The world is undergoing a profound and rapid energy transition towards an efficient, clean, low-carbon, and diversified energy mix. Especially at a time of sluggish global economic growth and an intensifying backlash against globalization, energy companies should work together to overcome difficulties, explore new opportunities and seek sustainable development. As a major player in the oil and gas industry and China’s largest oil and gas producer and supplier, CNPC has been actively cooperating with governments and companies in the industry chain to provide clean, low-carbon, safe and efficient energy while meeting future energy demand, in an effort to jointly build a sustainable energy future.
Integrate green and low-carbon into the corporate strategy and develop the transition path
Under the guidance of the new vision, we have integrated “green and low-carbon” into our corporate development strategies. We continue to bolster natural gas supply and promote a “green” growth pattern focusing on oil and gas supplemented by alternative and renewable energies to create a low-carbon energy ecosystem. In addition, we continue to explore new low-carbon business models, vigorously develop new energies and new materials, and facilitate emission reduction and de-carbonization in traditional operations. We support the large-scale development of geothermal energy, beef up R&D and application efforts in biomass, make plans for laying out hydrogen business across its value chain and promote the development and use of clean energy according to circumstances. We will accelerate the construction of CCUS demonstration projects, and foster the growth of the green and low-carbon energy industry, aiming for achieving “near-zero” emissions by 2050 and contributing to China’s efforts to achieve carbon neutrality by 2060.
We attach great importance to the transition to a green and low-carbon development model and formulate the roadmap in alignment with the “3060” goal. We have initially established a three-step strategy, i.e. “clean alternative, strategic replacement and green transition”.
• The advantage of natural gas as a green and low-carbon energy is given full play as we vigorously boost gas output and aim to increase the share of natural gas in the our total production to an industry-leading level of approximately 55% by 2025.
• Highlight the essential role of natural gas in the future energy mix, utilize our mineral rights for abundant resources of wind, solar, and geothermal energy and push ahead with the transition to a leading company in broad energy services, i.e. oil, natural gas, geothermal energy, electricity and hydrogen, with integrated development of wind, PV, natural gas and electricity, industrialized application of hydrogen, and scaled development and utilization of geothermal resources.
• Promote the Green Action Plan and bolster efforts in implementing energy-saving, emission-reduction and clean alternative solutions to reduce carbon emissions; use forestry carbon sink and CCUS techniques to facilitate carbon removal; and provide our society with green and zero-carbon energy products.
Vigorously develop natural gas to enhance the supply capacity of clean energy
Taking natural gas as a strategic and value-added business with high growth potential, we keep strengthening natural gas exploration and development, developing unconventional natural gas such as tight gas, shale gas and coalbed methane, and importing overseas natural gas from multiple channels to build a diversified clean energy supply system. In 2020, we produced 160.35 billion cubic meters of natural gas, including 130.6 billion cubic meters domestically, a 9.9% year-on-year increase, and accounting for 70% of China’s total gas production. We imported more PNG and LNG while improving our production capacity. We supplied 184.66 billion cubic meters of natural gas, a 1.9% increase over the previous year, providing a strong support to the optimization of China’s energy mix and the construction of a beautiful China.
We actively promote the comprehensive utilization of natural gas in city gas, industrial fuels, gas power generation, chemicals feedstock and vehicle fuels. In 2020, we undertook “coal-to-gas” transformation for 420,000 households in Shijiazhuang, Xiong'an New District, Shandong and other places, benefiting nearly 2 million people. In winter, “coal to gas” users’ gas supply reached 400 million cubic meters, replacing 600,000 tons of coal.
Build a “low-carbon energy ecosystem” to create new strength for green development
We take the development of new energies and alternative energies as new drive for green and low-carbon transition. In 2020, we set up a leading group for new energies and new materials business development, strengthened new energies development strategies and plans, and continued to expand new energies business such as geothermal energy, solar energy, bio-fuels, and charging (battery exchange) stations, especially in the field of hydrogen energy with great progress. We established Shanghai Zhongyou Shenneng Hydrogen Energy Technology Limited, and prepared for the construction of the first oil-hydrogen station in Shanghai Lingang New Area. We entered into a cooperation agreement for the 70MPa hydrogen refueling station project to promote the construction of demonstration hydrogen refueling stations. We supported hydrogen energy supply for Beijing and the 2022 Winter Olympics, by constructing hydrogen refueling stations at the Capital Airport, along the Beijing-Zhangjiakou Expressway and at parking spots for the 2022 Winter Olympics hydrogen fuel vehicles, laying out high-speed hydrogen corridors, and accelerating the building of proprietary core technology system and standard system for key materials.
We optimize the energy consumption structure by upgrading energy products. The Company’s refineries supply National VI standard gasoline and diesel to meet the market demand for high-quality oil. The manufacturing capacity of downstream green chemical products and green management throughout the life cycle continue to improve, effectively supporting the country in achieving its air pollutant emission reduction targets.
Participate in OGCI activities to promote carbon emission reduction in industry
In response to the goal to hold global average temperature increase to “well below 2℃ above preindustrial levels” in the Paris Agreement adopted at the Paris Climate Conference, and to the “carbon peak” and “carbon neutrality” pledges of the Chinese government, we take the initiative in international climate governance to combat climate change.
As the only Chinese member in OGCI, CNPC is deeply involved in international cooperation to address climate change and works with other OGCI members in response to climate change and low-carbon transition in the oil and gas industry. We have prepared a CCUS (Carbon Capture, Utilization, and Storage) Development Plan for the 14th Five-Year Plan period. CNPC Assets Management Co., Ltd. and OGCI Climate Investments signed the Framework Agreement of Climate Investment China to set up the OGCI Climate Investment Kunlun in the form of a limited partnership, a branch of OGCI Climate Investments in China.
In 2020, Dai Houliang, chairman of CNPC, signed the Open Letter from the CEOs of OGCI, reiterating continued efforts and pledge to promote carbon emission reduction despite the COVID-19 pandemic and low oil prices. Together with other OGCI member companies, we jointly issued a plan to reduce the average carbon intensity of the upstream field, promising that by 2025, the carbon emission intensity of member companies will be reduced from 23 kg CO2 equivalent per barrel oil equivalent in 2017 to 20-21 kg CO2 equivalent per barrel oil equivalent, and that the average methane emission intensity will be below 0.25%, with the aim of hitting 0.2%.
We conducted benchmarking studies on CCUS commercialization policies at home and abroad and proposed a targeted plan for China’s CCUS commercialization. We also held a seminar titled “CCUS Commercialization White Paper: Goals and Actions for Oil and Gas Industry”. We issued the Action Plan for Methane Emission Control, and deployed and implemented “Seven Major Projects” to push our methane emission control to a world-class level.
As one of the leading companies of the OGCI transportation working group, we worked with member companies to select prior low-carbon fuel routes, invited global oil, hydrogen and road transportation sectors to the roundtable on emissions reduction in transportation, and hosted the online “Forum on Opportunities for Sustainable Transportation Development” to promote carbon emission in transportation.
We endeavor to reduce emissions by technological means. We have developed 18 key technologies and technical packages through low-carbon research, established 16 demonstration projects and 9 demonstration areas, and improved the low-carbon standard system. We have initiated major technical research projects such as “Key Technologies and Application of CO2 Capture, Flooding and Storage” and “Demonstration Project of Key Technologies for CO2 Capture, Flooding and Storage” to accelerate breakthroughs in core technologies. More than 1.9 million tons of carbon dioxide have been stored by the CO2-flooding demonstration project in Jilin Oilfield during its stable operation for 12 years. The Xinjiang CCUS Hub was included into the world’s first CCUS hubs under the OGCI CCUS Kickstarter, and has the potential of 10 MMt/year.
Enhance carbon trading performance and reduce carbon emissions
We actively participate in carbon trading activities to achieve carbon emissions reduction through market-based mechanisms. We are the co-founder of the Tianjin Climate Exchange (TCE), the first comprehensive emissions trading institution in China. The energy saving and emissions reduction projects developed by TCE can reduce energy consumption by more than 200,000 tons of standard coal annually, equivalent to over 500,000 tons of carbon dioxide in emission reduction. All CNPC’s subsidiary companies engaged in the China’s emissions trading system fulfilled their end of bargain in 2020. We implemented the Green Action Plan and the Methane Emission Control Action Plan, and set methane emission targets: to reduce methane emission intensity by 50% by 2025 from the 2019 level, and strive to reach world leading level in respect of methane emission control.
While supplying society with clean oil products, we endeavor to optimize the structure of energy consumed by ourselves, reduce carbon emissions and carbon footprint in production processes, minimize the use of fossil fuels, accelerate the shift towards clean alternatives and reduce energy consumption intensity. In Huabei Oilfield, Tarim Oilfield and other areas where conditions are ripe, renewable energies such as geothermal energy and solar energy are used to reduce carbon emissions during production. In 2020, the share of natural gas in our total energy consumption was up 2.14 percentage points from 2015, with the share of raw coal down 2.51 percentage points from 2015.
China is committed to reaching a peak in carbon dioxide emissions by 2030 and carbon neutrality by 2060. The energy transition will be greatly accelerated under the guidance of the new energy security strategy and the requirements of the “carbon peak” and “carbon neutrality” goals. As China’s largest oil and gas producer and supplier, we will pursue high quality development and implement our strategies of innovation, resources, markets, internationalization and green & low carbon, towards the target of building a world-class international energy company. While focusing on developing core business, we will figure prominently the structural adjustment, reform and innovation, quality and profitability, as well as corporate governance according to law. We will seize the opportunities for low-carbon transition, and accelerate the process of building up new advantages in green development to contribute to the UN Sustainable Development Goals 2030 and China’s carbon peak and carbon neutrality pledges.
China National Petroleum Corporation