As a strategy to promote green transition, Chinese cities are increasing their proportion of renewable energy consumption by diversifying and scaling small solar power, wind power, biomass, and geothermal power, and striving to supply eco-friendly energy by activating green electricity transactions between regions. In addition, policies to reduce pollution and carbon emissions and establish a green manufacturing system are being promoted with a focus on cities where industrial complexes are situated. The green transition in China’s transportation sector also takes on the character of an industrial policy that utilizes urban green transition to foster industries, such as fostering the new energy automobile industry centering on large cities where automobiles and public transportation are concentrated. In this respect, this study classified the green conversion policy of Chinese cities into policies in the energy, industry, and transportation sectors, and identified the policy implementation system and characteristics of each field. In addition, based on the characteristics of major policies and implementation cases in each field, policy implications and cooperation measures necessary for Korea to pursue a green transition in the future were identified, as well as matters to keep in mind.
Chapter 2 of this report deals with the background and strategies for promoting green transformation in Chinese cities. Since the 1980s, after the reform and opening up, China’s urbanization has progressed rapidly, with coastal cities being the center of industrialization, and these cities serving as hubs for international trade. However, the indiscriminate expansion of Chinese cities is evaluated as an unsustainable model, and the Chinese government is pursuing a green conversion policy of cities to reduce environmental pollution and to grow the economy centered on high value-added manufacturing and services. The green transition promotion strategy of Chinese cities aims to set low-carbon transition targets for each city and build an eco-friendly energy system. At the same time, it promotes green conversion of industrial complexes located in cities, and promotes investment and consumption in the private sector through policies that lead the supply of new energy vehicles in public institutions and public transportation. In this regard, China is expected to strategically induce the demand for technologies and products needed for green transformation throughout urban areas, convert them into new engines of economic growth, and maintain industrial competitiveness and global market leadership through green transformation of the manufacturing industry. In addition, it is expected to establish a renewable energy generation system centered on cities to pursue social stability through energy stability and household income increase, and to strongly promote green transformation of cities as a means to respond to international pressure on carbon reduction.
Chapter 3 looked at China’s green transformation of the city’s energy sector from the perspectives of expanding production of non-fossil energy, establishing a low-carbon energy supply system, and low-carbon and high-efficiency fossil energy production. In the 14th Five-Year Plan period (2021-2025), China’s key to “expanding production of non-fossil energy” is to expand wind and solar power and nuclear power projects in coastal areas. In the field of wind and solar power generation, it plans to encourage the use of production sites first, expand large-scale wind and solar power generation projects and clean energy production bases. In Chinese cities, the promotion of rooftop-distributed photovoltaic power generation, among renewable energy sources, is evaluated to be capable of intensive development, reduce power peak load, and induce residents to consume green energy. In addition, since wind and solar power are greatly affected by the climate, nuclear power generation projects with low carbon emissions and stable power supply will be operated in pilot cities and expanded to other regions according to the results. In particular, during the 14th Five-Year Plan period, the development of the latest technologies such as small modular reactors (SMR) and the comprehensive use of nuclear power are emphasized. In addition, in order to lay the groundwork for increasing the utilization of renewable energy, the Chinese government plans to promote the maintenance of the transportation power grid system, the strengthening of inter-regional power grid connectivity, building smart distribution networks for decentralized renewable energy power, as well as to encourage the construction of smart energy systems and small power grids. In particular, it aims to stabilize energy supply and expand new and renewable energy supply by promoting “small independent power grid + distributed energy source” projects in cities along with existing large renewable energy plants. Green conversion in China’s fossil energy sector is exiting coal mines or coal-fired power plants as before, but rather than rapidly removing fossil energy for stable power supply, it focuses on low carbonization and high efficiency of power generation.
Chapter 4 classifies and analyzes policies to reduce pollution and carbon emissions, increase energy use efficiency, improve resource use level, and achieve improvements in green manufacturing systems in the urban industrial sector. First of all, in order to reduce pollution and carbon emissions, China intends to control the total amount of emissions with the goal of reducing emission intensity (pollutants 10%, carbon 18%). Major policies include reducing pollutant emissions in production processes and innovating related technologies, reducing emissions according to product life cycles, low carbonization of low-cost CCUS and industrial energy sources, strengthening production capacity control and evaluation of high-emission industries, fostering specialized institutions related to emission calculation systems and emission management information systems, and tax and financial support. Increasing energy utilization efficiency in the industrial sector is a major means of reducing carbon emissions in China, as the sector accounts for about 65% of total energy consumption. Accordingly, China plans to reduce the energy consumption per value added of industrial enterprises (annual sales of 20 million yuan or more) by 13.5% by 2025 compared to 2020. It also aims to improve the energy efficiency of major energy-intensive industries such as steel, petrochemical, non-ferrous metals, and building materials. To this end, the 14th Five-Year Plan will focus on the development and application of energy consumption reduction technology,introductionofhigh-efficiencyenergy-saving general-purpose facilities throughout the industry, and energy saving measures at data centers and base stations. In particular, the Chinese government presents the power efficiency of new large and large data centers as a detailed goal in line with the digital transformation trend of the industry, and emphasizes policies to include energy savings in data centers in key projects. To improve the level of resource utilization, China plans to increase the level of comprehensive use of manufacturing resources over the next five years by enhancing the comprehensive utilization rate of industrial solid waste and expanding recycling and re-manufacturing of major renewable resources. It plans to increase the recovery rate of waste non-ferrous metals and establish a management system for waste-powered batteries as a way to secure strategic metal resources such as copper, aluminum, cobalt, and lithium. In addition, the Chinese government plans to expand the use of large-scale industrial solid waste in areas such as building material production, infrastructure construction, and charging underground mining areas, and build 40 pilot bases for comprehensive use of large-scale industrial solid waste. Finally, China wants to further develop its green manufacturing system. As a policy goal, the government plans to distribute 10,000 green products and build and develop green low-carbon factories, supply chains, and industrial terminals to promote green transformation of SMEs to raise the level of clean production.
In particular, it plans to focus on establishing a green standard system and a green manufacturing public service platform, strengthening the role of leading companies in driving small and medium-sized enterprises, and strengthening green manufacturing-related market functions. China continues to expand financial support for pilot projects (products, factories, industrial complexes, supply chain management companies) selected on the green manufacturing list, and is pushing for internationalization of standards and certification of green factories, supply chains, and products. During the 14th Five-Year Plan period, the central government’s green manufacturing system improvement and development policy is focusing on strengthening public platform functions that will promote organic linkage and green transformation among green manufacturing pilot units. Accordingly, each region in China is also emphasizing qualitative improvement, such as strengthening and improving evaluation and standards systems, and seeking to expand the role of public service platforms. It is also worth noting that some regions are simultaneously presenting specific goals of green manufacturing pilot units by key field/industry, reflecting the industrial structure of the region and the characteristics of low carbonization by industry.
Chapter 5 analyzes China’s policies to reduce emissions, expand the supply of new energy vehicles, and strengthen green transportationtechnologies,whicharefocusedinthe transportation sector, through central and local policies and pilot cities.Toreduceemissions,Chinaispushingaheadwith regulations on internal combustion locomotives at the level of advanced countries by raising its emission standards beyond European standards and requiring related government agencies to transmit exhaust information during actual internal combustion locomotives in real-time. It is also promoting a ‘dual credit’ policy as a means of controlling the supply of internal combustion locomotives in China. The dual credit policy is operated by ‘CAFC credit’ obtained by automobile manufacturers meeting the fuel consumption standards of internal combustion locomotives, and NEV credit obtained by supplying a certain percentage of new energy vehicles according to the number of internal combustion locomotives produced. This dual credit system has a strong administrative regulation, such as banning automakers from producing internal combustion locomotives when they fail to meet the NEV credit level designated by the Chinese government for a year. In this regard, the dual credit policy acts as a management burden for existing internal combustion locomotive companies, but acts as an opportunity for new companies that produce only new energy vehicles as a means of fostering the new energy automobile industry in China. Above all, large Chinese cities are promoting the purchase of new energy vehicles through various support policies such as subsidies along with restrictions on the use of internal combustion locomotives. As such, policies are being comprehensively promoted through consideration of how to reduce internal combustion locomotives as well as fostering new energy vehicles. In order to expand the supply of new energy transportation vehicles, China focused on mandatory conversion of electric vehicles in the public sector, subsidies for new energy vehicles, and charging infrastructure. The Chinese government has gradually reduced the size of purchase subsidies by increasing the standard for electric mileage of new energy cars and suspending payments to companies with annual sales of less than 10,000 units, but is extending current subsidy policies to boost sluggish consumption due to COVID-19. In particular, major cities such as Tianjin, Suzhou, and Shenzhen were selected as pilot cities for the supply of new energy vehicles, and are in the top ranks in terms of the number of new energy vehicles owned. In the future, many pilot policies necessary for green conversion in the transportation sector are expected to be implemented. The development of green transportation technology is mainly focused on accelerating the expansion of new energy and clean energy transportation equipment, energy saving, accelerating the use of key environmental technologies, and completing the green transportation standard system. In particular, various integrated transportation services are being promoted in large cities such as Beijing and Shenzhen, and Guangdong Province is also promoting pilot operations in the area of power market construction using V2G technology and development of hydrogen battery automobile technology.
Finally, Chapter 6 summarizes the policy implications, areas of Korea-China cooperation, and risk factors that the green transformation promotion plan of Chinese cities can present to Korea based on the issues discussed in Chapters 3 to 5. In the energy sector, Korea also needs to lay an institutional foundation for the use of new nuclear technologies such as small reactors as well as renewable energy. In addition, it is necessary to seek CCUS cooperation measures in the field of Korea-China thermal power generation and to cooperate in the field of maintaining and operating mutual dialogue channels on nuclear safety. As a risk factor, it is necessary to prepare for the risk of importing solar power-related materials to China that may occur while focusing on decentralized solar power generation using rooftops in Chinese cities. In addition, Korea also needs to strengthen cooperation and government financial support analyzed as the main characteristics of China’s green transformation policy in the industrial sector, foster green transformation-related service industries for SMEs, and strengthen support to improve energy utilization. In addition, it is necessary to expand cooperation in standards/certification related to green manufacturing, cooperation with China’s industrial green transition-focused areas, and cooperation in emission reduction technologies such as steel/cement. On the other hand, from the standpoint of Korea, where the manufacturing supply chain with China is closely connected, it is necessary to prepare for the risks of enhancing China’s green manufacturing capacity. Finally, in the transportation sector, Korea also needs to gradually promote roadmaps and related policies to reduce internal combustion locomotives, and suggested seeking cooperation in Tianjin, Suzhou, Shionjeon, and Guangdong in green transportation technologies such as hydrogen and V2G. Suggested measures also include response to changes in the business environment due to stricter regulations on internal combustion engines in China, the importance of securing technology gaps to strengthen the competitiveness of Chinese electric vehicles, and the supply risk of major materials (lithium, elements, etc.) due to green conversion efforts in China.