Significance of China's Net-Zero Target

Context:   China's carbon pledge is a massive financial and technological undertaking. India must prepare for energy transition too. 

Constraints to the China's net-zero target

• Size and complexity of targets:

• While the share of fossil fuels in the energy mix declined from 96 % to 85 % in the last 30 years, thus an anticipated  decrease from 85% to 20% is a big challenge.

• Despite all the investments in renewables, coal's share dropped just 5% in the last 30 years 

• Big investments are required: to the tune of $6 trillion and $6.5 trillion in the coming 40 years for this energy transition to take place.

• Acceptance that carbon emission can never go to zero: Emissions would only reduce from 9,500 MT today to about 1,500 MT in 2060, even after investments.

Significance of China's net-zero target

• Limiting global warming to 2 degrees Celsius: China accounts for almost 30 % of global emissions. 

• Bearing on the energy transition across the world: Chinese announcement of net-zero emission by 2060 will put pressure on other wealthy economies to set their own explicit targets.
• Various energy mix trend for the future:

• Decline in Oil Consumption: The Chinese and global oil demand will also peak between 2025 and 2030.
• Decline in Coal consumption: Coal assets have a clear terminal value problem as the vast majority of the world's current coal reserves will never be burned.
• Gas consumption will continue: Gas will be the only fossil fuel that will be consumed more as a backup to handle the intermittency of renewable power.
• Dominance of Solar Energy:  It will become the biggest winner among the renewable technologies.
• Wind energy also gains: Wind will also grow with its share moving from 3 % of China's energy mix to 20 %
• Rising Hydrogen technology: to reach up to 13 % of China's energy mix by 2060 and will have large applications in fuel cells and commercial transport.

Way Forward for India

• Need for technological advancements: will require massive resources and access to new technologies like hydrogen fuel cells to meet a zero net-carbon target. Advantages of a fuel cell include: 
• High energy density more than 100 times greater than lithium-ion batteries,
• Ideal in powering heavy commercial transport vehicles, with longer range and a much shorter charging time.

• Re-inventing Public Sector Units (PSUs): related to fossil fuels and oil exploration to rejig their business model.

Conclusion: India must keep up the momentum to ensure access to technology, supply chain and production capacity for renewables.