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China Revises Gas Consumption Forecasts Down, But Actual Usage Keeps Growing

Arvind Datta
Arvind is a recluse who prefers staying far away from the limelight as possible. Be that as it may, he keeps a close eye on what's happening and reports on it to keep people rightly informed.
Published: August 12, 2021
Chinese experts have revised down the country's natural gas consumption following Xi Jinping's pledge last year to reduce carbon emissions. (Image: pixabay / CC0 1.0)

China’s consumption of fossil fuels has risen over the past decades as its economy grew bigger. The country’s gas demand was earlier estimated to hit 700 billion cubic meters by 2050. However, industry experts have recently cited lower numbers in response to Chinese leader Xi Jinping’s vow last year that China would hit peak carbon emissions by 2030 and achieve “net-zero” neutrality by 2060.

At a conference in June, Tang Shanhua, an official from the state-owned oil and gas pipeline firm PipeChina, predicted that the country’s gas consumption would be around 526 billion cubic meters by 2030, grow to 650 billion cubic meters by 2035, and then eventually settle down at around 550 billion cubic meters by 2050, which will be 150 billion less than the previous estimate. He made these predictions after consulting several domestic studies.

Hou Chuangye, vice president of gas sales at CNPC’s PetroChina subsidiary, also predicts China to achieve natural gas peak demand by 2035.

The Chinese experts are setting new lower gas usage targets for the future, even though the country’s natural gas consumption, at present, is on an upward trend.

No declining trend despite goal to cut consumption

According to National Bureau of Statistics, the country’s gas consumption in 2020 was 326.2 billion cubic meters, up by 7.2 percent from 2019. And this year’s numbers do not show any declining trend. According to National Development and Reform Commission, China’s natural gas consumption through May 17 this year is up 17.1 percent compared to the same period last year. 

“State-controlled Sinopec forecasts that China’s gas demand will increase to 350bn-360bn m³ this year, 9-12pc higher than the company’s estimate of consumption in 2020, officials from the company’s gas sales unit said. The growth will be driven by demand from the gas-fired power and industrial sectors,” reported Argus Media.

China Electricity Council (CEC) expects gas-fired power capacity to reach 150GW by 2025 at an annual growth rate of 9.6 percent. In June, Zhu Xingshan, senior director, Planning Department CNPC, stated at a conference that the share of natural gas in the country’s energy consumption mix will “significantly” increase from 2030 to 2035. He predicts natural gas to make up 12 percent of the energy mix in 2030 when compared to 8.7 percent in 2020.

The International Energy Agency expects China’s gas demand to increase by 10 percent this year and by 7 percent annually through 2024, with total consumption rising by 95 billion cubic meters.

As such, China’s own estimates plus international estimates from organizations like the IEA affirm that gas consumption will keep rising in the near term, at least until 2030. Even the revised 550 billion cubic meters gas consumption in 2050 predicted by Shanhua is still more than 68 percent higher than the 2020 consumption figure of 326.3 billion cubic meters.

In September 2020, Chinese Communist Party (CCP) General Secretary Xi Jinping vowed that China, the world’s largest greenhouse gas polluter, would achieve peak emissions in 2030 and go carbon neutral by 2060. Pictured is the Huangpu River across the Wujing Coal-Electricity Power Station in Shanghai. (Image: JOHANNES EISELE/AFP via Getty Images)

In addition to rising gas demand, the increasing use of coal also signals that China’s carbon emissions will likely keep growing over the next few years. Over half of the country’s energy needs are met through coal. Around 37 percent of China’s economic activity in 2020 was accounted for by coal-fired heavy industry.

China’s 14th five-year plan for 2021-2025 does not introduce any measures to curtail the use of coal. In provinces of Shanxi and Inner Mongolia, both of which are major coal-producing centers, energy production is expected to rise by 1 percent to 4 percent annually. Much of the production is inevitably coal-fired. In 2020, China added 38.4 gigawatts of new coal-powered capacity, which is over three times the capacity built in the rest of the world combined. “The fact is coal is still the king here in this country… One narrative is generated by high-level political announcements to achieve zero carbon within the next four decades… The other narrative is that we will still need to use coal because it ensures energy security,” Li Shuo, who follows carbon emissions and energy policy in China for Greenpeace East Asia, said to NPR.