China’s state-owned enterprises (SOEs) must cut their energy consumption and reduce carbon emissions to support the country’s carbon-neutral goals , Beijing has said. The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) has set a development pattern for the country’s centrally-owned enterprises to achieve carbon peaking and net-zero emissions in a timely fashion. “SOEs hold an important position in national security and the economy, while they are also key units of carbon emissions. They should play demonstrative and leading roles in promoting carbon peaking and carbon-neutrality,” the regulator said last week. The SASAC currently oversees 97 SOEs that carry out commercial activity on behalf of the Chinese government, down from more than 150 in 2008 due to mergers and reorganisation. The 97 companies include many in the country’s power-hungry and heavy-asset sectors, such as steel, aviation, telecommunications, electricity generation, mining and construction, and some in renewable energy, such as nuclear power . In a statement released on Thursday, the regulator said that by 2025 , SOEs must cut their energy consumption per 10,000 yuan (US$1,571.8) of output value by 15 per cent below their 2020 levels. Carbon dioxide emissions per 10,000 yuan of output value should also be reduced by 18 per cent. How data centre, 5G network operators in China can help save the planet The SASAC also ordered the installed proportion of renewable energy power generation at SOEs to be raised to more than 50 per cent, and that revenue from these firms’ strategic investments in emerging industries should account for no lower than 30 per cent of their total revenue by 2025. By 2030, the year by which China wants the entire country to peak its carbon emissions, SOEs should make significant progress in low-carbon transformation, with carbon emissions per 10,000 yuan of output value reducing by more than 65 per cent compared to 2005 levels, the regulator said. And by 2060, the planned deadline for China to achieve carbon-neutrality, China should fully establish an industrial system for low-carbon circular development and an efficient energy system for SOEs to promote this goal. Global warming threatens China’s food security, study warns Globally, the SOEs are among the world’s leading emitters, emitting over 6.2 gigatonnes of carbon dioxide equivalent per year in energy sector greenhouse gas emissions, which is more than every country except China, according to a report by Columbia University’s Center on Global Energy Policy. China, the world’s biggest greenhouse gas emitter and energy consumer, has relied heavily on coal to generate nearly 60 per cent of its electricity. SOEs generate more than half of China’s energy sector emissions. Among China’s – and the world’s – biggest polluters is China Baowu, the world’s top steelmaker. It put more carbon dioxide into the atmosphere in 2020 than Pakistan, according to the Centre for Research on Energy and Clean Air (CREA), a Finland-based environmental research group. China Petroleum & Chemical, a subsidiary of state-owned oil giant Sinopec Group, contributed more to global warming in 2020 than Canada, according to CREA. Since Chinese president Xi Jinping in September 2020 announced China’s dual carbon reduction goals, Chinese government agencies and SOEs have announced their own plans to peak emissions and use low-carbon energy. The State Grid Corporation of China released its action plan in March on peaking carbon dioxide emissions and achieving carbon-neutrality, becoming the first SOE to make such an announcement. Huaneng Group, Huadian, China Energy Investment, State Power Investment and Datang, China’s biggest utilities as well as some of the world’s largest polluters, have also pledged to reach peak emissions by 2025. Government agencies have also been issuing policies to regulate emissions and energy consumption of energy-intensive sectors. On Wednesday, China called for the country’s carbon-intensive raw material sector, including steel, cement and non-ferrous metals, to reduce their energy consumption and carbon emissions in its latest five-year plan. China ETS reduces carbon but ‘needs map to cap-and-trade based system’ In November, China’s top economic planner also ordered five energy-intensive industries to meet minimum efficiency standards it set. These standards take effect at the beginning of 2022. The pressure on SOEs to support China’s carbon-neutral goals is strong, but they also have the advantage of doing it better than private enterprises, said Lin Boqiang, dean of Xiamen University’s China Institute for Studies in Energy Policy. “SOEs tend not to have the urgent pressure of profitability when compared to private firms, and their state-owned nature means longer-term visions when it comes to making strategic decisions under government policies,” he said. This, however, will vary from sector to sector. “SOEs in high energy-consuming sectors, such as power generation, will have more challenges to overcome, due to their existing energy structure and little profit margin,” Lin said. “However they are also the sector in most desperate need of a low-carbon transformation.”