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Coronavirus Drives China’s CO2 Emissions Down 25%

A huge economic slowdown driven by the coronavirus has reduced China’s carbon dioxide emissions by about 100 million tonnes, or 25%, and the country’ energy demand and industrial demand may not yet have hit bottom, according to a new analysis released this week.

The report by Carbon Brief looked at a two-week period beginning 10 days after the start of the annual Chinese New Year festival and compared annual greenhouse gas emissions over a five-year span, Bloomberg reports. “Over that period in 2019, China emitted 400 million tonnes of carbon dioxide; this year’s figure is likely closer to 300 million tonnes.”

“All told, the measures to contain coronavirus have resulted in reductions of 15% to 40% in output across key industrial sectors,” states Centre for Research on Energy and Clean Air analyst Lauri Myllyvirta, with coal-fired power generation at a four-year low, steel mills and some oil refineries operating at five-year lows, nitrogen oxide pollution down 36% across the country, and domestic flights down 70% compared to last month.

“Initial analysis from the International Energy Agency (IEA) and Organization of the Petroleum Exporting Countries (OPEC) suggests the repercussions of the outbreak could shave up to half a percent off global oil demand in January to September this year,” Myllyvirta adds. But while “the short-term impact of the current crisis is large, in terms of reduced energy demand and industrial emissions, the longer-term direct effect of factory closures could be much more limited,” since a 25% emission reduction over two weeks would only equate to 1% for the entire year.

“Any sustained impact on fossil fuel use would come from reduced demand, which initial indicators suggest could have a major impact,” he says, citing a 30% drop in car sales this month as an example. “If consumer demand is reduced—for example, due to unpaid wages during the crisis cascading through the rest of the economy—then industrial output and fossil fuel use might not recover, even though capacity is available to do so.”

But while “some analysts have pointed to images of empty cities and cell phone factories as evidence for such an effect,” Myllyvirta explains that “China’s energy consumption is heavily dominated by energy-intensive industries and freight, with residential and commercial electricity consumption, private cars, and so on playing a relatively minor role.”

Which means the “single most important question on the demand side is the effect of the coronavirus outbreak on construction activity. The sector relies on migrant workers who might still be affected by restrictions on movement, enforced home quarantine, and other measures for days or weeks, so resumption of operations is not straightforward.”

And in the end, “the key factor determining the size of this impact is how fast things return to normal.”

A separate research note by London, UK-based financial services company Standard Chartered predicts the coronavirus will bring the global increase in oil demand down to 440,000 barrels per day, its lowest since 2009. But the agency sees demand growth rebounding to 2.34 million barrels per day next year.