European Union Chamber of Commerce in China released Carbon Neutrality: The Role of European Companies in China’s Race to 2060 recently, which identifies areas where EU-China cooperation can be deepened to accelerate China’s carbon neutrality drive. Fortunately, European companies have deployed effective decarbonisation technologies in their home markets and want to work with China to help it quickly frontload, presenting a strong argument for deepening European Union-China industrial cooperation.
“The difficulty is to manage new technologies economically”
The report shows about 70% of European companies are planning or already taking measures to decarbonise their China operations. Guido Giacconi, the Vice President of European Chamber, said that European companies’ neutrality pledge and process are from their headquarters, so as an important market, these companies must comply with their pledge in China. Also, what they are doing also depend on the size, geography and many aspects of the company. “The European companies are taking very seriously in the challenge of carbon neutrality.” Mr. Giacconi said.
European companies have deployed effective decarbonisation technologies in their home markets, whose experiences or methods can help in China’s operations. From Mr. Giacconi’s point of view, the best innovation coming from Europe companies is more on the approach than technologies. “Technologies alone cannot allow achieving carbon goals or solving the problems, so the difficulty is to manage new technologies economically. That is an important part of decarbonisation.”
“Renewable energy technologies are available over thousands of years, like using wind.” Mr. Giacconi said, “What are the differences? Of course, the new technology can further reduce energy dependency and increase energy efficiency. The challenge is how to use them for really achieving carbon neutrality.”
European companies think China can achieve goals
The report shows that more than 70% of European companies think China can achieve the goal of peaking its carbon emission before 2030 and becoming carbon neutral by 2060. Mr. Giacconi explained that the goals were announced by China’s top leader, so based on the experience of the past years, members of European Chamber trust China can do that.
“It’s very likely that China would achieve the carbon peak by 2030. In some investment areas, there has been already achieved carbon peak.” Mr. Giacconi said, China has 40 years to be carbon neutral, but other areas like Europe, Japan, and the U.S., took much more between the peak and carbon neutral, so China may need 40, 50 years, or even 60 years in some cases, to achieve carbon neutral. So the challenge is huge.
“When I was a student in high school, we already know climate change theoretically.” Mr. Giacconi talked about the history of decarbonisation in European, “Europe implemented a lot, and determined energy revolution in France, Germany, Spain, in 1990s and 2000s.”
From technology to mechanism, European companies want to play roles in decarbonisation
“The emission in China affects Europe, the emission in Europe affects the U.S., and the emission in the U.S. affects China, so a single economy cannot tackle carbon neutrality alone. The fight against climate change is the only global issue where all the powers agree that they must cooperate.” Mr. Giacconi said, European companies want to play a crucial role in China to achieve carbon neutrality, so European Chamber approached this paper for supporting and recommending member companies, not only allowing European companies to play roles in this field, but also to reform the energy market in a way to be transparent, reliable, flexible and accessible.
As Mr. Giacconi introduced, there are several EU-China dialogues and platforms in energy cooperation, such as the EU-China energy cooperation platform, to discuss policies and regulations. “European Chamber also recommends that Europe and China should deepen their dialogue on the cross-border adjustment mechanism (CBAM), which will be introduced in 2023,” he said.
From a technical standpoint, the report said that biogas is mature enough for wide commercialization in China, but a lack of clear incentives and the absence of a stable feedstock supply has led to biogas development lagging far behind. Fortunately, European companies have a wealth of experience in biogas production, utilization and market development that China could tap into. “Biogas definitely is something where Europe can enter the field in China.” Mr. Giacconi said, “We advise China should pursue a model, an economic and dynamic model with a clear road, and put investments and the subsidies in this sector, that could be the most promising for China.”
Mr. Giacconi said, the European Chamber hopes that China will cooperate with Europe for avoiding the same kind of mistakes that Europe did in the past. He took the emission trading system (ETS) as an example, “In a period, ETS was not effective, but since the price adjustment mechanism, ETS is going very well in European decarbonisation. We do believe China has learned a lot about what happened on ETS. We will see that the ETS in China plays the role of decarbonisation very much.”
With the publication of the report, the European Chamber also discusses providing different perspectives on China’s decarbonisaztion. “For example, now we are coordinating the different working groups, such as energy, environment, automotive, aviation, finance, etc, to cooperate together.” Mr. Giacconi said, “We are creating actions and platforms for communication, and encourage working groups to organize and to join events towards Chinese stakeholders for contributing from different perspectives.”
Mr. Giacconi also mentioned that European Chamber hopes the cooperation between Europe and China for addressing climate change together in poor countries. “The poor countries are going to be affected most in climate change economically, but the cooperation is not only for business development, but as a joined action of China and Europe for climate change effects to poor countries. We'll have advantages for both China and Europe from supporting decarbonisation to poor countries, because the planet is one.”
Decoupling from China is such a popular view globally now, but Mr. Giacconi thinks that it will be important that China and the EU cooperate in the field of climate change, and the scale of the challenge means that shared approaches and frameworks will be necessary. In this regard, given their experience working on decarbonisation related challenges on the ground in both Europe and China, European business has a lot to offer.
“China has done a lot”
China’s economy has developed rapidly in recent 10 years, and there are big changes in environmental protection. Mr. Giacconi shared his personal experience living in Beijing these years, “For climate change, I do see people from studying climate change perception to having the understanding of why should we contribute a small piece of behavior to the climate change.”
“On the energy-saving standpoint, I do see people start to think of saving energy, reducing wastes, and starting to sort waste because this is good.” Mr. Giacconi said, “On the other hand, there are other experiences that people have not thought of and could be changed differently.”
Mr. Giacconi recommended that the government and the media should play their roles in education, especially using schools to educate kids to be environmentally friendly and to reduce the usage of energy as much as possible. “At the same, if European people don’t change their behavior, it is impossible to achieve the goals.”
“In these years, China has done a lot of fighting air pollution.” Mr. Giacconi recognized the change in Beijing’s sky, “In Beijing, today the sky is blue, while it was grey 10 years ago, so people see, wow, China has done a lot on the right path.” However, what has been done in Beijing, Shanghai and other big cities is only the start. “Now, there is a long journey in front of us that everybody should and must contribute. This is very possible because I see more changes, I see people become more self-conscious of what’s happening.”