 1). According to estimates by Climate Watch (2023), emissions in this category amounted to 2.36 GtCO2e in 1990, which expanded significantly until this volume reached 10.81 GtCO2e in 2020, equivalent to 88% of the country’s total emissions. The trend differs in magnitude from other sectors, such as agriculture and industrial processes, although these also expanded in the period.
According to the National Bureau of Statistics of China (NBSC), the energy demanded by the country in 1980 was 602.75 million tons of coal equivalent (tce). By 2000, the figure had more than doubled to 1,469 million tce (NBSC, 2023). The consumption trend continued upwards, following the acceleration of China’s economic growth during the period considered, and, in 2020, even with the lockdowns and the slowdown in economic activity in the country as a result of the COVID-19 pandemic, energy demand reached a new peak, at 4,980 million tce.
Chinese energy consumption has also grown at a much faster rate than other countries, which has positioned China as the largest global consumer since 2009 (Energy Institute, 2023). According to estimates by the Energy Institute (2023), China consumed 157.65 Exajoules in 2021, a figure 70% higher than that estimated for the United States (92.97 Exajoules), representing 26% of global demand that year. The country’s energy intensity is also significant, at 6 MJ/GDP, and although the indicator has been falling steadily since 2004, it is still much higher than that of developed countries such as the United States and Japan (4.51 MJ/GDP, 3.33 MJ/GDP, respectively) (World Bank, 2023).
China’s energy mix, in turn, is mostly made up of fossil fuels, especially coal, which helps to explain the country’s rapid growth in emissions. According to the NBSC (2023), coal accounted for 56.8% of China’s total energy in 2020 and, despite being the lowest figure ever recorded in the historical series in relative terms, it still represents a significant amount given the volume used for combustion - 4,048 million tons. Considering the rest of the country’s energy mix, in 2020, oil derivatives are the second main source of energy (19%), while renewable energies - namely solar, wind, nuclear, biofuels, and hydroelectric - account for 16% (NBSC, 2023).
Throughout China’s industrialization process, the country’s changing production structure demanded a large amount of energy, especially for heavy industries, but also for rapidly expanding urban centers (Yi, 2021). To serve these sectors, China has relied on the use of thermoelectric energy sources from burning coal (Yergin, 2011). China, for its part, has one of the largest known coal reserves in the world. In 2020, it is estimated that the country had 143.19 billion tons of proven reserves of the fuel, representing 13% of the global amount (Energy Institute, 2023).
The availability of this energy source in the country made it possible to develop the electricity sector to meet domestic demands. As a result, investments in thermoelectric plants and mining advanced, increasing the sector’s installed capacity for energy generation and meeting energy demand from an abundant source in the country, which led coal to account for up to 71% of China’s energy supply in 2010 (IEA, 2023). According to the Global Energy Monitor (2023), China had more than 3,092 coal-fired power units in 2022, which amassed a generating capacity of 1.09 billion megawatts, representing 52% of all global coal processing capacity.
In addition to coal, oil-refined fuels also play an important role in China’s energy mix. It is estimated that the country’s oil consumption has expanded significantly, from 221 million tons in 2000 to 659 million tons in 2022, making it the second largest oil consumer in the world, behind the United States (Energy Institute, 2023). However, the country has not been self-sufficient in oil since 1993, with the domestic balance of the fuel in deficit, leading China to be the largest importer of oil in the world (Energy Institute, 2023; Yergin, 2011).
It is therefore understood that China is an energy-intensive economy, which, combined with a polluting energy mix, contributes to the country’s higher GHG emissions. As a result, even with the growing participation of cleaner fuels over the last ten years, China still depends on emitting sources to meet its domestic energy demand. This dependence on fossil fuels, in turn, is structural, with the country specializing in sectors that extract and process these polluting sources throughout its development process.
Thus, the search for new fuels is important to guarantee China’s energy security, preventing international market shocks and the consequent drop in volumes available for import or significant price increases from limiting the country’s economic growth. In the recent period, for example in 2022, the conflict between Russia and Ukraine caused great volatility in the energy markets, affecting both the availability and prices of oil and natural gas (Meidan, 2022). In addition to these factors, it is understood that the high volume of GHG emissions linked to the country’s energy generation is also a determining factor in encouraging the restructuring of the energy sector, to meet China’s decarbonization targets.
CHINA’S DECARBONIZATION TARGETS
It is understood that both economic and social transformations in China have demanded significant volumes of natural resources, and given the trajectory of recent years, it has not yet been possible to observe a reversal in the trend of GHG emissions. Considering this indicator, China has taken center stage in recent years, being, since 2005, the country that emits the most of GHG - reaching 12 million MtCO2e in 2020 (Climate Watch, 2023). In this context, China plays a decisive role due to its contributions to climate change and its potential to mitigate it through environmental policies.
The analysis therefore focuses on the country’s Five-Year Plans from the 2010s onwards, involving the 12th Plan: 2011-2015; 13th Plan: 2016-2020 and the 14th Plan: 2021-2025. This covers the period of change in the central government, from the end of Hu Jintao’s term (2003-2013) to the current Chinese president, Xi Jinping (2013-present), making it possible to assess the recent evolution of the climate commitments made by the country in its official targets and how they have evolved.
At the beginning of the 2010s, when the 12th Five-Year Plan was drawn up, China was already the world’s second-biggest economy and had a growing geopolitical and economic role. Between 2006-2010, the country recorded average GDP growth of 11.3% p.a., compared to 9.8% p.a. in the five-year period 2000-2005 (World Bank, 2023). Despite the positive result, there was a need to change China’s economic growth pattern to sustain development in the following years, which influenced the targets set in that plan. Among the main targets was a change in the determinants of the country’s economic growth, which should be based more on innovations in strategic industrial sectors and an increase in the share of the services sector over the rest of the economy (Asian Development Bank, 2011). The climate agenda, in turn, gained prominence in the structuring of the plan, with 7 out of the 12 mandatory targets set by the central government.
Among the climate goals, targets have been set by 2015 to reduce the energy intensity by 16% and CO2 emissions by 17%, compared to 2010 levels. The plan also determined that the share of renewable energies in the Chinese energy mix should reach 11.4% by 2015 (with this indicator standing at 8.3% in 2010), based on an increase in the installed capacity of nuclear, hydroelectric and wind power plants (Boyd, 2011). It is also worth noting that, out of the seven strategic industries defined by the government to be the focus of innovation efforts, three were directly related to the energy sector, such as 1) New energy auto industry; 2) Energy-saving industry; and 3) New energy industry (nuclear, wind, solar and biomass) (Lu, 2012).
Despite the greater prominence of environmental goals, China continued to fail to set a target for emissions limits, restricting itself to reducing the emissions intensity of the economy - an indicator calculated by the ratio between the total volume of emissions and GDP in the corresponding year. Nevertheless, it is worth noting that the targets for decarbonizing the energy mix - by supporting the development of renewables - already indicated the important role that the sector would play in the country’s economic policy, especially in the subsequent Five-Year Plans.
In 2016, China had achieved both economic and environmental goals set in the 12th Five-Year Plan. This was the first revision of the five-year targets following the ratification of the Paris Agreement, in which the country committed in its Nationally Determined Contribution (NDC) to peak GHG emissions by 2030, in addition to increasing the share of clean sources in the country’s energy mix to 20% in that period.
In general, the 13th Five-Year Plan extended the goals set previously, seeking to direct Chinese growth increasingly towards higher value-added sectors, with a greater role for domestic consumption and innovation. Among the 13 binding goals, 10 of which were environmental targets, making it the “greenest” Five-Year Plan up to that time (Koleski, 2017). Regarding economic growth, the target was set for annual GDP expansion of 6.5% between 2016 and 2020, reflecting the prospect of a slowdown in the pace of growth of previous decades and prioritizing the productivity of the labor market and the services sector.
Regarding environmental targets, China made greater commitments in this new Five-Year Plan, with President Xi Jinping’s concept of sustainable development and especially “Ecological Civilization” being incorporated into the goals for that period (Hilton, Kerr, 2017). Among the main environmental targets, there was a drop by 15% of its energy intensity by 2020 compared to 2015 levels. In addition, it was proposed that the intensity of CO2 emissions per unit of GDP should fall by 18%, again taking 2015 as the base year, besides increasing the share of non-fossil fuels in the primary energy consumption mix (15% by 2020). The targets mainly sought to reduce the energy intensity of the Chinese economy, although they only established figures relative to GDP and were therefore conditional on economic growth, as in previous Five-Year Plans.
China has made significant progress on the climate front in the period covered by the plan. The country reduced the volume of emissions per unit of GDP by 46% compared to 2005 in 2017, three years before the deadline for the target set in the first NDC in the Paris Agreement (UNFCCC, 2018). Furthermore, the share of coal in the energy mix declined, from 67% in 2015 to 56% in 2020, with the country more than doubling renewable energy generation, reaching 4.47 million TJ in the same year (NBSC, 2023; IEA, 2021).
Thus, the drop in carbon intensity contributed to a slight decoupling of the CO2 emissions curve and the country’s GDP in recent years (World Bank, 2023; Climate Watch, 2023). An important factor to explain this movement is the change in the profile of the Chinese economy, with more energy-intensive industries not growing in the same way as less energy-demanding sectors, contributing to the fall in carbon intensity, while also limit the expansion of coal consumption, leading to a fall of 48% of China’s carbon intensity between 2005 and 2020, as observed in Graph 2 (Korsbakken, Andrew, 2019; Myllyvirta, 2024; EIA, 2023).
In 2021, faced with expectations of new climate commitments, China renewed its goals in the 14th Five-Year Plan. In addition, that same year China renewed its contribution to the Paris Agreement by updating its NDC and setting the goal of achieving carbon neutrality by 2060, while maintaining its target of peak emissions by 2030 (Yi, 2021). The country continued to be the largest global emitter of CO2 and, despite the fall in the economy’s carbon intensity, the index remained above the global average (0.45 tCO2/1000 USD against 0.26 tCO2/1000 USD, respectively) (IEA, 2022). Coal also remained the main energy source, contributing to the increase in emissions even amid the economic slowdown in 2020, going against the rest of the world, when the economic impacts of COVID-19 led to an 8% decrease in global emissions (IEA, 2022).
In the new plan, there is an even greater emphasis on the energy sector, and some sustainable development targets are biding, such as reducing energy and carbon intensity compared to 2020 levels (13.5% and 18%, respectively). The plan also proposed increasing the share of non-fossil fuels in the energy mix to 20% by 2025, up from 15.8% in 2020 - although this is a non-binding target. There were also proposals to build eight large renewable energy generation areas across the country, especially in non-coastal regions, as well as transmission lines from these hubs to areas with greater energy demand (Liu, 2021).
However, recent data regarding China’s emissions of CO2 shows that the country may not meet its 14th Five-Year Plan targets without significant changes in the next years. Between 2020 and 2023, China’s CO2 emissions have increased 12%, with total energy consumption increasing 5.7% in 2023, a growth rate bigger than the country’s GDP that year (Myllyvirta, 2024). According to Myllyvirta (2024), this movement is related to the growth of energy consumption that has been met mostly by fossil fuels rather than renewables in recent years, especially with coal consumption.
In general, it is possible to see a step forward in China’s environmental policies in the 14th Five-Year Plan, with the initial expectation that the economy’s energy intensity would fall with proposals to develop sectors such as services and technology industries, moving away from more energy-intensive segments. However, criticism of the conservatism of environmental targets, especially for the energy sector, remained. In this new plan, for example, there were no specifications regarding quantitative limits for the generation of coal-fired power stations, and the goal of increasing the share of renewable sources in the energy mix was not made binding. These were considered negative points that could interfere with the process of decarbonizing the economy (Yi, 2021). Since then, the country’s goal of meeting its energy demand with renewables has been facing some challenges with the fossil fuels growth in recent years, especially coal and oil (Myllyvirta, 2024).
DIVERSIFICATION OF THE ENERGY SECTOR IN CHINA
Given the need to decarbonize the energy mix to achieve China’s environmental targets, as well as the expectation of developing technology and innovation-intensive industries expressed in the Five-Year Plans, it is understood that the transition of the energy sector is strategic to reconcile these two goals. This reflects the large number of policies aimed at the energy sector in recent years, especially for renewables. However, China is still dependent on fossil fuels such as coal and oil, which limits divestment from these sectors given their current centrality to domestic supply. Against this background, this section shows how the main segments of the energy sector behaved in the last decade and how environmental policies impacted their evolution, especially in the cases of coal and oil representing fossil fuels, and solar and wind energy in the field of renewables.
Considering coal, it is possible to see an increase in domestic demand for the fuel between 2011 and 2021. According to NBSC (2023), Chinese consumption rose to 4.2 billion tons in 2021 - an increase of 10.44% over the period considered. It is worth noting, however, that this growth was not linear. Between 2014 and 2017, demand for coal in China fell slightly, before rising again from 2018 onwards. This trend accompanied thermal generation from coal, with the decline in thermal power generation between 2014 and 2016 not being sustained, as the growth in Chinese energy demand influenced the resumption of domestic production and thwarted expectations of a supposed peak in coal consumption in the country (Hao, Pike, Zan, 2018).
It is worth noting, however, that the share of coal in China’s energy mix has declined in recent years, reaching its lowest level in 2020 (56.8%) (NBSC, 2023). Furthermore, despite the growth in coal-fired thermoelectric plant capacity, there has been a slowdown in the sector’s expansion in recent years. According to Graph 3, China’s coal plants had a total capacity of 1,108 GW in 2023, a 79% increase on 2011 levels, but the new capacity added went from 61 GW in 2011 to 17 GW in 2023.
Considering oil, by 2021 China had become the second largest global consumer, behind only the United States (Energy Institute, 2023). It is estimated that consumption grew rapidly between 2011 and 2020, at an average rate of 4% per year, leading fossil fuel derivatives to account for almost 19% of China’s energy mix in 2020 (NBSC, 2023). In turn, the country’s refining sector have continued to grow, with China having the second largest oil refining capacity in the world (Energy Institute, 2023). Like coal, oil went through a period of slowdown in the added capacity between 2015-2016 among shut down of inefficient refining units, which led to a drop of the indicator - but recovered in the following periods (see Graph 4). Despite this significant increase in recent years, institutions such as the IEA are already estimating a peak in demand for 2030 as part of the process of decarbonizing the energy mix through the increase in electric vehicles and greater participation by less energy-intensive industries (McMillan, 2023).
On the other hand, despite the noticeable growth of fossil fuels in China during the period in question, especially oil, there has been significant progress in the renewable energy sectors, such as wind and solar energy. It is understood that the development of these sources is important to guarantee national energy security, as well as contributing to the decarbonization of the Chinese mix and boosting technology-intensive industries that meet the economic objectives expressed in the Five-Year Plans.
Among renewable energies, wind power was the most prominent in China between 2011 and 2021. According to NBSC (2023), wind generation has risen from 70.3 TWh to 656 TWh in just ten years. In 2011, China’s energy generation volume was much lower than European countries and the United States, even though it was already among the largest global producers. However, advances in the sector led to a great acceleration in generation capacity in the following years and, as a result, China became the main producer of wind energy in the world, generating almost 70% more in 2021 than the United States, which has the second largest global wind farm (Energy Institute, 2023).
According to Zhang et al. (2020), the significant growth of the wind sector in China has been influenced by interventions by the Chinese government, which, through policies aimed at the sector, has promoted tax and regulatory incentives, as well as subsidies to encourage the construction of wind farms. At first, these incentives were designed to encourage the import of turbines and other machinery, since there were no companies in the sector in the country. Subsequently, investments in research and development enabled the construction of wind industries in China, making larger-scale generation feasible by reducing technological dependence (Zhang et al., 2020).
The targets related to the generation of energy from renewable sources continued to have a positive impact on the wind sector, also considering the great potential for generation in the country. In recent years, the goal of increasing the share of renewable energy in the mix and the gradual narrowing of the technological gap in the domestic industry have allowed China to increase its wind sector by expanding domestic capacity, which currently accounts for almost 40% of the entire global volume, according to Table 1 (Zhang et al., 2020; Energy Institute, 2023). The outlook is that China will continue to expand its wind power sector in the coming years, as the country has already announced projects that are expected to double generation capacity to 371,074 MW - 112% more than the country’s current wind farm (Global Energy Monitor, 2023).
Although still smaller than the wind sector, solar energy also grew significantly in China between 2011 and 2021. According to the Energy Institute (2023), photovoltaic generation in the country went from just over 2.6 TWh in 2011 to 327 TWh ten years later, with an average growth of almost 30.8% per year. With this result, China is considered the largest generator of solar energy in the world. The advance of the photovoltaic sector in China is even more impressive when one considers that the country was not among the top three global producers in 2011, namely the United States, the European Union and Japan.
The development of the photovoltaic sector has followed the movements of wind energy, as it has been influenced by public policies to encourage the installation of plants and the domestic production of solar panels (Liu, Shiroyama, 2013). In addition, You (2023) highlights the lower logistics costs and the large domestic market that supports economies of scale, with investments in innovation and research also improving the technology of Chinese industry. This significant performance has even had an impact on the country’s exports, with China accounting for almost 83% of the world’s solar cells exports in 2022, in addition to the significant share of other components needed for photovoltaic generation in the balance of trade (You, 2023).
The development of the photovoltaic industry has allowed total installed capacity in China to soar, reaching 307,068 MW in 2021 (Energy Institute, 2023). As shown in Table 2, this represented almost 36% of all global capacity, with investments in the sector leading to an increase in domestic capacity of around 39% of the total added in 2021.
The outlook for the photovoltaic sector in China remains positive for the coming years. According to the Global Energy Monitor (2023), China will increase its installed capacity by up to 378,622 MW in the next ten years, doubling the current solar sector, a move that could represent up to 31% of all capacity added worldwide in that period.
Therefore, it is understood that China has made great strides in the development of renewable energy sectors, supporting the growth of solar and wind energy, and becoming the main renewables consuming and producing country. This movement has intensified, following the definition of sustainable goals in the Five-Year Plans, in addition to counting on support from the public sector for the consolidation of these segments in the country, with future projects signaling that China will continue to diversify its energy mix to renewable energy sectors. However, there is also considerable strength of polluting sources, especially coal and oil, as these sectors grew in the period considered. Therefore, despite declining representation in the energy mix in China, the country still depends on fossil fuels to meet its energy demand, mobilizing investments in these sectors that are not aligned with the environmental policy defended in the Five-Year Plans.
CONCLUSIONS
The challenges of climate change require greater action to mitigate its negative effects, which have major impacts on political, social, and economic organization. Thus, proposing actions to change the structures that most contribute to greenhouse gas emissions has been one of the focuses of environmental policies, and it is necessary to promote more sustainable sectors. The urgency of this issue, in turn, makes it necessary to evaluate the efforts made by countries to reduce the volume of GHG emissions, to understand how these measures have an impact on climate change mitigation, but also on economic organization. The focus of this paper was therefore on China, given its political, economic, and climatic weight on the global stage, and the fact that it is a key player in the changes that will take place over the coming decades.
China is currently the largest emitter of greenhouse gases, accounting for almost 25% of all global emissions in 2020 (Climate Watch, 2023). This indicator, in turn, is strongly related to the country’s energy sector, considering the heavy dependence on polluting sources, especially coal, which led the sector to account for 88% of Chinese emissions in 2020 (Climate Watch, 2023). To a large extent, these fuels have been the basis for the structural transformations that China has undergone since the 1980s, in response to growing industrial, infrastructure, and urban demand.
Despite enabling Chinese economic growth, dependence on fossil fuels presents some problems. These include the non-sustainable use of polluting sources since they emit more GHGs and intensify climate change. Even from an economic and geopolitical point of view, several questions arise, including energy security, as China depends on imports of these fuels to meet its domestic demand. In addition, the development of renewable energy generation involves more technology-intensive and higher value-added sectors, which converge with the new Chinese economic development goals expressed in the most recent Five-Year Plans.
In this way, we sought to assess how China has incorporated these objectives and how this movement has impacted the country’s energy sector over the last decade. Among national policies, there is a great effort to reduce the energy intensity of the economy by increasing the sector’s productivity. Thus, in addition to promoting the decarbonization of the energy mix, these policies also aim to guarantee China’s energy security by stimulating innovative industries in regions with the greatest potential for generation from greener sources.
The importance of these policies becomes more evident when we evaluate the transformations in the Chinese energy sector. Between 2011 and 2021, China consolidated its position as the country with the largest installed capacity for wind and solar power generation in the world, in an accelerated process of development in these sectors that should continue in the coming years. However, China still faces challenges in moving forward with the energy transition. Among these are the challenges related to the development of renewable energy industries in the field of innovation, by continuing to strengthen the sector domestically and seeking to reduce the technological gap. There are also the challenges of developing solutions to overcome bottlenecks in renewable energy generation, such as storage and distribution (Gavin, 2019). There are also challenges to overcome dependence on fossil fuels, involving the modernization of national industries and not prioritizing sectors linked to polluting energy, especially coal.
In addition, public policies and decarbonization targets have played an important role in consolidating China’s renewable energy sector in recent years, which has led the country to continue supporting these sectors in order to achieve its goals linked to decarbonizing the economy, as well as expanding the actions for the energy sector to promote greater diversification of its mix. It is therefore understood that China has great economic, political, and environmental incentives to promote the energy transition, and was doing so in the last decade by supporting renewables in the country’s climate agenda. However, the structural dependence on fossil fuels still limits the growth of green energy and requires further Chinese efforts to reduce GHG emissions. Such conclusions raise questions for future research, not only to think about the domestic transformations in China but also to follow the international implications of this process, including the Chinese growing investments in energy-related sectors in other countries.
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Source: Own elaboration with data from 
Source: Own elaboration with data from 
Source: Own elaboration with data from the 
Source: Own elaboration with data from the