Thursday, December 8

China Delivers Blow to Climate With New Building Emissions Deadline


In another potential blow to the climate, China has set 2030 as the date for peaking carbon emissions for building materials.

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(Bloomberg) — In another potential blow to the climate, China has set 2030 as the date for peaking carbon emissions for building materials.

Although that aligns with the nationwide target, as recently as September the cement industry had proposed maxing its carbon footprint by 2023, while the building materials sector as a whole would reach its peak by 2025. It follows a similar retreat in the steel industry’s carbon goals , and plans for a massive expansion in coal-fired power generation.

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Building materials are the No. 3 emitter after power and steel. China’s cement industry alone is responsible for as much carbon as the whole of India’s energy production, according to BP Plc data. Just as China continues to prioritize coal to meet its energy security needs , the best explanation for the scaled-back ambition is economic: Beijing wants to create enough headroom to allow the kind of massive spending on public works that it has deployed before to bolster its economy.

“The industries can only deliver a peak once Beijing stops using construction stimulus to prop up GDP,” Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air, said on Twitter.

The new deadline is somewhat confounding because infrastructure spending over time has become less reliant on cement and steel as the economy has evolved. Moreover, China is already on course for its second successive year of lower steel output, mandated by the government to control emissions, while the crackdown on the property market that began last year is a deliberate policy of shrinking the sector’s outsized influence on the economy.

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Indeed, given the long-term decline in steel demand and the fact that Chinese steelmakers are aggressively investing in cleaner technologies, the country’s mills may have already hit peak emissions in 2020, the Institute for Energy Economics and Financial Analysis said last year.

What can be deduced from the deadline is that, once again, the economy has the upper hand in the tussle with China’s green ambitions. Beijing’s excessive caution will surely disappoint those hoping for a faster transition, including the delegates currently gathered at the COP27 climate summit in Egypt.

The Week’s Diary

(All times Beijing unless noted otherwise.)

Wednesday, Nov. 9

  • China inflation data for October, 09:30
  • China to release October aggregate financing & money supply by Nov. 15
  • EU-China daylong workshop on carbon market, 09:30
  • China farm ministry’s monthly crop supply-demand report (CASDE)
  • CCTD’s weekly briefing on China’s coal market, 15:00
  • Antaike copper conference in Nanchang, Jiangxi, day 1
  • CIIE expo in Shanghai, through Nov. 10

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Thursday, Nov. 10

  • Antaike copper conference in Nanchang, Jiangxi, day 2
  • CIIE expo in Shanghai ends

Friday, Nov. 11

  • China weekly iron ore port stockpiles
  • Shanghai exchange weekly commodities inventory, ~15:30
  • SMM nickel, manganese & stainless steel summit in Qinzhou, Guangxi, day 1

Saturday, Nov. 12

  • SMM nickel, manganese & stainless steel summit in Qinzhou, Guangxi, day 2

On The Wire

China’s major copper smelters have called on Beijing to issue policies to “reasonably control” domestic smelting capacity in a bid to ensure supply-chain security and improve quality.

China’s producer prices fell into deflation for the first time in nearly two years as Covid outbreaks and lockdowns dragged on demand and some global commodity prices continued to slide, pressuring companies to cut prices.

In recent days, investors bought up the yuan, copper and Chinese stocks largely on unconfirmed social media posts that Beijing is considering an exit from its stringent Covid-Zero policy.

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financialpost.com