Big Corporations Pledge to Work With Chinese Government to Eliminate Carbon Emissions by 2060

The People’s Republic of China’s president, Xi Jinping, has set the goal to eliminate net carbon dioxide emissions by 2060. Thus, the nation’s legislators convened in Beijing to set out a timetable to achieve the goal.

Nevertheless, many large companies and emitters in China have been publicly embracing the carbon neutrality goal.

Their Pledges to Reduce Carbon Emissions

PetroChina has promised to spend up to US$1.5 billion every year for the next five years on low-carbon energy projects. In January, the company vowed to deploy new technologies to curtail their emissions. 

Meanwhile, Tencent Holdings has promised to use artificial intelligence (AI) and solar energy to power their offices and data centres.

According to Xu Yuan, carbon neutrality promises from these businesses are meaningful, a resource management professor at the Chinese University of Hong Kong. These promises can be used to assess the success of their management teams.

In January, Chen Derong, chairman of the state-owned Baowu Steel Group, said that his company would increase research to promote the steel industry’s sustainable development, accounting for 15 percent of China’s carbon emissions. 

It will encourage the use of digital technology, such as artificial intelligence (AI), to integrate management and production in order to make better use of resources and energy. 

The world’s largest steelmaker pledged to reach peak carbon emissions by 2023. To achieve net-zero carbon by 2050 target, he planned to reduce carbon emissions output by 60 percent by 2035. 

In the same month, China Aluminum Corp. and China Hongqiao Group released a joint seven-point plan for low-carbon development, with a similar emphasis on technological adaptation.

Future Decarbonisation Demonstrations

Despite the vague commitments and a coherent roadmap, analysts believe the corporate strategy is critical. These pledges are likely to have real consequences for the energy sector’s decarbonisation. 

According to Li Yifei, China will see some high-profile decarbonisation demonstration projects from major Chinese oil and steel firms in the coming months.

“There are not many concrete measures in the oil and steel enterprises’ pledges so far, but the carbon neutrality vision will start to affect enterprises’ decision-making processes and future investments,” said Yan Qin, a lead energy analyst at data service Refinitiv. “In order to [reach] peak emissions before 2030, power and industry sectors would have to take measures to improve efficiency and reduce emissions.”

Carbon trading, Qin believes, would play a significant role in this process. Last month, China formally unveiled a national carbon trading scheme, but actual trading has yet to begin. For the time being, only large power producers are subject to emissions limits.

Given that China Inc. is the world’s largest carbon emitter, governments and businesses worldwide will be keeping a close eye on its actions. 

China Inc.’s operations now stretch far beyond the country’s borders, according to NYU’s Li, with investments in international production on the rise.

“The carbon footprint of the Chinese economy is global,” he said. “It would be a shame for these SOEs (state-owned enterprises) to make decarbonisation gains at the home market while generating even more emissions overseas.”