China Boosts Coal To Gas Switching, But Fight On Pollution Gets Tougher

In its fight against coal emissions pollution, China significantly stepped up its coal-to-natural gas and coal-to-electricity switch to 35 cities last year from 12 cities in 2017, but the next steps to curb stifling pollution levels in cities would be much harder, according to Chinese Environment Minister Li Ganjie.

A total of 4.8 million Chinese households made the switch from coal to natural gas and electricity in 2018, up from 4 million households who had switched away from coal in 2017, Reuters quoted Li as saying at a press conference on Monday. 

“The things that could easily be done have already mostly been done, and the things that need to be done afterwards are much harder,” Li said.

In the previous winter, the coal-to-natural gas switch policy led to gas shortages in many areas in north China, but the country has managed its natural gas imports and needs much better this winter season. The policy to curb coal use resulted in China becoming the key driver on the global liquefied natural gas (LNG) market over the past few years.

In 2018, China’s natural gas imports—including pipeline and LNG imports—soared by nearly 32 percent from 2017 to a record 90.39 million tons, solidifying China’s position as the world’s biggest importer of the fuel.

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Rising domestic production and improved pipeline infrastructure help China to ration natural gas flows to avoid last winter’s severe gas shortages, and its LNG demand growth—albeit at a slower pace—is still set to be the key driver of global LNG demand growth.

According to the BP Energy Outlook 2019 published last month, China’s energy demand growth will slow down to 1.1 percent annually through 2040, less than one fifth of its pace in the last 22 years—which was 5.9 percent per year. Despite slowing energy demand growth, China will still be the world’s biggest energy consumer, accounting for 22 percent of global energy consumption in 2040, BP says.

The share of coal in China’s energy mix will drop to 35 percent in 2040 from 60 percent in 2017, BP has estimated, while it sees Chinese oil import dependence rising to 76 percent in 2040 from 67 percent in 2017, and gas import dependence growing to 43 percent from 38 percent.  

By Tsvetana Paraskova for Oilprice.com

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