As China aims to achieve carbon neutrality by 2060, the country's metals and mining industry has taken the lead by setting goals for carbon emissions to peak before 2030, when the country's overall emissions are expected to reach their highest.
The Chinese government is consulting with industry associations and companies on a draft plan for greenhouse gas emissions from the nonferrous metals industry to peak in 2025, Ge Honglin, chairman of the China Nonferrous Metals Industry Association, told an industry meeting April 6.
The sector aims to cut its carbon emissions by 40% through 2040, Ge said, urging the energy-intensive industry to ramp up efforts to cut emissions by using more clean energy, green technology and recycled raw materials.
Last year, the nonferrous metals industry accounted for 4.7% of the overall carbon emissions in China, the world's largest greenhouse gas emitter, according to the China Nonferrous Metals Industry Association.
Carbon emissions from China's steel industry, the largest industrial source of air pollutants in the country, are also forecast to peak by 2025 then fall 30% through 2030, the China Metallurgical Industry Planning and Research Institute, a government-backed think tank, said last month.
Ge, the former chairman of Aluminum Corporation of China, warned that capacity expansions in the aluminum, copper, lead and zinc industries will be strictly limited.
The ceiling for China's aluminum smelting capacity has been set at about 45 million tonnes per year under China's supply-side reform. ING Bank Senior Commodities Strategist Yao Wenyu said Chinese capacity will soon hit that ceiling and cap future supply growth. Yao earlier told S&P Global Market Intelligence that the sector will likely see increasing demand and supply constraints, bringing the global aluminum market to a structural deficit in the medium to long term.
Refinitiv's lead carbon analyst, Qin Yan, said in an interview it is quite clear that Chinese aluminum producers need to ramp up efforts to decarbonize their production as pressure mounts amid the push toward carbon neutrality. Electricity consumption is the major source of emissions in Chinese aluminum production, Qin said, noting that the sector is expected to be covered by China's national carbon trading market in the future.
According to data from the International Aluminium Institute, China's aluminum smelting relies heavily on coal-fired power for electrolysis. China Nonferrous Metals Industry Association data showed aluminum smelting accounted for 6.7% of the country's electric consumption in 2020.
Both aluminum and copper are expected to have a role to play in China's goal to increase the share of clean energy in its power mix and electrify its transportation sectors due to their use in the electric vehicle industry and renewable power plants.
The nonferrous metals industry's emissions reduction plan will have a limited impact on China's copper production as the sector is a relatively smaller emitter, a Beijing-based metals analyst told Market Intelligence. The analyst said the Chinese copper smelters will focus on technology upgrades to improve energy efficiency and on using more clean energy in their production.
According to an April 1 report from Guotai Junan Futures, copper smelting only accounted for 0.2% of China's overall emissions. Senior researcher Ji Xianfei said in the note that the Chinese copper market will move to a deficit between 2021 and 2025, from a surplus in 2020, amid the surging demand from the EV and power sectors.