TRANSPORT
In 2023, global electric vehicle sales exceeded 13 million. China has the largest domestic electric vehicle market with more than seven million units sold, representing a third of car sales.
In addition, China exported 1.2 million electric vehicles in 2023. This was 80 per cent more than the previous year.
Electric vehicles are already cheaper than cars with internal combustion engines in China, because they have such a high market share. Local carmakers already offer nearly 50 different small, affordable electric models.
STEEL
In April, China announced it was preparing to extend emissions trading to the steel industry. This sector is the country’s second largest CO2 emitter, behind power.
Emissions trading is a market-based approach to controlling pollution. The government allocates permits that allow release of a certain amount of CO2 over a set period of time. These permits can be bought and sold, or traded.
China accounts for more than half of the world’s steel production. But the industry also supports the energy transition, because steel is used in renewables and electric vehicles manufacturing. Nearly 70 per cent of the world’s key components of wind turbines and 80 per cent of solar panel components are made in China.
The government is encouraging industry to work with universities and research institutes to reduce emissions. It will not be easy, and it will be costly.
China is the world’s largest hydrogen producer, but 80 per cent comes from fossil fuels. Investment in green hydrogen research and development is increasing, with some firms determined to take the lead. If steel-making could be powered by green hydrogen, it would be a major breakthrough.