Natural Gas Use Contributed to Cleaner Air and Lower Emissions in China but is Slated to Take Second Seat to Renewables in Future Plans

China’s National Bureau of Statistics publishes an official Balance Sheet for natural gas both in English and Chinese. It illustrates that gas consumption has more than tripled over the past 10 years from 89.5 billion m3 to nearly 306 billion m3 in 2019. This reflects China’s strategy of the decade to introduce more natural gas in its energy mix with the aim to replace coal as a fuel both for power generation as well as in industrial processes.


In 2019 China’s domestic output of natural gas reached 176.2 billion m3, more than doubling domestic output since 2009. Despite having significant gas resources and investing in exploration, domestic production has not been able to keep pace with the rapidly growing demand for energy, thus forcing China to import nearly 45% of its natural gas. In 2021, liquid natural gas (LNG) imports increased by 18%, with Australia (39.3%) and the US (11.6%) being the biggest Chinese LNG suppliers. Meanwhile, pipeline gas imports rose by more than 22%. Russian gas currently accounts for only 6.26% of the total gas imported to China in 2021, but still represents a year-on-year growth of 154.2%. Russia is supplying China through the Power of Siberia 1 pipeline which connects China to Russia’s Yakutia Gas fields and has delivered 16.5 billion cm3 of Gas in 2021. China and Russia are currently discussing four more pipeline projects.

The largest consumer of natural gas has been the industrial sector comprising production of cement, steel or chemicals for example. This is followed by residential use and use of transport, storage and post.

It is difficult to assess the exact contribution of natural gas in lowering overall greenhouse gas emissions. Although, positive effects of increased natural gas use in reducing the levels of the PM2.5 indicator in air pollution have been documented. As to CO2 emissions, the International Energy Agency states in their study “An Energy Sector Roadmap to Carbon Neutrality in China” that the “energy sector is the source of almost 90% of China’s greenhouse gas emissions” so addressing the energy mix and diversification thereof is viewed as one means to achieve low-carbon targets. China has therefore made efforts over the past two decades to diversify its energy mix away from heavy reliance on coal to a broader spectrum, which includes a transition from coal to gas. China views natural gas mainly as a bridge fuel until more renewable sources become available. Together with concomitant policies such as energy saving measures, support for the development of energy efficient technology as well as electrification of infrastructure, the country had managed to achieve by the end of 2018 a decrease of its CO2 emissions per unit of GDP (carbon intensity) by 45.8%, compared with the level in 2005.

Policies regarding an energy reform have been in proliferation since the early 2000’s following a phase of rapid increase in energy consumption concomitant with accelerated economic development and investment in industrial production. In 2007 the “National Climate Change Program” was issued making climate change issues a national policy. The 11th FYP continued the emphasis on energy efficiency as a means of reducing energy consumption, while the 12th and 13th Five-Year Plans started to focus on low-carbon, green, sustainable development as well as market approaches. In addition, with the effects of serious air pollution becoming increasingly evident – by 2011 pictures of Beijing being shrouded in smog went around the world – public discontent and health issues, the government was propelled to introduce policies against air pollution, especially against the ultra-fine particles of less than 2.5 microns (PM2.5). The first “Air Pollution Action Plan”, issued in 2013, targeted among others a cap on coal-related emissions, which led to a switch to natural gas in the residential but also industrial sectors. Between 2014 and 2018, natural gas consumption increased by 18%. According to the recently released 14th FYP for the energy sector, by 2025, China targets have a “comprehensive energy production capacity” of more than 4.6 billion tons of standard coal equivalent (tce) annually as well as producing 200 million tonnes of oil and more than 230 billion m3 of gas a year.

Rating: The switch to natural has certainly supported the development towards cleaner air in China’s heavily smog-ridden cities as well as played its role in reducing carbon intensity. It is certainly not the final answer, and the newest sectoral 14th Five-Year Plan for energy seems to reflect that as it pushes far stronger for the expansion of renewable energy and hydrogen. Coupled with increased efforts in electrification of infrastructure, in construction or transport, China seems certainly clear about what to do to achieve its low-carbon transition. However, electrification will not provide the necessary energy to continue fueling China’s manufacturing industry and whether “green” hydrogen will be available to the industry in sufficient volumes is still out to see. Gas – and oil – will therefore continue to play a crucial bridging role in China’s energy mix. The thumbs up for China is for the right intent and for having understood what needs to be done to move to a low-carbon future. How steady it will be implemented against the need for further economic development and energy security remains to be seen.


This Post was submitted by Climate Scorecard Country Manager: Annette Wiedenbach



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