Rystad CEO- China’s Clean-Tech Leadership Powers Global Energy Transition丨Multinationals on China
09:37
SFCCorrespondentZhengQingting,InternMuRongxuaninBeijing
InarecentinterviewwithSFC,JarandRystad,thefounderandCEOofOslo?basedRystadEnergy,brokedowntheongoingglobalenergytransitionintothreecriticalstages:decarbonizingtheelectricitygrid,electrifyingenergy-consumingsectors,andeliminatingresidualemissionsthroughe-fuels,biofuels,andcarboncapture.Heemphasizedthatdecarbonizingpowermustcomefirst—otherwiseelectrificationalonecouldincreaseemissions.DespiteU.S.policyhurdles,Rystadnotedthatthefirstphaseisproceedingwell,supportedbysustainedinvestmentsinrenewablesandbatterytechnology.
AddressingtheParisAgreement’s1.5°Cgoal,Rystaddescribedthe500-gigatonCO?capas“almosttooambitious.”Yet,heassertedthatwithaggressivedecarbonization—mimickinganet-zerotrajectoryby2060–2070—andrapidmethanereduction,warmingcouldbelimitedtoroughly1.6–1.7°C.Heurgedthatmethaneslashisessentialtoclosethegap,echoinghiscallforatwo-prongedemissionsmitigationstrategy.
RystadalsoweighedinonU.S.energypolicyshiftsundertheTrumpadministration,notingapivottowardaffordabilityandsecurityoversustainability.However,hehighlightedthatU.S.electricvehicleadoptiontrailsbehindChinaandtheUK,whichhavealreadysurpassed50%.HeforecastcontinuedgloballeadershipforOPECinstabilizingoilmarkets,evenasdemandplateaus.
HealsohighlightedChina’sleadingposition:itsthermalgenerationdropped4percentinQ12025,andithasalreadyexceededits2030renewabletargetsixyearsearly—reinforcingitsroleasbothamodelandkeysupplierofsolarandbatterytechnologiesessentialtotheglobalshift.
MultinationalsonChina:Howdoyouevaluatethecurrentglobalenergytransition’soverallprogress?
Rystad:First,theenergytransitioninvolvesaddressingthreekeytasks.Taskoneisdecarbonizingtheelectricitysystem.Tasktwoiselectrifyingeverythingthatcanbeelectrified.Taskthreeiseliminatingtheremainingemissionsthroughe-fuels,biofuels,andcarboncapture,utilization,andstorage(CCUS).Thesetaskscontributeapproximately40%,40%,and20%respectivelytoemissionsmitigation.
Historically,electricityhashadthehighestemissionsperkilowatt-hour.Therefore,ifyoubeginelectrifyingsectorswithoutfirstdecarbonizingelectricity,youriskincreasingglobalemissions.That'swhyfollowingthissequenceiscrucial.Inthiscontext,aslowdownintaskstwoandthreeisn'tamajorissue,providedthefirsttaskprogressesrapidly.DespitenewpoliciesfromtheU.S.aimedatslowingtheenergytransition,progressremainsrobust.
MultinationalsonChina:IstheParisAgreement’s1.5°Ctargetstillwithinreach?
Rystad:Honestly,limitingcarbondioxideemissionsto500gigatonsisanextremelyambitiousgoal.However,withrapidadvancementsinenergytransitiontechnologies,achievingnet-zeroby2060or2070mightbefeasible.Thisscenariocorrespondstoabout950gigatonsofemissions,leadingtoapproximately1.7°Cofglobalwarming.
Methaneemissionsalsoplayasignificantrole.Rapidreductionsinmethanecouldpotentiallyavoidanadditional0.1–0.2°Cofwarming.Combininga74%reductioninCO?by2060withswiftmethanemitigationeffortscouldbringusclosertothe1.5°Ctarget.However,thisoutcomereliesnotsolelyonCO?reductionsbutalsoonacceleratedmethaneabatementmeasures.
MultinationalsonChina:SincetheTrumpadministrationrestartedcoalandeasedoil&gasregulations,whatchangeshaveyouobservedinU.S.production,investmentflows,andmarketsentiment?
Rystad:TheU.S.narrativehasshiftedsignificantlyfromleadingenergytransitioneffortstofocusingonenergyaffordabilityandsecurity,oftensideliningsustainability.Nevertheless,theoverallimpactontheenergytransitionhasbeenlimited.Globally,nearly$1trillioncontinuestobeinvestedinsolar,wind,andbatterytechnologies.
Theenergytransitionwon'toccurbyhaltingoilandgasproductionbutbyreducingconsumptionthroughalternativetechnologieslikeelectricvehiclesandrenewablepower.WhiletheTrumpadministrationhasreducedincentivesforelectricvehicles,thecrucial$7,500taxcreditperfamilyremains,thoughitmayexpirebyyear'send.Negotiationsareongoing,consideringtheemploymentbenefitstiedtoEVmanufacturingintheU.S.
Historically,expectationsforU.S.EVadoptionhavebeenmodest.Incontrast,countrieslikeChinaandtheUKhavesurpassed50%inelectricvehicleadoptionandareprogressingrapidly.Therefore,despitecurrentheadwindsintheU.S.,I'mnotoverlypessimisticaboutthesetechnologiesortheiradoptionpace.
MultinationalsonChina:Howwouldfasternet-zerotransitionsaffectOPEC'sglobalinfluence?
Rystad:Oilwellsexperiencearapidnaturaldeclineofabout15%annually.Withoutnewdrillingorinterventions,productioncoulddropfrom103millionbarrelsperdaytobelow90millioninayear.Thus,maintainingcurrentoutputlevelsrequirescontinuousdrilling.
Evenwithflatordecliningglobaloildemand,supply-demanddynamicsremainrelevant.OPECcancontinuetoplayaconstructiveroleinstabilizingpricesbymanagingmarginalsupply,potentiallymaintainingitsinfluenceforthenexttwotothreedecades,eveninashrinkingmarket.
MultinationalsonChina:Chinahassetatargettopeakcarbonemissionsby2030andachievecarbonneutralityby2060.Howdoyouviewthiscommitment?
Rystad:Historically,Chinahasoftensurpasseditstargets.Forinstance,itaimedtoreach1,200gigawattsofrenewablecapacityby2030butachievedthissixyearsaheadofschedule.Inthefirstquarterof2025,thermalpowergenerationinChinadecreasedby4%,indicatingafaster-than-expecteddecarbonizationtrajectory.IbelieveChinawillcomfortablymeetits2030peakemissionstarget.
MultinationalsonChina:HowdoyouseeChina’sroleasamodelintheglobalenergytransition?
Rystad:Chinaplaysapivotalrolebysupplyingessentialtechnologieslikesolarpanelsandbatteries.Itholdsthelargestmarketshareandleadsincost-efficienttechnologies.Thus,Chinaisnotonlyadvancingitsownenergytransitionbutalsodrivingglobalprogressinthisarena.
MultinationalsonChina:UndertheBeltandRoadInitiative,whatkindofenergyprojectsshouldbeprioritized?
Rystad:TheBeltandRoadInitiativehasseensignificantinvestmentsincombinedsolarandbatteryprojects.Suchtechnologiescanenableregions,particularlyinAfrica,toleapfrogtraditionalenergyinfrastructures,similartohowmobiletelephonybypassedlandlines.Inareaslackinglocalgasresources,directlyadoptingsolarenergyandelectricvehiclescanbemorecost-effectivethanbuildinggas-firedorcoalpowerplants.Thisapproachbenefitstherecipientcountries,contributestoglobalclimategoals,andpositionsChinaasakeytechnologyprovider.It'sacommendableambitiontopursue.
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