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How Chinese enterprises are acting on climate by meeting China's dual carbon goals

Smoke rises from chimneys near solar panels, during a Huawei-organised media tour, in Shaanxi province, China April 24, 2023. REUTERS/Tingshu Wang

China aims to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. Image: Reuters/Tingshu Wang

Liming Chen
Chair of Greater China; Member of the Executive Committee, World Economic Forum
Chunquan Zhu
Head, China Nature Initiatives, World Economic Forum Beijing
Carol Zhou
Head of Platforms and Impact, World Economic Forum
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Davos Agenda

This article is part of: Annual Meeting of the New Champions

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  • The Chinese government has set ambitious targets of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060.
  • To meet these goals, China needs to build a new energy system and accelerate the green and low-carbon transformation across all industries.
  • Here we outline how Chinese enterprises such as Ant Group are taking practical steps to meet carbon peak and neutrality goals.

In September 2020, China announced its goal of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060, highlighting its determination and ambition to undergo a green transformation.

These dual carbon goals require China to reduce its carbon dioxide emissions per unit of GDP by more than 65% compared to 2005 by 2030, and increase the proportion of non-fossil energy consumption to over 80% by 2060.

To achieve this, China needs to build a new energy system based on non-fossil energy sources such as wind and solar. At the same time, China needs to accelerate the paradigm shift to achieve a green and low-carbon transformation across all industries.

China’s macro policies provide a strong foundation for achieving comprehensive net-zero, nature-positive transformation. It has established a policy system called “1+N” for carbon peak and carbon neutrality goals. The “1” refers to top-level design, while “N” represents specific implementation plans for key areas and sectors, coupled with supporting measures.

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Furthermore, in December 2022, the Kunming-Montreal Global Biodiversity Framework was officially adopted under the witness of China’s Ministry of Ecology and Environment and the Executive Secretary of the Convention on Biological Diversity.

The most significant milestone in this framework is the 30 x 30 commitment – restoring 30% of degraded ecosystems of all types by 2030 and protecting at least 30% of the world’s land, inland waters and oceans by 2030. These two ambitious commitments call for joint action from both the public and private sectors to restore and protect nature.

In this favourable environment, Chinese enterprises can play a leading role in global nature and climate governance by leveraging their expertise, industry insights and the mobilization of broad social resources.

During the 14th Annual Meeting of the New Champions (AMNC23), government agencies and several companies, including China Mengniu Dairy Group, Ant Group, Contemporary Amperex Technology Co. Ltd. (CATL), Envision Group, and Tianjin Economic-Technological Development Area, shared their practical actions.

Driving a paradigm shift towards energy conservation and carbon reduction

Ensuring a low-carbon transformation in the industrial and energy sectors is a key prerequisite for achieving the dual carbon goals. To facilitate this transformation, China must adopt a more systematic approach, accelerate industrial decarbonization and reshape the energy landscape.

This can be achieved by enhancing energy efficiency, promoting waste recycling and embracing solutions like direct electrification to reduce reliance on fossil fuels in the production process. Simultaneously, efforts to advance the utilization of hydrogen fuel, boosting the development of clean energy, and make breakthroughs in the carbon capture, utilization and storage technologies are vital.

The transformation of industrial clusters, as major energy consumers and carbon emitters, is critical to achieving carbon neutrality. Enterprises within these clusters, concentrated in same geographic areas, allowing for shared infrastructure, resource acquisition and cost reduction.

They can also leverage advantages in policy support and innovative financing tools. Currently, 17 industrial clusters worldwide have signed the World Economic Forum’s Transitioning Industrial Clusters towards Net Zero initiative, including two Chinese members: the Sanjiang New Area Industrial Park, represented by a group of top enterprises led by CATL, and the Envision Ordos Net Zero Industrial Park, represented by the Envision Group.

During AMNC23, more industrial clusters, including the Tianjin Economic-Technological Development Area, joined the initiative, taking solid steps towards the dual carbon goals.

Enterprises committing to driving low-carbon development in supply chains

Reducing the environmental impact of industrial chains and their supply chains is an important measure to reduce carbon footprints and the first step in curbing biodiversity loss.

In the agriculture and food industry, companies have recognized the deforestation issue and its negative climate impacts associated with agricultural production. During COP27, 14 world’s leading agri-commodity companies, including COFCO International, jointly released an industry roadmap committed to curbing deforestation in agricultural production and supporting the goals of the Paris Agreement to limit global warming to 1.5°C.

In May 2023, China Mengniu Dairy Company Limited became the first to develop and implement a forest protection policy, reducing the risk of deforestation in its operations. Mengniu has committed to managing its factories and ranches, monitoring and managing commodities such as timber, palm oil and soybean meal that carry deforestation risks.

Their goal is to achieve zero deforestation by 2030. Through deep collaboration with the Tropical Forest Alliance of the World Economic Forum, Mengniu aims to encourage more suppliers and industry brands to make joint commitments, leading more enterprises to join the action and create a deforestation-free supply chain.

Enhancing natural carbon sink capacity through environmental restoration

Restoring forest ecosystems is a crucial pathway to tackle climate change and achieve carbon neutrality. As one of the most important and relatively cost-effective solutions in nature, forests not only store water, wealth and food, but also carbon, thereby playing a significant role in climate change mitigation and achieving carbon neutrality.

During AMNC23, more than 10 Chinese enterprises, including Ant Group and China Mengniu Dairy Company Limited, committed to pledge in the China Action. Ant Group alone plans to carry out 260,000 hectares of afforestation, conservation, and tending ecological restoration projects in ecologically vulnerable areas, equivalent to planting, conserving and restoring 340 million trees, to support China’s goal of growing, conserving and restoring 70 billion trees by 2030.

Companies can promote forest landscapes restoration through measures such as assisted natural regeneration, reforestation, agroforestry, mangrove conservation and restoration, watershed ecosystem management and erosion control.

Moreover, by fostering breeding and sustainable forest management, companies can provide support for sustainable forest products in terms of market expansion, youth participation and financial innovation, alongside empowering the restoration, sustainable management and utilization of forest ecosystem.

Green development and transformation are imperative

In the transition towards net zero, nature-positive development means companies could seize promising economic opportunities. For example, guided by the dual carbon goals, China’s new energy vehicle market experienced explosive growth in 2022, with production and sales reaching 7.058 million and 6.887 million vehicles, respectively, representing year-on-year growth rates of 96.9% and 93.4%.

In the pursuit of the dual carbon goals and nature-positive transformation, Ant Forest serves as an exemplary model by integrating ecological restoration with its business operations. Over its six years of operation, Ant Forest has demonstrated the positive impact of its low-carbon lifestyle concept to more than 650 million users.

More importantly, through the creation of the Green Energy Initiative, Ant Group collaborates with philanthropic organizations, professional institutions, and over 600 brands, utilizing Ant Forest’s Green Energy Initiative as an incentive to encourage the public to choose green and low-carbon products and services. This collaboration drives the transformation of related industries such as tourism, transportation, clothes and electronics and enables greater synergy in actions.

It is high time for businesses to engage in green and low-carbon actions. The theme of AMNC23 emphasizes that we are in the midst of systematic transformation: various technological and governance paths to achieve the dual carbon goals are flourishing, more investors and consumers are inclined to choose environmentally-friendly products and services, and tools to assist companies in taking more effective action are emerging.

This transformation will not only help companies adapt to future challenges and demands but also create economic and ecological added value. By avoiding negative impacts, promoting energy conservation and carbon reduction, participating in ecological restoration and achieving business transformation, companies will provide significant impetus for driving the dual carbon goals and nature-positive transformation, jointly building a community of shared future for mankind with a harmonious coexistence between humans and nature.

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