Power switch

At the 75th United Nations General Assembly in September, President Xi Jinping pledged that China will strive to reach peak carbon emissions before 2030 and carbon neutrality before 2060.

The automotive industry has a central role to play in achieving the goal of carbon neutrality. The energy, industry and transport sectors account for the majority of carbon emissions－more than 80 percent of total CO2 emissions in China in 2018－with transport the biggest culprit, road transport in particular.

Because of the outbreak of the novel coronavirus pandemic in 2020, the automotive sector suffered worldwide disruptions. But as the automotive sector plays such an important role in economies worldwide, a number of countries have launched stimulus packages to revive it. This is driving the market's resilience as governments and companies are using this stimulus window to hasten the switch from internal combustion engines to new energy vehicles.

Having more electric vehicles on the roads is an effective way of achieving transport decarbonization. After all, battery electric vehicles (not including hybrids) consume electricity and do not emit any CO2, compared to around 119 grams of emissions per kilometer from internal combustion engine vehicles. However, if the electricity used to charge the vehicle is generated solely from coal, the equivalent CO2 emissions are 139 g/km, which is even higher than for internal combustion engine vehicles. Around 60 percent of electricity in China is produced using fossil fuels. The production of lithium-based batteries generates an additional 50 percent to 100 percent in total material emissions.

Unfortunately, current policies only focus on the emissions phase. For example, beginning 2021, the European Union will require all new passenger vehicles to meet emissions standards set at 95g/km. China, for its part, has set corporate-average fuel consumption at 5 liters/100 km for passenger cars. However, to achieve carbon neutrality, there is need for an integrated and holistic carbon policy that takes into account the entire footprint throughout a vehicle's life cycle and the entire value chain. This includes the life cycles of the raw materials used, the manufacturing of parts, whole vehicle assembly and distribution, usage with energy and fuel consumption, and recycling, remanufacturing and disassembly. To pave the way, the World Economic Forum suggests taking the following steps:

Set up a life cycle emissions calculation framework; develop a decarbonization roadmap for the main life cycle phases; work with the energy and transport sectors to maximize the effort; and integrate the automotive and mobility sectors into carbon trading systems.

The China Automotive Technology and Research Center's China Automobile Low Carbon Action Plan Research Report and the World Economic Forum's Circular Cars Initiative report point out that internal combustion engine vehicles emit 80 percent of their CO2 during the use phase. And that number is still 55 percent－not zero－for battery electric vehicles because of the energy supply source.

Further emissions reduction efforts need to come from the materials used in the construction of NEVs and during the manufacturing phase. For instance, using recycled alloy and composite materials combined with a disassembly and recycling-friendly vehicle design could eliminate emissions from the material phase. Additionally, using renewable energy during the production phase will help lower emissions during that phase. The Volvo car plant in Chengdu, for example, now uses 100 percent renewable energy for its operations and is a reference point for companies studying the use of green energy in production to control emissions.

However, achieving net-zero carbon emissions will require comprehensive collaborations between the energy and transport sectors. By 2030, China will have some 80 million electric vehicles on its roads, using its electricity infrastructure. These vehicles will be both power consumers and energy storage units, enabled by vehicle-to-grid technologies. This will help balance grid loads between peak and valley hours and improve renewable energy use, such as wind and solar power.

Megacities also need to achieve sustainable urban mobility. Among Chinese cities, Shanghai and Beijing had the lowest and second-lowest road area per inhabitant in 2018, with only 4.6 square meters and 7.6 square meters per person respectively. Therefore, pushing inhabitants to invest in private electric vehicles will not be the most desirable solution. It will be much better to electrify public mobility options, such as bus fleets and expand shared mobility. The CO2 emissions from bus fleets and shared mobility per passenger could be significantly reduced, especially during the use phase.

Another factor to take into account is how to integrate the carbon trading system and carbon sinks to achieve the last mile of net-zero emissions. China's Ministry of Ecology and Environment released the Administration Measures for Carbon Emissions Trading (trial implementation) in January, which took effect on Feb 1. With the development of a carbon trading system and the addition of the automotive and mobility sectors in the future, China will soon have a clear and comprehensive roadmap to achieve net-zero emissions.

Because decarbonization is indispensable to keeping the global temperature rise within 1.5 C by the middle of this century, China's automotive sector aims to be one of the first to realize peak emissions by 2028. To do so, however, will require additional collaborative efforts aimed at sustainable and low-carbon development.

The author is China lead of Automotive and Autonomous Mobility at the World Economic Forum. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.