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Investment into new technologies to advance renewable sources of energy will be crucial in achieving security and affordability.

The much-anticipated start to the 2021 United Nations Climate Change Conference (COP26) was preceded by several last-minute announcements from states setting out new emissions pledges. Most notably, new policy statements were put forward by Australia, China, and Saudi Arabia, accompanied by updates to their Nationally Determined Contributions (NDCs) submitted under the Paris Agreement.

AUSTRALIA – investment in technologies to reduce emissions

On 26 October 2021, the Australian Government released Australia’s whole-of-economy Long-Term Emissions Reduction Plan (the Plan). The Plan announces that ‘Australia will set out its net zero by 2050 commitment through its updated NDC. As with the 2030 target already enshrined in its NDC, Australia will not legislate its long-term net zero by 2050 target’.1 The Plan does not announce any interim emission reduction targets, goals or commitments, leaving Australia without any formal interim position at the national level for the period between 2030 and 2050.

The Plan is framed by reference to the policy goals of preserving energy security and affordability, and particularly in Australia's regional areas, economic prosperity and job security. Under the Plan, technology is to be the main driver to reduce emissions, accounting for a 40% share of the emissions reductions required to reach net zero by 2050 (from 2005 levels).2 The Plan aims to stimulate rapid development of low emissions technologies through public and private investment, in order to bring these technologies to cost parity with higher emitting alternatives. An investment and incentives framework will be used to enable deployment of these lower emissions technologies at scale. Among other reductions, the Plan envisages a 10-20% contribution through international and domestic offsets and a 15% contribution through future ‘technology breakthroughs’.3 For further information, please see our previous blog post here.

CHINA – new goals and measures to aid progression

In line with domestic and international expectations, China released several climate policies in October 2021. At the international level, China submitted two key documents to the secretariat of the UN Framework Convention on Climate Change on 28 October 2021: an updated NDC entitled China’s Achievements, New Goals and New Measures for Nationally Determined Contributions 4 and its Mid-Century Long-Term Low Greenhouse Gas Emission Development Strategy.5

The updated NDC assessed progress on the implementation of China's first NDC submitted in 2016. As Article 4 of the Paris Agreement requires each state to propose successive NDCs representing a progression from existing pledges, the updated NDC proposed new goals and measures to achieve emissions reductions. We set out below a table comparing China's original NDC submitted in 2016 and the updated NDC.

 

Climate mitigation goals by 2030 in the 2016 NDC

Climate mitigation goals by 2030 in the NDC as updated in 2021

Absolute emissions reduction

To achieve the peaking of CO2 emissions around 2030 and making best efforts to peak early;

To have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060;

Carbon intensity

To lower CO2 emissions per unit of GDP by 60% to 65% from the 2005 level;

To lower CO2 emissions per unit of GDP by over 65% from the 2005 level;

Energy mix

To increase the share of non-fossil fuels in primary energy consumption to around 20%;

To increase the share of non-fossil fuels in primary energy consumption to around 25%;

Forest stock

To increase the forest stock volume by around 4.5 billion cubic meters on the 2005 level;

To increase the forest stock volume by 6 billion cubic meters from the 2005 level;

Renewable energies

N/A

To bring its total installed capacity of wind and solar power to over 1.2 billion kilowatts by 2030.

Domestically, China's climate policies towards carbon neutrality in 2060 are described by officials as formed in a '1+N' structure, where the 1 represents overarching policies/top level design at central level and the N represents numerous sectoral policies. The overarching policies which have been released prior to COP26 comprise the following:

  • Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy,6 released by the State Council and the Central Committee of the Communist Party of China on 24 October 2021. It sets out the principles and targets for China's emissions peak and carbon neutrality, and around 35 actions to promote the full low carbon transition of the economy and society. These include, for example, changes to the industrial structure, energy structure, and transportation system, as well as advances in technologies and carbon sinks.
  • Action Plan for Carbon Dioxide Peaking Before 2030,7 released by the State Council on 27 October 2021. This policy covers the period of the coming decade, which corresponds with China's 14th and 15th Five-Year-Plan. As always, the low carbon transition of the energy sector is placed at top priority. The quantifiable climate targets set out in this policy (including in relation to the percentage of non-fossil fuels, carbon intensity and the 2030 emissions peak) are the same as provided in China's updated NDC.

In addition, on 27 October 2021, China also published its annual 'white paper' titled Policies and Actions of China in addressing Climate Change. 8 These white papers have been published since 2011 and are updated annually. They usually include sections on climate mitigation, adaptation, policies and mechanisms, capacity building and international cooperation. This structure has been slightly changed this year to highlight China's increasing emphasis on addressing climate change, including a new section one ('New ideology of China in response to climate change'), and a new section three ('Historic changes in China's response to climate change').

SAUDI ARABIA – renewable diversification to meet demand

Saudi Arabia ratified the Paris Agreement on 3 November 2016.9 On 23 October 2021, Saudi Arabia submitted an updated NDC, building on its initial 2016 submission.10 The updated NDC targets 'reducing, avoiding, and removing' emissions equivalent to 278 million tonnes of carbon dioxide annually by 2030, with 2019 as a baseline.11 This compares with Saudi Arabia's initial 2016 target of 130 million tonnes by 2030. The updated NDC was coupled with a pledge from Crown Prince Mohammad Bin Salman, made at a Saudi-led climate change forum, that Saudi Arabia would reach net zero emissions by 2060.12

In pursuit of these targets, Saudi Arabia aims to meet approximately 50% of its domestic electricity demand via renewable sources by 2030.13 New technologies are also intended to play an important role. Saudi Arabia envisages it will host 'global hubs' for carbon capture, utilisation and storage, enabling the removal of emissions from continued hydrocarbon exploitation, while facilitating blue hydrogen production.14 Alongside, Saudi Arabia plans to begin the production of green hydrogen from ammonia at a rate of 1.2 million tonnes annually by 2025, through a solar and wind-powered flagship facility.15 Additional measures will be taken to improve methane emissions management, enhance energy efficiency in infrastructure, and support nature-based solutions.16

Although Saudi Arabia views the net zero transition as providing an opportunity to diversify its economy away from oil,17 significant Saudi oil production and exports will likely continue into the foreseeable future. Saudi Arabia has expressly stated its desire to maintain what it refers to as its 'leading role in enhancing the security and stability of global energy markets'.18

More on COP26

 
  1. Australian Government, Australia's Long-Term Emissions Reduction Plan, available at: <https://www.industry.gov.au/sites/default/files/October%202021/document/australias-long-term-emissions-reduction-plan.pdf>, page 101. See also Australian Government, Updated First Nationally Determined Contribution, available at: <https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Australia%20First/Australia%20Nationally%20Determined%20Contribution%20Update%20October%202021%20WEB.pdf>.
  2.  Plan, page 15.
  3. Ibid.
  4. People's Republic of China, Updated First Nationally Determined Contribution, available at: <https://www4.unfccc.int/sites/NDCStaging/pages/Party.aspx?party=CHN>.
  5. People's Republic of China, Long-Term Strategy, available at: <https://unfccc.int/sites/default/files/resource/China%E2%80%99s%20Mid-Century%20Long-Term%20Low%20Greenhouse%20Gas%20Emission%20Development%20Strategy.pdf>.
  6. National Development and Reform Commission, Working Guidance, available at: <https://en.ndrc.gov.cn/policies/202110/t20211024_1300725.html>.
  7. National Development and Reform Commission, Action Plan, available at: <https://en.ndrc.gov.cn/policies/202110/t20211027_1301020.html>.
  8. State Council Information Office, White Paper, available at: <http://www.news.cn/english/2021-10/27/c_1310272455.htm>.
  9. United Nations Treaty Collection, Paris Agreement, <https://treaties.un.org/Pages/ViewDetails.aspx?src=IND&mtdsg_no=XXVII-7-d&chapter=27&clang=_en> (accessed 27 October 2021).
  10. Kingdom of Saudi Arabia, Updated First Nationally Determined Contribution, available at: <https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Saudi%20Arabia%20First/KSA%20NDC%202021%20FINAL%20v24%20Submitted%20to%20UNFCCC.pdf>.
  11. Ibid, page 2.
  12. Saudi Green Initiative, Press Release: His Royal Highness the Crown Prince announces the Kingdom of Saudi Arabia's aims to achieve net zero emissions by 2060, available at: <https://www.saudigreeninitiative.org/pr/SGI_Forum_Press_Release-EN.pdf>, page 1.
  13. Saudi Updated First Nationally Determined Contribution, page 4.
  14. Saudi Updated First Nationally Determined Contribution, page 5.
  15. Ibid.
  16. Ibid, pages 6-8.
  17. Ibid, page 3.
  18. Press Release, page 2.

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