Bloomberg
China’s domination of energy markets — long the driver of soaring fossil-fuel consumption and rising carbon pollution — is now turning the planet in a cleaner direction.
The biggest energy consumer is moving toward the end of an era after it burned the least coal in six years, became the number one producer of renewable energy and even lowered its emissions of climate-warming gases, according to data from BP Plc.
“China matters in a big way to the energy market,†said Giovanni Staunovo, an analyst at UBS Group AG. “There is an aim to move away from coal consumption towards cleaner energy sources.â€
China developed a voracious appetite for energy since the turn of the century as its expanding economy burned up huge amounts of fossil fuels to keep factories humming and cars rolling. In the process it helped drive up prices of oil, natural gas and coal, while also becoming the biggest emitter of the greenhouse gas carbon dioxide.
China’s natural gas production growth has outpaced that of dirtier coal through the first five months of the year. The country’s coal output through May rose 4.3 percent from a year earlier to about 1.4 billion tons, according to data on Wednesday from the National Bureau of Statistics. Natural gas production over the same period expanded by 6.8 percent to 62.9 billion cubic meters.
About one in five people lives in China and its growing middle class means the country is using more energy than ever, but patterns of consumption are changing. Money is pouring in to cleaner energy, while coal is discouraged in the fight to improve the air quality in some of the most polluted cities in the world. The Asian giant’s economy is also evolving toward services, which are less energy intensive than heavy manufacturing.
The numbers are striking. China still accounted for about half of the coal burned in the world last year, but consumption of the fuel fell 1.6 percent, according to BP’s annual Statistical Review of World Energy. That compares with an average 3.7 percent annual expansion in the 11 preceding years. Government policy changes resulted in production of the fuel dropping 7.9 percent, compared with a 3.9 percent average gain in the previous decade.
At the same time it dominated renewables, accounting for 40 percent of global growth and surpassing the US to become the largest producer of power from wind, solar, hydro and other forms of clean energy, BP data show.
“Chinese hunger for energy is being tempered by moves to a more sustainable growth pathway and the rapid expansion of renewables,†Jonathan Marshall, an analyst at the London-based Energy and Climate Intelligence Unit, said by email. Those trends spell “further trouble for coal in the years to come.â€
Weaker industrial growth meant China’s consumption of middle distillate fuels, which include diesel, fell last year for the first time in at least a decade, BP data show.
That “reflects the structural rebalancing of the economy towards more consumer and service-related facing sectors,†Spencer Dale, BP’s chief economist, said at a briefing in London. “But the scale of the slowdown suggests some bounce-back is perhaps likely.â€