Page 8 - AsiaElec Week 09 2022

AsiaElec COMMENTARY AsiaElec

Moscow, having an energy-deficient economic This figure is also rising, with China’s CO2
superpower on your doorstep makes diversifica- emissions growing 4% in 2021, rising 5.5% above
tion away from Europe a less daunting prospect. pre-pandemic (2019) levels. Coal consumption
However, increasing consumption of hydro- was 5% above 2019 level, oil 8% and gas 21%,
carbons imported from Russia clashes with according to official figures.
China’s commitment to achieving net-zero emis- Wood Mackenzie’s Accelerated Energy Tran-
sions by 2060. sition 1.5 ˚C scenario (Global Net Zero 2050)
Thompson noted that Makenzie’s own fore- forecasts that China’s oil demand will tumble to
casts show that in its Energy Transition Outlook under 5mn bpd by 2050 and require only around
(ETO), China’s oil demand peaks in 2027 but a 3mn bpd of imports. Gas demand halves to just
modest decline curve keeps it above 13mn bpd over 300 bcm by 2050 compared to the ETO.
by 2050. Domestic production could potentially meet all
With falling domestic output, imports this demand.
account for over 80% of supply by this time. Rus- Achieving the outcome forecast in our AET-
sia will see itself as critical to meeting this and 1.5 scenario for China is not impossible, but a
helping China diversify its crude imports. broader approach is required, Thompson said.
Meanwhile, Wood Mackenzie’s ETO pre- As well as China’s current emphasis on
dicts that Chinese gas demand will increase for renewables, more policy support and investment
another two decades before peaking in the mid- is needed in low carbon hydrogen and carbon
2040s at above 660 bcm. capture in order to reach net zero.
Around half of China’s demand will be met An estimated US$400 billion in cumulative
through imports, though this could be higher if capex is required for China’s domestic green
domestic unconventional gas disappoints. hydrogen electrolyser capacity alone.
Despite these growth forecasts, China’s net Put simply, China’s net-zero 2060 targets
zero targets will require massive and immediate require the total transformation of the country’s
efforts to decarbonise, Thompson said. energy system and a move away from oil and gas
The world’s ability to meet the Paris Agree- dependency.
ment targets of 1.5 degrees will largely be deter- If China’s leaders follow through in meeting
mined by China. The country is near-90% their 2060 target, then then the need for major
dependent on hydrocarbons and produces oil and gas import projects from Russia will
around 11 billion tonnes of CO2 per year. disappear.™

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