Climate Cooperation China
On behalf of the International Climate Initiative (IKI)

Online Meeting on Climate Protection in Industry in China

The industrial sector is experiencing particularly large challenges in view of the economic impacts of the COVID-19 pandemic. At the same time, it is one of the most important actors involved in achieving the climate goals. In order to support industry dialogue and exchange of practices for climate protection in China, German Industry & Commerce Greater China Beijing (AHK Beijing) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) jointly organized an online meeting on climate goals and measures of German industrial companies on 13 November 2020 that was attended by 23 representatives from German companies operating in China, GIZ China and AHK Beijing. Four representatives from German companies operating in China presented their climate protection goals and measures and contributed to a fruitful discussion and dialogue.

The event was opened with welcoming remarks from Bernhard Felizeter, Department Head of Building, Energy & Environment at AHK Beijing, and Dr. Alexander Fisher, Director Sino-German Cooperation on Biodiversity, Climate and Environment (BCE) at GIZ China, who continued by briefly introducing GIZ’s work in China and their cooperation in climate policy in particular. Steffen Menzel, Team Lead Climate Policy and Project Director NDC Implementation Sino-German Cooperation on Climate Change (SGCCC) at GIZ China, then presented the bilateral Sino-German Cooperation on Climate Change. He began by illustrating the dramatic shift needed in emissions reductions after 2030 in order to achieve the ambitious target of carbon neutrality by 2060. Climate policy cooperation can support China in promoting economic development in compliance with long-term decarbonization goals. Being embedded in the Chinese political planning system, GIZ is cooperating in achieving and implementing the mitigation and adaptation goals as well as the policies and measures set out by the NDC.

As the first industry representative, Fu Xiaodong, Director Decarbonization Energy System, Power Generation at Siemens Energy, introduced the company’s actions and technologies to reduce carbon emissions along the entire energy value chain. Siemens Energy identified three fields of action needed in the energy sector, that is efficiency increase, fuel shift/hybridization, and deep decarbonization. In addition to the company’s industrial-scale High-Temperature Heat Pump, H2-cofiring Gas Turbine, SeaFloat Power Plant, and skills in Energy System Design, Mr. Fu highlighted NGP – a Next-generation Geothermal Power system based on supercritical CO2 that combines geothermal energy with CCS (carbon capture and storage).

A similarly broad portfolio of products and technologies serving climate mitigation and adaptation in production and along the value chain was presented by Wu Wensheng, Senior Manager Environmental Protection & Projects at BASF. BASF’s self-set climate protection target stipulates a carbon-neutral growth with 0.4 tons CO2 per ton of sales product until 2030 and is meticulously monitored by a carbon footprint report since 2008. The carbon management at BASF comprises the reduction of CO2 emissions from their production by improving energy and process efficiency, an increase of the share of renewable energies in the global power supply as well as the development of breakthrough technologies for low emission production in an R&D program.

Matthias Scheurich, General Manager at Otto Fuchs Technology (OFTS) Shenyang, continued by introducing the company’s energy and climate protection strategy as a producer of lightweight automotive parts.  He described that although primary production of aluminum is very energy-intense, compensation is possible by fuel/power consumption reduction of cars by weight reduction, full recyclability of aluminum, and avoidance of coating, which at the same time lowers the transportation energy consumption. With an advanced energy management system, OFTS Shenyang can collect process waste heat over the furnaces during the non-heating period in a heat ground storage system to heat the 17.000 m2 factory without significant external heating energy. The company’s general climate protection goal is to reduce energy usage by 30 to 40 percent per weight unit of a produced part by 2030.

Furthermore, Paul Lindblad, President of Wacker Chemicals Greater China, illustrated the company’s long-standing commitment to sustainability and energy. By producing silicon and polymer chemicals as well as selling polysilicon, Wacker Chemicals supplies essential materials for the PV industry as well as cement additives to reduce carbon emissions in the manufacturing sector. Instead of focusing on the efficiency per unit, Wacker wants to move to a genuine absolute CO2 reduction by looking at the total life cycle CO2 production. Mr. Lindblad explained that by 2030 Wacker wants to make their product mix carbon neutral, including the carbon benefits that their customers and the broader society eventually receive.

Following the presentations by German company representatives on their climate protection goals and measures in China, all participants were welcomed to ask questions and openly discuss current challenges and issues for the industry sector in China. With regard to a question to Wacker concerning the general interest for the company’s approach from the Chinese side as well as the benefits or narrative of the company, Mr. Lindblad emphasized that Wacker’s business customers are highly interested in the carbon content and footprint of their products to be able to export them to carbon sensitive regions like the EU. However, he stressed that the provincial and city governments in China were rather concerned about benefits in particulate matter (PM2.5) reduction than CO2 reduction. In their discussion, the companies agreed that a major problem was their external energy supply and the lack of choice between fossil and renewable energy sources. They further expressed their frustration with slow development and the discrepancy between China’s ambitious long-term goals and missing short-term actions. A question to BASF concerned the possible inclusion of BASF in the national emissions trading scheme (ETS). Ms. Wu elaborated that although the national ETS has not been rolled out yet, BASF is already engaged in provincial systems such as in Shanghai. However, in other areas where BASF is operating such as Jiangsu province, there is no official ETS so far and, hence, no quotas. In Shanghai, BASF has faced some issues since their joining of the ETS pilot system such as with an expansion in production capacity or in new sites as the free quota by the government was not adjusted accordingly. BASF is in general optimistic about future inclusion in the national ETS as their advanced technologies and products would have an advantage in the utilized product benchmarking of the ETS.

The presentations, dialogues, and discussions during the event demonstrated the companies’ innovative strength and will to decarbonize and sustainably develop. At the same time, existing problems and challenges were identified. Overall, the event provided useful insights and suitable starting points for further industrial dialogues.

Photo Credit: GIZ

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