China is moving along with Europe to spearhead carbon neutrality...

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    China is moving along with Europe to spearhead carbon neutrality targets. That is leaving behind the US and Australia.

    This new China carbon neutrality announcement is a game changer and spells impending progressive decline for fossil energy sources...

    We are NOT being AHEAD of the CURVE.

    Investing should be looking forward, ditching legacy businesses and embracing the new revolution.
    China's net-zero goal to send coal, oil demand diving
    Angela Macdonald-SmithSenior resources writer
    Sep 25, 2020 – 11.01am


    China's "monumental" announcement that it is targeting carbon neutrality by 2060 has cemented in place a permanent downward track for coal demand in the country and points to a peaking in the use of oil there as early as 2025, according to Bernstein Research.

    The predictions are part of a radical transformation that analysts expect in the world's largest consumer of energy and biggest carbon emitter to meet the surprise goal announced this week by President Xi Jinping, which Bernstein said is about 40 years ahead of expected.

    Mr Xi also announced China, which represents almost 30 per cent of global carbon emissions, would reach peak emissions before 2030.

    It spells a reversal of the rapid growth in fossil fuel demand in China that has propped up global energy commodity markets since early this decade. It is expected to have implications for international oil prices, as well as for imports from major suppliers of coal and gas such as Australia.

    "The key message is, with this strategy that China has come out with, we expect very limited demand growth here on in for oil in that net zero plan," Hong Kong-based senior oil and gas analyst Neil Beveridge said on a webcast.

    "We still think gas going to grow in the energy mix in the next 10 years but beyond that it does look more questionable."

    Australia is China's biggest supplier of liquefied natural gas, with majors such as Sinopec, CNOOC and PetroChina major customers for export ventures in Queensland and Western Australia.

    The impact is however most dramatic on coal, currently 57 per cent of China's energy mix, which Bernstein expects will fall to nearly zero by 2050.

    "We really believe downward is the only way forward for Chinese coal prices and coal's share in China’s electricity mix," said Bernstein's Asian renewables analyst Lu Wang,
    This is really a Herculean challenge which will require enormous amounts of investment
    — Neil Beveridge, Bernstein Research
    The firm is forecasting China's oil demand will plateau at about 14 million barrels a day some time between 2025 and the end of the decade, and then start to decline, dropping to less than 6 million barrels a day by 2050.

    Gas use is seen almost doubling from about 330 billion cubic metres today to about 600 bcm in 2030, "but beyond that China will effectively go ex-growth," Dr Beveridge said.

    Coal is seen immediately starting a sustained decline through to 2050, "when it really gets taken out of the energy mix," he said.
    In contrast, renewables are set to soar, with installed capacity of solar PV generation rocketing from less than 300 gigawatts today to over 2500 GW by 2050 when its share of the electricity mix would be 32 per cent compared to 3 per cent today. Wind power growth is almost as rapid, rising from 210 GW today to almost 1400 GW by 2050.

    Hydrogen is a huge beneficiary, with demand potentially growing from less than 10 million tonnes today to 140 million tonnes by 2050 when it would be 11 per cent of the energy mix.

    Wood Mackenzie Asia Pacific vice chair Gavin Thompson underscored that big questions remain about China's goal, including the definition of "carbon neutrality" and the road map to achieve it.

    But the consultancy is expecting increased investment in wind, solar, electric vehicle and battery storage deployment, as well as support for green hydrogen and carbon capture and storage (CCS) technology to reduce China's annual 10 billion tonnes of carbon emissions. It said China will need to deploy over one billion tonnes of CCS capacity across its power and industrial sectors to deliver its 2060 target.


    “This is really a Herculean challenge which will require enormous amounts of investment," Dr Beveridge said of the task to transform China's energy mix.

    The firm puts the investment required at $US250 billion ($354.4 billion) a year by the mid-2030s, dropping to about $US150 billion a year by the 2040s. Over the next 30 years some $US5.5 trillion, or about $US184 billion a year, would be needed on renewable power, CCS and hydrogen.

    Dr Beveridge said that more broadly, China's announcement puts pressure on other countries to move more vigorously on emissions commitments.

    "Certainly if you look at countries like Japan, Australia -wealthy OECD countries that have not made the commitment to net zero by 2050 or 2060 - I think there's really no excuse for that now," he said.
 
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