Sinopec's vision under China's carbon peak & neutrality goals

From the Tsinghua PBCSF Economic Forum on Carbon Neutrality

This is the third newsletter from Pekingnology of a series of speeches made by guest speakers at the 2021 Tsinghua PBCSF Economic Forum on Carbon Neutrality held on September 16.

The forum was widely covered in Chinese media but not so much in English so your Pekingologist wishes to present a more domestic detailed, technical discussion from the forum on reaching China’s carbon goals - China aims to reach the carbon peak before 2030 and carbon neutrality before 2060.

This particular speech is made by Ma Yongsheng, who in April 2019 was appointed Director of the Board and President of Sinopec Group, Deputy Secretary of Party Leadership Group of Sinopec Group.​ Sinopec is the world's largest oil refining, gas, and petrochemical conglomerate.

The translation is based on a transcript in Chinese of the speeches shared by the forum’s organizer with over several dozen Chinese media journalists in a WeChat group, and full video documentation of the forum is available at Tsinghua PBCSF’s Twitter account with simultaneous translation in English. Therefore, technically the speech was already in the public arena, but in case you want to quote something here, a link or mentioning of Pekingnology is appreciated.

Please note this is a partial translation, to save both your and our time. The full transcript in Chinese will be pasted at the end of this newsletter for reference.

For more on the forum: the speech by a senior executive of CATL, the leading Chinese battery giant, and the speech by the head of China National Nuclear Power.

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Based on the energy forecasts made by major global consulting institutions and the research of some institutions of Sinopec, we predict that driven by the goal of carbon neutrality, the global oil demand will enter the plateau period around 2030, and the demand for natural gas will reach the plateau period around 2040, which are much earlier than forecasts from others.

China, as a big energy consumer, has further accelerated the process of energy transformation after the goal of reaching peak carbon and carbon neutrality was put forward. You may remember that in December 2016, the National Development and Reform Commission and the National Energy Administration issued the “Energy Production and Consumption Revolution Strategy (2016-2030),” which proposed that by 2030, the proportion of non-fossil energy in primary energy consumption in China would reach 20%. After less than five years, the goal of the proportion has been adjusted to 25%, which was also mentioned just now by (former) minister Li Yizhong. We predict that by 2040, non-fossil energy will account for about 42% of the total primary energy, increasing rapidly.

Under the constraint of carbon neutrality, China's oil and natural gas consumption will accelerate the pace of reaching peak carbon emissions. It is estimated that China's oil consumption will reach its peak around 2026, which is about four years ahead of the world’s schedule. At its peak, China’s oil consumption will reach about 800 million tons, then decline year by year. At the same time, the use of oil will turn to as raw material than primarily as a fuel.

Natural gas plays a prominent role as a bridge in energy transformation and will maintain steady growth in the next 20 years. You may notice that the consumption of natural gas has witnessed double-digit growth in the past several years. It is estimated that the annual consumption will be 620 billion cubic meters by 2040, reaching its peak and then declining gradually. By around 2050, natural gas will become the most important fossil energy in China.

China's energy demand will continue to grow. As I have mentioned before, the demand for oil and natural gas, especially natural gas demand, still has a long growth period. Even if the demand reaches its peak in the future and starts declining, China will still need to import a large amount of oil and gas for quite a long time. Just now, (former) minister Li Yizhong also said that over 73% of China’s oil and 42% or 43% of China’s natural gas were imported, at the end of last year.

In the future, it is still necessary to continuously boost exploration and development and constantly strengthen the supply capacity of oil and gas.

First, we shall greatly improve the technology and equipment for oil and gas exploration and development, reduce energy consumption and achieve emission reduction by saving energy and improving efficiency.

Second, we shall increase the recovery and utilization of associated gas, flare gas, and gas from scattered gas fields, and realize carbon reduction by reducing and ultimately avoiding the emission of methane and other greenhouse gas.

Third, we shall redefine the endowment of resources. We shall actively develop distributed wind power, photovoltaic, and geothermal resources by utilizing oil and natural gas blocks, land resources, and marine resources, and realize carbon control by reducing the use of high-carbon fossil fuels and high-carbon electricity. 

We also believe that in the process of promoting the competitive transfer of rights for oil and natural gas, more attention should be paid to raising requirements of environmental protection for (bidding) enterprises. At present, China encourages all kinds of enterprises to enter the oil and natural gas exploration and development industry, but we suggest adding environmental protection requirements to the entry threshold to ensure efficient and comprehensive utilization of resources and prevent destructive exploitation.

With regard to building green refining and chemical enterprises, in the process of promoting carbon neutrality, China's refining and chemical industry will face more stringent carbon constraints, and it is necessary to accelerate the cultivation of core competitiveness to make the industry green and low-carbon. We believe that we can make improvements in the following areas:

First, we shall accelerate the concentration of refining and chemical industry, promote the construction of large-scale, integrated, complex, and intensive production capacity, improve the intensive and efficient use of resources, strictly control new refining capacity, resolutely curb the blind development of projects with high consumption of energy and heavy pollution, strictly enforce the industry standards of energy consumption and emission, and resolutely slash outdated production capacity.

2. We shall intensify technology research and process optimization, improve the cascade utilization and recycling of energy resources, and build intelligent refineries with digital and intelligent means to realize intelligent management and control of the energy in materials and products, energy-saving, and efficiency improvement.

3. We shall accelerate the adjustment of energy consumption structure in the refining and chemical industry, promote electrification and the replacement of coal with gas, strengthen the supply of "green hydrogen", and promote emission reduction and carbon reduction.

4. We shall strengthen the construction of the recycling system of petrochemical products, and make joint efforts from the supply side as well as from the consumer side to increase the recycling of petrochemical products such as plastics, and reduce the waste and consumption of petrochemical products.

On building a green system of storage and use, large-scale oil and natural gas storage enterprises at home and abroad have generally established an effective, integrated management and control system of detection, quantification, data control, and repair for methane escape in the process of natural gas pipeline collection (pipeline transportation), and the loss of natural gas pipelines has been effectively controlled. With the further advancement of implementing China's goal of reaching carbon peak and carbon neutrality, the importance of green oil and natural gas storage has become increasingly prominent. 

In the future development, we should actively optimize the layout of oil and natural gas storage facilities, strengthen the construction of smart pipeline networks, improve the standards for the construction of storage facilities, promote the research of core storage technologies, and further reduce the escape of greenhouse gases such as methane in the process of oil and natural gas storage.

In May, Sinopec joined hands with PetroChina, China National Offshore Oil Corporation (CNOOC), National Pipeline Network, and other Chinese oil and gas enterprises to initiate the establishment of an alliance on methane emission control, which will control methane emission in the whole industrial chain including oil and gas production, storage, and transportation.

With regard to building green technology as support, since the reaching of the peak of petrochemical energy demand has been moved ahead of the schedule, the pressure of transformation and upgrading of the oil and gas industry is increasing. Advanced and applicable low-carbon, zero-carbon, and negative-carbon technologies should be vigorously developed and popularized, and green and low-carbon competitiveness should be established with green technologies.

First, we shall strengthen the research and development of energy-saving technologies, especially in areas of oil and natural gas, oilfield well and pads, efficient utilization of new energy, improvement of heating furnace efficiency, recovery of wasted flue gas heat, and freeze desalination of seawater using LNG cold energy.

Second, we shall study the technology of hydrogen energy production, use, storage, and marketing in the whole industrial chain, focus on solving the cost problem of renewable energy production of "green hydrogen", speed up the cultivation and market introduction of the hydrogen energy industry, and find a feasible business model as soon as possible.

Third, we shall strengthen the development of low-cost carbon dioxide capture technology, reduce the energy consumption and cost of the capture, and promote the chemical transformation and utilization of carbon dioxide. 

Before the meeting, Academician (of the Chinese Academy of Engineering) Jin Yong 金涌 and I also talked about this topic for a long time. It should be said that there is a lot of room for the chemical conversion of carbon dioxide, and there are many kinds of technologies being developed now. We shall promote the research and development of the technology for producing chemical products and high-end materials with carbon dioxide as raw material. 

Translated by Alexander Wang, copyedited by Zhixin Wan, and reviewed by Zichen Wang, founder of Pekingnology. Don’t hesitate to reply should you have any questions, suggestions, or criticism.

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For your reference, below is a transcript of Ma’s speech. Please note the English translation above is only partial.

   马永生：

    非常荣幸受邀请参加今天这个论坛。

    首先，我代表中国石化，向在座的各位长期以来对中石化各项事业的支持、关心和帮助表示感谢，刚才听了前面几位老师、领导的发言，感触很深。借这个机会也想向大家汇报一下，中石化在碳达峰、碳中和方面的一些思考，特别是向我们的老领导毅中部长。大家知道毅中部长是中石化的老领导，他非常关心我们企业的发展，特别是在”双碳”背景下，中石化如何走，刚才他在发言当中也多次点了我们企业，今天也是一个汇报。

    我没来得及准备多媒体，非常抱歉。

    应对气候变化，推动温室气体排放，是世界各国的共同责任。我们国家已经把”双碳”（目标）纳入生态文明建设的整体布局，正在抓紧编制2030年前碳达峰的行动方案。实现”双碳”目标已经成为全社会的重要共识，中石化作为央企、作为能源化工行业，理应担当。

    我想跟大家汇报一下，中石化关于“双碳”目标背景下能源转型这个题目，自己如何做的一些思考和认识，欢迎在座的各位专家提出宝贵的意见和建议，特别是对我们公司下一步的发展，大家有什么好的意见、建议，欢迎通过各种渠道、各种方式提出宝贵意见。

    我想汇报三个方面的内容：

    一、“双碳”目标下能源低碳转型将明显加快。

    这是我们对能源行业的基本认识。

    目前，全球已经有130多个国家和地区提出碳中和的目标，可以预见各国碳中和目标的提出和推荐落实将深度重构全球能源体系，深刻改变能源发展大势。我们也研究了一下，综合全球主要的咨询机构做出的能源预测，结合中石化一些研究机构的成果，预计在碳中和目标的驱动下，全球石油的需求将在2030年前后进入平台期，天然气大概在2040年前后进入平台期，均比之前各家的预测提前了不少。

    中国作为能源消费大国，在“双碳”目标提出以后，能源转型进程进一步加快。大家可能还记得2016年12月，国家发改委、国家能源局印发的《能源生产和消费革命战略（2016—2030）》，当时提出到2030年我国非化石能源在一次能源消费当中的占比达到20%。过了不到5年，已经调整到了25%，刚才毅中部长也说到了。我们预计到2040年，非化石能源需求占比，占一次性能源比重将达到42%左右，速度是非常快的。

    在碳中和约束下，我国石油、天然气消费将加快实现碳达峰的步伐，预计我国石油消费将在2026年左右达峰，这就比全球大概提前了4年。峰值预测大概在8亿吨左右，之后逐年下降。同时，石油消费将从目前的以燃料为主向原料转化。

    天然气在能源转型当中的桥梁作用凸显，未来20年将保持稳步的增长，大家可能注意到前两年都是两位数的增长。预计到2040年达到6200亿方每年的消费量，2040年左右达到峰值，然后逐步下降，到2050年前后天然气将成为我国第一大的化石能源。

    这是我们的预测，这是我给大家报告的第一个方面的思考。

    二、“双碳”目标下油气行业发展路径逐渐清晰。

    我们也注意到境内外的油气公司在这方面的研究，我们也做了一些研究，油气行业作为我国国民经济的支柱产业，在“双碳”目标新要求和能源转型大趋势的推动下，面临减排减碳、绿色发展的压力增大。加快打造绿色油气田、绿色炼化企业、绿色储用体系、绿色技术支撑，将成为油气行业迈向绿色低碳发展的重要路径。

    我先谈一下关于打造绿色油气田。

    在迈向社会主义现代化进程当中，我国能源需求还会持续增长。油气需求，特别是天然气需求还有较长的增长期，前面已经说过了。即使将来需求达峰以后进入下降通道，相当长时间内还仍需进口大量的油气，刚才毅中部长也讲了去年底石油的进口达到了百分之七十三点多，天然气42%，也有数据（是）43%。

    未来仍然需要持续加大勘探开发力度，不断提升油气的供给能力，这一点2018年4月21日习近平总书记有一个重要批示，就是在目前国内油气对外依存度高的情况下提出的。

    一是大力提升油气勘探开发的技术和装备水平，通过节能提效降低能耗、实现减排。

    二是加大伴生气火炬燃烧气、零散气田气的回收利用，通过减少并最终避免甲烷等温室气体排放实现降碳。

    三是重新定义资源的禀赋。通过利用油气区块、土地资源、海洋资源，积极开发分布式风电、光伏和地热资源，通过减少使用高碳化石燃料和高碳电力实现控碳。这是原来传统的油气区块要中和资源利用。

    我们也认为在推进油气矿权竞争性出让的过程当中，应更加重视加强对准入企业环保这方面的一些门槛。现在国家鼓励各种各样的经济体进入油气勘探开发行业，但是我们建议在准入门槛这块增加环保方面的指标，确保资源的高效综合利用，防止破坏性的开采。

    关于打造绿色炼化企业，在推进碳中和过程当中，我国炼化产业将面临更加严苛的碳约束，需要加快培育绿色低碳核心竞争力。我们认为有以下几个方面可以加强：

    1、加快提升炼化行业集中度，推进大型化、一体化、基地化、集约化产能建设，提高资源集约高效利用的水平，严控新增炼油产能，坚决遏制“两高”项目盲目发展，严格行业能耗和排放标准，坚决淘汰落后产能。

    2、加大技术攻关和流程优化力度，提高能源资源梯次利用和循环利用的水平，并以数字化、智能化手段，建设智能炼厂，实现物料产品能量的智慧化管控和节能增效。

    3、加速炼化产业用能结构调整，推动气代煤、电动化，加强“绿氢”的供应，推进减排降碳。

    4、加强石化产品循环利用体系构建，从供给端到消费端共同发力，加大塑料等石化产品的回收利用，减少石化产品的浪费和消耗。

    关于打造绿色储用体系，国内外大型油气储用企业针对天然气管收（管网运输）过程中甲烷逃逸，已普遍建立起了有效的检测、量化、数据管控以及修复等一体化的管控体系，天然气管道损耗得以有效控制，随着我国“双碳”目标深入推进，绿色油气储用的重要性愈加凸显。在未来的发展过程当中，应积极优化油气储用设施布局，加强智慧管网建设，完善储用设施建设的标准，推进储用核心技术攻关，进一步减少油气储用过程当中的甲烷等温室气体的逃逸。

    今年5月中国石化与中国石油、中国海油和国家管网公司等能源企业发起成立了“中国油气企业甲烷控排联盟”，将对包括油气生产、储运在内的全产业链实行甲烷排放的管控。

    关于打造绿色技术支撑，随着石化能源需求峰点的前移，油气行业转型升级压力加大，应大力开发推广先进适用的低碳、零碳、负碳技术，以绿色技术建立绿色低碳竞争力。

    1、加大节能技术研发，尤其是在油气、油田井场、新能源高效利用、加热炉提效、烟气余热回收、LNG冷能海水淡化等方面加大攻关的力度。

    2、研究氢能制、用、储、销全产业链的技术，重点解决好可再生能源制“绿氢”的成本问题，加快氢能产业培育和市场导入，尽快找到可行的商业模式。

    3、加强低成本二氧化碳捕集技术开发，降低捕集能耗和成本，推进二氧化碳化工转化利用。会前我跟金涌院士也聊了半天这方面的话题，应该讲，二氧化碳的化工转化空间很大，现在研发的各种各样的技术有很多。

    推进以二氧化碳为原料生产化工产品和高端材料的技术研发，这是我给大家汇报的第二个方面的一些思考。

    三、“双碳”目标下中国石化发展路径的选择。

    在“双碳”目标背景下，全球的石油公司纷纷制定《绿色低碳行动方案》，加快转型升级步伐，其中埃克森美孚、雪佛龙这些美国石油公司，致力于发展CCUS等负碳技术，同时剥离一些高碳、高排放的资产。壳牌、BP、道达尔等欧洲公司则致力于研发储备风电、光伏发电、生物燃料等可再生能源技术。欧洲这些公司也在剥离一些油气资产，加快从油气公司向综合性能源公司的转型。

    作为国有骨干的能源化工企业，中国石化一直致力于绿色低碳发展，努力争当可持续发展的排头兵，特别是党的十八大以来，深入学习贯彻习近平生态文明思想，大力实施能效提升计划，扎实开展碧水蓝天环保专项行动，深入推进绿色企业行动计划。我们连续10年获得了“中国低碳榜样”称号。面对“双碳”目标约束，中国石化将大力实施绿色洁净发展战略，积极推进化石能源洁净化、洁净能源规模化、生产过程低碳化，坚定不移向零碳排放努力，推进减污降碳协同增效，引领我国能源化工行业低碳转型进程。

    我们有以下五个方面的考虑：

    一是大力推进传统业务低碳转型的升级，全方位推动油气增储上产，特别是加快天然气跨越式发展，提升清洁能源供给能力。加快推进炼化业务集约化、绿色化发展，打造一批世界级炼化一体化基地，加快淘汰高耗、低效产能。我们计划到“十四五”末期，单产的平均规模达到1000万吨以上，加快“油转化”、“油转特”的步伐，大力发展高端化工产品核心材料，加大产品的循环利用，提高低碳化原料比例，减少产品全生命周期的碳足迹。

    二是不断增强绿色能源供给能力，把新能源业务摆在更加突出的位置，积极发展以氢能供给、清洁供热、清洁供电、生物燃料供应以及新能源业务与现有业务绿色发展相融合，新能源业务与新科技、新模式发展相融合为构架的“四供两融”业务。

    规划到“十四五”末累计建成1000座加氢站和油氢混合站，5000座充换电站，7000座分布式光伏发电站。新增中深层地热供暖面积5000万平方米，大家可能都知道中国石化是我们国家地热开发利用的龙头企业，目前地热供暖面积、利用地下热能供暖面积已经达到8000万平方米，是中国最大的地热洁净能源供应商。如此，新能源供给能力将达到1000万吨标煤，努力为我国经济社会发展提供更加安全、更加洁净、更加多元的能源保障。

    三是加快提升能源利用的效率，加强能源消费总量和强化“双控”管理，严格控制新建项目碳排放，加强项目过程管理，确保碳排放的水平达到行业领先。深入推进能效提升计划，积极应用先进成熟的节能降碳技术，在油田企业推广区域一体化的能效提升项目，炼化企业推广低温余热综合利用、蒸汽动力系统优化等成熟项目，打造一批标准示范项目，深化能效对标工作，对标历史最好水平、行业最优水平，挖掘装置优化潜力，提升装置的能效水平。

    四是深入推进碳减排和利用，发挥中国石化上中下游一体化的优势，积极发展CCUS业务。前期我们启动了目前国内最大的CCUS示范项目，胜利油田跟齐鲁石化万吨级的示范项目，把齐鲁石化炼化过程当中产生的二氧化碳，输送到胜利油田地下驱油，这个项目正在建设当中，为国家推进CCUS规模化发展提供应用的示范案例，最近国家能源局的有关领导正在现场考察，也欢迎大家有时间去参观指导。

    强化甲烷排放管理，持续实施甲烷减排行动，争取到2025年甲烷排放强度比2020年降低50%。深化与国家林草局的战略合作，最近我们跟国家林草局签订了战略合作协议，积极开发林草碳汇项目，拓宽碳中和的建设渠道，不断提升林草碳汇的能力。

    最后一点想法，持续提升碳资产的管理水平，探索建立碳交易集中管理机制，积极参与全国碳市场交易。我们从一开始就积极地在上海多个地区(参与)，现在则是更深度地参与，如开展CCER项目开发申报工作，探索开展绿色金融，围绕新能源基础设施建设、氢能技术应用、氢能与充电桩业务等领域开展投资布局和产业孵化，推动绿色低碳转型发展。

    各位领导、各位专家，女士们、先生们，实现碳达峰、碳中和是一项复杂长期的系统工程，需要全社会共同努力。我们将坚持以习近平新时代中国特色社会主义思想为指导，坚决贯彻国家战略部署，积极顺应和把握能源发展大势，与各界同人一道，加快推进油气产业转型升级和高质量发展，为实现碳达峰、碳中和目标，保障国家能源安全，促进经济社会持续健康发展，做出我们应有的贡献。

    谢谢大家！