Insight
China’s industrial landscape is a cornerstone of its global economic influence, characterised by immense turnovers and significant contributions to GDP. As the world’s largest manufacturer and exporter, China’s industrial sector drives employment and technological advancements. However, the sector faces substantial greenhouse gas emission challenges. This report explores the economic importance of China’s industries, their emissions impact, and the policies shaping the path toward climate targets.
Industry GHG Emissions
In 2018, China’s industrial processes and product use emitted a total of 1.89 billion tonnes CO2-equivalent. The mineral industry contributed over half of these emissions at 991 million tonnes, followed by the chemical industry with 457 million tonnes (24%). The metal industry accounted for 202 million tonnes (10%), and halocarbons and SF6 emissions added 234 million tonnes (12.4%).
In addition to these figures, emissions from energy-related stationary fuel combustion in manufacturing industries and construction totalled over 3.4 billion tonnes CO2-equivalent.
Economic Relevance of Industry
Chemicals & Refining
Annual net turnover (2022):
4.711.5 billion USD
Production capacities:
Ethylene: 29 million tonnes
Sulfuric acid: 95 million tonnes
Caustic soda: 39 million tonnes
Industry hotspots:
Xinjiang Uygur Autonomous Region, Shandong Province
Metals Including Iron and Steel
Annual net turnover (2022):
650 billion USD
Production capacity (2022):
1.34 billion tonnes of steel
Export quantity (2022):
67.3 million tonnes of steel
Main export markets:
Asia (71%), Africa (12%), South America (9%), Europe (7%), North America (<2%)
Industry hotspots:
Liaoning Province, Shandong Province
Cement & Lime
Annual net turnover (2022):
565.1 billion USD
Production capacities (2021):
Cement: 2.38 billion tonnes
Clinker: 1.59 billion tonnes
Export quantity (2022):
1.96 million tonnes
Industry hotspots:
Anhui Province, Fujian Province
Decarbonising China’s Industry – Fiscal Support
In 2022, China’s Ministry of Finance issued the Opinions on Financial Support for Achieving Peak Carbon Emissions and Carbon Neutrality, focusing on fiscal optimisation, tax incentives, market-based mechanisms, and international cooperation. Initiatives include establishing a national low-carbon transition fund, encouraging private capital for green projects, and optimising tariffs to promote environmental goals. These measures align with China’s ambitious dual carbon goals of peaking emissions by 2030 and achieving carbon neutrality by 2060.
Relevant Policies
China’s dual carbon goals are supported by ministry-level initiatives and include legal regulation, financial support, market systems, and technological innovation. Key policies shaping the industrial sector include:
- State Council’s Guiding Opinions on Establishing a Green, Low-Carbon Economic System (2021)
- Technology Implementation Plan for Carbon Peaking and Carbon Neutrality (2022-2030)
- Action Plan for Standardising Energy Carbon Peaking and Carbon Neutrality (2022)
Industry-specific policies include the Implementation Plan for Carbon Peaking across sectors such as industrial, building materials, and nonferrous metals.
Flagship Project
On June 2, 2023, the National Energy Group launched Asia’s largest carbon capture, utilisation, and storage (CCUS) project at the Taizhou Power Plant. This project, entirely designed and executed by China, captures and utilises 500,000 tonnes of carbon dioxide annually. It produces high-purity (>99%) dry-based carbon dioxide, setting a benchmark for industrial decarbonisation.
