Sinopec's vision under China's carbon peak & neutrality goals

From the Tsinghua PBCSF Economic Forum on Carbon Neutrality

This is the third newsletter from Pekingnology of a series of speeches made by guest speakers at the 2021 Tsinghua PBCSF Economic Forum on Carbon Neutrality held on September 16.

The forum was widely covered in Chinese media but not so much in English so your Pekingologist wishes to present a more domestic detailed, technical discussion from the forum on reaching China’s carbon goals - China aims to reach the carbon peak before 2030 and carbon neutrality before 2060.

This particular speech is made by Ma Yongsheng, who in April 2019 was appointed Director of the Board and President of Sinopec Group, Deputy Secretary of Party Leadership Group of Sinopec Group.​ Sinopec is the world's largest oil refining, gas, and petrochemical conglomerate.

The translation is based on a transcript in Chinese of the speeches shared by the forum’s organizer with over several dozen Chinese media journalists in a WeChat group, and full video documentation of the forum is available at Tsinghua PBCSF’s Twitter account with simultaneous translation in English. Therefore, technically the speech was already in the public arena, but in case you want to quote something here, a link or mentioning of Pekingnology is appreciated.

Please note this is a partial translation, to save both your and our time. The full transcript in Chinese will be pasted at the end of this newsletter for reference.

For more on the forum: the speech by a senior executive of CATL, the leading Chinese battery giant, and the speech by the head of China National Nuclear Power.


Based on the energy forecasts made by major global consulting institutions and the research of some institutions of Sinopec, we predict that driven by the goal of carbon neutrality, the global oil demand will enter the plateau period around 2030, and the demand for natural gas will reach the plateau period around 2040, which are much earlier than forecasts from others.

China, as a big energy consumer, has further accelerated the process of energy transformation after the goal of reaching peak carbon and carbon neutrality was put forward. You may remember that in December 2016, the National Development and Reform Commission and the National Energy Administration issued the “Energy Production and Consumption Revolution Strategy (2016-2030),” which proposed that by 2030, the proportion of non-fossil energy in primary energy consumption in China would reach 20%. After less than five years, the goal of the proportion has been adjusted to 25%, which was also mentioned just now by (former) minister Li Yizhong. We predict that by 2040, non-fossil energy will account for about 42% of the total primary energy, increasing rapidly.

Under the constraint of carbon neutrality, China's oil and natural gas consumption will accelerate the pace of reaching peak carbon emissions. It is estimated that China's oil consumption will reach its peak around 2026, which is about four years ahead of the world’s schedule. At its peak, China’s oil consumption will reach about 800 million tons, then decline year by year. At the same time, the use of oil will turn to as raw material than primarily as a fuel.

Natural gas plays a prominent role as a bridge in energy transformation and will maintain steady growth in the next 20 years. You may notice that the consumption of natural gas has witnessed double-digit growth in the past several years. It is estimated that the annual consumption will be 620 billion cubic meters by 2040, reaching its peak and then declining gradually. By around 2050, natural gas will become the most important fossil energy in China.

China's energy demand will continue to grow. As I have mentioned before, the demand for oil and natural gas, especially natural gas demand, still has a long growth period. Even if the demand reaches its peak in the future and starts declining, China will still need to import a large amount of oil and gas for quite a long time. Just now, (former) minister Li Yizhong also said that over 73% of China’s oil and 42% or 43% of China’s natural gas were imported, at the end of last year.

In the future, it is still necessary to continuously boost exploration and development and constantly strengthen the supply capacity of oil and gas.

First, we shall greatly improve the technology and equipment for oil and gas exploration and development, reduce energy consumption and achieve emission reduction by saving energy and improving efficiency.

Second, we shall increase the recovery and utilization of associated gas, flare gas, and gas from scattered gas fields, and realize carbon reduction by reducing and ultimately avoiding the emission of methane and other greenhouse gas.

Third, we shall redefine the endowment of resources. We shall actively develop distributed wind power, photovoltaic, and geothermal resources by utilizing oil and natural gas blocks, land resources, and marine resources, and realize carbon control by reducing the use of high-carbon fossil fuels and high-carbon electricity. 

We also believe that in the process of promoting the competitive transfer of rights for oil and natural gas, more attention should be paid to raising requirements of environmental protection for (bidding) enterprises. At present, China encourages all kinds of enterprises to enter the oil and natural gas exploration and development industry, but we suggest adding environmental protection requirements to the entry threshold to ensure efficient and comprehensive utilization of resources and prevent destructive exploitation.

With regard to building green refining and chemical enterprises, in the process of promoting carbon neutrality, China's refining and chemical industry will face more stringent carbon constraints, and it is necessary to accelerate the cultivation of core competitiveness to make the industry green and low-carbon. We believe that we can make improvements in the following areas:

First, we shall accelerate the concentration of refining and chemical industry, promote the construction of large-scale, integrated, complex, and intensive production capacity, improve the intensive and efficient use of resources, strictly control new refining capacity, resolutely curb the blind development of projects with high consumption of energy and heavy pollution, strictly enforce the industry standards of energy consumption and emission, and resolutely slash outdated production capacity.

2. We shall intensify technology research and process optimization, improve the cascade utilization and recycling of energy resources, and build intelligent refineries with digital and intelligent means to realize intelligent management and control of the energy in materials and products, energy-saving, and efficiency improvement.

3. We shall accelerate the adjustment of energy consumption structure in the refining and chemical industry, promote electrification and the replacement of coal with gas, strengthen the supply of "green hydrogen", and promote emission reduction and carbon reduction.

4. We shall strengthen the construction of the recycling system of petrochemical products, and make joint efforts from the supply side as well as from the consumer side to increase the recycling of petrochemical products such as plastics, and reduce the waste and consumption of petrochemical products.

On building a green system of storage and use, large-scale oil and natural gas storage enterprises at home and abroad have generally established an effective, integrated management and control system of detection, quantification, data control, and repair for methane escape in the process of natural gas pipeline collection (pipeline transportation), and the loss of natural gas pipelines has been effectively controlled. With the further advancement of implementing China's goal of reaching carbon peak and carbon neutrality, the importance of green oil and natural gas storage has become increasingly prominent

In the future development, we should actively optimize the layout of oil and natural gas storage facilities, strengthen the construction of smart pipeline networks, improve the standards for the construction of storage facilities, promote the research of core storage technologies, and further reduce the escape of greenhouse gases such as methane in the process of oil and natural gas storage.

In May, Sinopec joined hands with PetroChina, China National Offshore Oil Corporation (CNOOC), National Pipeline Network, and other Chinese oil and gas enterprises to initiate the establishment of an alliance on methane emission control, which will control methane emission in the whole industrial chain including oil and gas production, storage, and transportation.

With regard to building green technology as support, since the reaching of the peak of petrochemical energy demand has been moved ahead of the schedule, the pressure of transformation and upgrading of the oil and gas industry is increasing. Advanced and applicable low-carbon, zero-carbon, and negative-carbon technologies should be vigorously developed and popularized, and green and low-carbon competitiveness should be established with green technologies.

First, we shall strengthen the research and development of energy-saving technologies, especially in areas of oil and natural gas, oilfield well and pads, efficient utilization of new energy, improvement of heating furnace efficiency, recovery of wasted flue gas heat, and freeze desalination of seawater using LNG cold energy.

Second, we shall study the technology of hydrogen energy production, use, storage, and marketing in the whole industrial chain, focus on solving the cost problem of renewable energy production of "green hydrogen", speed up the cultivation and market introduction of the hydrogen energy industry, and find a feasible business model as soon as possible.

Third, we shall strengthen the development of low-cost carbon dioxide capture technology, reduce the energy consumption and cost of the capture, and promote the chemical transformation and utilization of carbon dioxide. 

Before the meeting, Academician (of the Chinese Academy of Engineering) Jin Yong 金涌 and I also talked about this topic for a long time. It should be said that there is a lot of room for the chemical conversion of carbon dioxide, and there are many kinds of technologies being developed now. We shall promote the research and development of the technology for producing chemical products and high-end materials with carbon dioxide as raw material. 

Translated by Alexander Wang, copyedited by Zhixin Wan, and reviewed by Zichen Wang, founder of Pekingnology. Don’t hesitate to reply should you have any questions, suggestions, or criticism.

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For your reference, below is a transcript of Ma’s speech. Please note the English translation above is only partial.

















































A guest post by
Journalist from "China state-affiliated media"
A guest post by
Journalism student at Tsinghua University. Ex intern at Bloomberg, China Central Television, and the UN. I write about China’s society, culture, and ordinary people in between.
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