World Energy Outlook 2007

generate almost 1.2 billion CERs by 2012. Of these projects, 107 had
already been registered, accounting for 391 million CERS in 2012.
China’s preferred categories of CDM projects are renewable energy, energy
efficiency and methane recovery projects. However, the largest share of
registered credits, 72%, comes from projects to reduce emissions of
hydrofluorocarbon HFC-23 (Figure 9.12). HFC-23 is a by-product of
HCFC-22, which is a potent greenhouse and ozone-depleting gas used
largely for refrigeration. China is well placed to provide these credits,
because it is a big producer of HCFC-22 and cutting HFC-23 emissions is
very cheap in China, at less than $1 per tonne of CO 2
equivalent, or less
than a tenth of the value of the CDM credits generated. Projects that reduce
N 2
O (another powerful greenhouse gas), hydropower and the collection of
methane from coal mines and coal beds make up about 11% each of total
expected 2012 credits, while energy efficiency in industry accounts for
almost 10%, wind power for 6% and landfill gas for 3% (UNEP, 2007).
New projects are being added to the pipeline all the time. Revenue from the
sale of CDM credits could contribute as much as 0.5% per year of Chinese
GDP in 2030, mainly thanks to technology transfer (OECD, 2007). China
will remain an attractive market for buyers of credits because of the
economies of scale available, the broad portfolio of eligible projects, growing
energy demand and the inefficiencies which exist in its industrial sector.
Indeed, its share of global credits would increase even further if new designs
of HCFC-22 plants that produce fewer emissions of HFC-23, new
supercritical or ultra-supercritical coal plants or carbon capture and storage
projects become eligible for emission credits. 22 However, geographical
concentration may become an issue; foreign buyers may wish to diversify
their portfolios.
9
Coal was by far the leading contributor to China’s CO 2
emissions in 2005 and
remains so in the Reference Scenario through to 2030 (Figure 9.13). Coal’s
share of emissions falls only slightly over the next two-and-a-half decades, from
82% to 78%. The share of natural gas increases from 2% in 2005 to 4% in
2030, while oil’s share also increases, from 16% to 18%.
22. HCFC-22 use for refrigeration (but, importantly, not as feedstock) is controlled by the Montreal
Protocol and is scheduled for complete phase-out by 2030. Equipping HCFC-22 plants with
HFC-23 destruction technology would greatly aid efforts to mitigate climate change, as the annual
emissions of such plants are typically of the order of several million tonnes of CO 2
.
Chapter 9 - Reference Scenario Demand Projections 315