Energy Insider: China to Lead Global Renewables Boom, Beijing Hits Back at EU’s EV Tariffs

In this week's Caixin energy wrap-up, we review several key areas regarding China's energy and climate progress, including its leadership in global renewable growth, job creation in green industries, stances on EU EV tariffs, burgeoning EV sales, and carbon emissions projections [para. 1].

China is poised to spearhead a global surge in renewable energy expansion from now until 2030, primarily driven by its robust solar power installations. The International Energy Agency (IEA) report states that global renewable energy capacity is expected to increase by 2.7 times over the next six years, with China contributing to 60% of this growth. This includes nearly 3,207 gigawatts (GW) of renewable capacity by China throughout this period, making up roughly half of the world's cumulative renewable energy in 2030 [para. 2].

Despite China’s rapid progress in wind and solar farm construction, its existing power grid faces challenges in integrating the generated power, particularly in the north and northeastern regions where large-scale renewable projects are concentrated. Notably, in June, China's government adjusted a key renewable energy target for provinces, decreasing the new-energy utilization rate requirement from 95% to 90% in areas rich in renewable resources [para. 3].

Regarding employment, nearly half of the jobs in the global renewable sectors were based in China last year, with a total of 7.4 million jobs across sectors from solar to bioenergy. This represents 46% of the global total, positioning China far ahead of India. The European Union had 1.8 million such jobs, while Brazil and the U.S. reported 1.56 million and over 1 million, respectively. A significant 33% year-on-year increase in renewables jobs in China was recorded, largely due to the growth of the nation's solar power industry [para. 4].

On trade matters, Beijing has expressed strong opposition to the European Union's decision to raise tariffs on imported Chinese electric vehicles (EVs), deeming the decision protectionist and against World Trade Organization rules. The tariffs, which only apply to fully electric vehicles and exclude plug-in hybrids, could introduce rates ranging from 7.8% to 35.3% on top of the existing 10% for five years. The decision could impact China's economy, especially as it relies on boosting GDP through EVs, solar panels, and batteries amid a slow post-pandemic recovery [para. 5].

Chinese EV manufacturers experienced a significant uptick in sales during September, prompted by government subsidies and price incentives. BYD Co. Ltd., China's largest EV company by sales, achieved a record monthly sales figure of 419,426 vehicles, a 45.9% increase from the previous year. Li Auto Inc. also reported a record 53,709 vehicles delivered in September, up 48.9% from the previous year. This surge is partly driven by increased subsidies for consumers exchanging their cars for new-energy vehicles [para. 6].

China's carbon emissions could reduce by "at least 30%" from their peak by 2035 if it maintains its current rate of clean energy expansion. This estimate aligns with the lower threshold of the 1.5-degree global-warming objective under the Paris Agreement. However, most scenarios for achieving the 1.5-degree target necessitate further reductions [para. 7]. China, a key participant in the Paris Agreement, is preparing to submit new climate targets to the United Nations, which would include set emissions goals for the first time [para. 8].