China is today the world’s largest emitter of carbon dioxide accounting for roughly a fourth of the global greenhouse gas emissions according to the IEA. China’s emissions surpassed 14 gigatons CO2E in 2019, the absolute majority of which stems from fuel combustion and industrial processes that exceed 11 gigatons.
China has now set ambitious climate goals and will by 2025 create a framework laying a solid foundation for carbon dioxide peaking in 2030 and carbon neutrality 2060:
- Peak carbon emission by 2030: Energy efficiency in key energy-consuming industries reaching advanced international levels, with significant decrease of energy consumption per unit of GDP overall and CO2 emissions per unit of GDP dropping more than 65 per cent compared with the 2005 level. Share of non-fossil energy consumption of around 25 per cent, with total installed capacity of wind power and solar power reaching over 1200 gigawatts.
- Carbon neutrality by 2060: China will have fully established a green, low-carbon and circular economy and a clean, low-carbon, safe and efficient energy system, with the share of non-fossil energy consumption over 80 per cent.
GUIDELINES TO HELP DEVELOP ACCORDING TO THE NEW PHILOSOPHY
The National Development and Reform Commission (NDRC) of China has developed guidelines to enable China to reach their set targets called “Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy”. The document provides guidelines within 11 different areas broken down further into subareas.
Of these 11, four of the areas that have already been laid out are:
- Promoting comprehensive green transformation in economic and social development, including accelerating the formation of green production modes and living patterns.
- Accelerating the development of a clean, low-carbon, safe and efficient energy system, including significantly improving energy efficiency in industry, transportation, and other areas, strictly control fossil fuel consumption and actively develop non-fossil energy.
- Accelerate the construction of a low-carbon transportation system, including encouraging the use of energy-conserving and low-carbon transportation vehicles.
- Improving the quality of green and low-carbon development of urban and rural areas, including promoting low-carbon transformation in urban and rural development and management mode, vigorously promoting energy-conserving and low-carbon buildings, and moving faster to improve the energy consumption structure of buildings.
As part of this transition, China has amongst other things kicked of its green electricity trading system and also launched its trading pilot on September 7th, 2021, marking a milestone towards its 2060 carbon-neutral pledge to the world.
But even so, Swedish companies operating in China today face infrastructural challenges when developing green operations in China.
SWEDISH COMPANIES CAN AID IN THE TRANSITION, BUT FACE INFRASTRUCTURAL CHALLENGES
Sweden is well-known as a forefront runner when it comes to sustainability, and many Swedish companies have defined clear global targets for carbon neutrality. To realize these targets, Swedish companies are innovating and taking new types of solutions and business models focused on for example carbon reduction to the market.
However, for Swedish companies to be able to realize their targets not only do internal processes, business models and solutions need to change, but also the surrounding infrastructure. In Sweden, Swedish companies have as an example because of this initiated ‘Fossil Free Sweden’ with clear roadmaps on what obstacles need to be removed to reach carbon neutrality across industries.
But one of the major challenges faced by Swedish companies in their global carbon neutrality ambitions is their manufacturing footprint in China, that in many cases is an important piece of their global operations. Interviews with Swedish companies on the market indicate a few infrastructural challenges faced, for example:
- Limited access to green energy in own manufacturing processes, including electricity as well as heating and cooling
- Challenge getting access to suppliers with the right sustainability focus and transparency in the supply chain, making it difficult to ensure carbon neutrality outside own operations
Today, only a few companies have managed to obtain green energy, and the power outage of China during the fall showcase the dependency of coal-based energy today.
A JOINT EFFORT TO PROMOTE SWEDISH GREEN SOLUTIONS IN CHINA
Swedish companies are well positioned to leverage new business models and solutions to both succeed in their carbon neutrality ambitions and help China in its green transition, but there are infrastructural challenges that needs to be managed.
To this end, Business Sweden is inviting Swedish companies to join a platform in China held under the ‘Pioneer the Possible’ umbrella. The platform is aimed at helping companies in their effort of providing sustainable solutions on the Chinese market through knowledge sharing activities as well as promotional activities.
Please do not hesitate to contact us to learn more about the initiatives we are driving in China, and for a more in-depth discussion on how we can assist your company.