China Briefing, 27 May 2021: Crypto crackdown; ETS launch nears; Energy-saving data centres

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We handpick and explain the most important climate and energy stories from China over the past seven days.

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Snapshot

China has intensified its clampdown oncryptocurrency miningin a bid to curbrising demandfor energy andcoal。This week, one region proposedtough penaltieson companies engaging in crypto operations – shortly after it had launched adedicated platformfor the public to report on such activities.

Various Chinese media outlets have run headlines hailing that the launch of the nationalemissions trading scheme(ETS) is “in countdown”. Final-stage tests of the programme are underway and the first group of companies are ready to buy and sell, according to reports.

Meanwhile, China’s state economic plannerhas orderedall regions to accelerate the development of energy-saving, “green”data centres– buildings that house powerful computers and servers. The authority demanded that those centres cut their energy use. One province has planned a new facilityunder the seato solve the problem.

Key developments

Crackdown on crypto mining escalates under energy-control targets

WHAT:内蒙古政府,一个关键的比特币b, has stepped up its efforts to stamp out crypto mining. On Tuesday, the northern region “dealt a heavy blow” to relevant businesses by proposing heavy punishments for crypto operators, reported state news agencyXinhua。It came after the local officials had set up a platform to encourage the public to inform on crypto-related activities, said state-affiliatedChina Times。

WHERE:Inner Mongolia has been the country’s crypto centre, accounting for around 8% of all bitcoin mining worldwide, aprevious CNBC reportsaid. In February, the region haddrafted plansto end all cryptocurrency operations. Local officials expected the heightened clampdown to help them hit their mandatory “dual-control” goals – objectives for energy consumption and energy intensity – for the14th five-year planperiod, according to two official notices (hereandhere).

WHO:China’s vice premier Liu He also instructed a “crackdown on bitcoin mining and trading activities” on Friday, reportedReuters。Liu’s order aimed to ensure economic stability – rather than emissions reduction – agovernment statementsaid.

HOW:Crypto mining is a process that sees “miners” using specialised computer equipment to solve complicated puzzles to obtain cryptocurrencies, such as bitcoin. An expert told China’sNational Business Daily(NBD) that the mining tasks are designed to get harder and harder and, therefore, will require more computer processing power and more electricity. Around 5% of the carbon emissions from the nation’s power sector comes from bitcoin mining, added NBD.Newsweekreported that, without regulations, China’s crypto energy consumption would peak in 2024 at 297 terawatt hours (TWh), generating 131m tonnes of CO2.

WHY IT MATTERS:Some 75% of the world’s bitcoin mining was done in China,CNBCreported in April, citing astudy。The research found that China could “end up exceeding its emissions reduction targets” due to the “carbon-intensive” activity, CNBC wrote. Bloomberg said in areportyesterday that the strengthened crypto crackdown was triggered partially by concerns that the trade could lead to “illicit” coal mining. Last month, a coal mine accident left 21 peopletrappedin Xinjiang, another crypto hub. The accident had been linked to power supply for crypto server farms, Bloomberg said.

ETS undergoes ‘trial runs’ to ensure successful launch

WHAT:Authorities have started “trial runs” of the trading platform for the national ETS to ensure the scheme’s successful launch, reported state-run newspaperChina Daily。Meanwhile, the first batch of participating organisations – 2,225 in total – have completed their registration and are ready to trade, according to state-runChina Energy News。

WHERE:The task of developing the national ETS has been shared by two regions: Shanghai and Hubei Province. The Shanghai Environment and Energy Exchange (SEEE) built the trading platform and is hosting its trial runs. Trading companies registered via the Hubei Carbon Emission Trading Centre (CETC), which built the registry platform and now supervises the administrative process.

WHEN:According to the plan, the national ETS will start trading by the end of June. The timeline wassetby Huang Runqiu, head of the Ministry of Ecology and Environment (MEE), in February.

WHO:Lai Xiaoming, chairman of the SEEE, said on Saturday that more than 30 companies had joined the trial runs which would last for “some more weeks”, China Daily reported. His speech came after Li Gao, director-general of the Department of Climate Change of the MEE, inspected the national ETS’s progress in Shanghai and Hubei last week, according to official releases (hereandhere). Yesterday, Liu Youbin, MEE’s spokesperson,announcedthat all regional MEE authorities had “largely completed” the emission allocation works.

WHY IT MATTERS:It has taken China 10 years to develop the national ETS since the State Council, the country’s administrative authority, submitted thefirst proposalin 2010.People’s Daily, the mouthpiece of China’s Communist Party, described the scheme as a “major initiative” for China to “control and reduce greenhouse gas emissions via market mechanisms”. But an article onChina Dialogue, co-written by Kevin Rudd and Alistair Ritchie, stressed that the national ETS would need “high-level political support to succeed”. It stated that such support could ensure that the programme would “achieve its potential to play a key role” in China achieving its climate goals. Look out in the coming weeks for Carbon Brief’s in-depth analysis of the national ETS.

Other news

DATA CENTRES:The province of Hainansaidon Monday that it had begun work on a data centre under the sea – a move set to slash the large amount of power normally required to cool such a facility – reportedReuters。On the same day, the state economic plannerinstructedall regions to improve the energy efficiency and reduce the energy consumption of their data centres in a new national innovation scheme, anofficial noticeread.

CO2 EMISSIONS:China’s CO2 emissions per unit of GDP, or carbon intensity, saw a 1% year-on-year decrease in 2020, according to Beijing’s state broadcasterCCTV。官方频道援引latest statistics from the MEE. It said that last year’s figure was a 18.8% drop compared to the country’s carbon intensity in 2015, exceeding its original target of 18% – which was set by the 13th five-year plan.

UK-CHINA COOPERATION:Danae Dholakia, a British diplomat in Beijing, said she believed that the UK would not be able to “independently” tackle climate change challenges “if it doesn’t cooperate with China”. Dholakia made the comments during an interview with Chinese financial publication21st Century Business Herald。She added the upcoming biodiversity-focused COP15 in Kunming and COP26 in Glasgow would give the two nations “unique opportunities” to establish a “deeper partnership”.

THUNBERG’S TWEET:Greta Thunberg has responded to a column carried by China Daily, which commented on her weight, reportedSky News。Thearticlemocked Thunberg’s figure by saying that her carbon emissions “are actually not small”, judging from “the result of her growth”, according toVICE。The Swedish climate campaigner responded bytweetingthat being “fat-shamed” by Chinese state media was a “pretty weird experience”. Earlier this month, China Briefingexplainedthe circumstances behind why Thunberg has been criticised in China.

SEA LEVELS:The MEE announced that the sea levels along China’s coastal areas are rising at a rate of about 3.4mm per year, ThePaper, a Shanghai-based outlet, reported. In an annual ecologicalreport, the MEE noted that, over the past 10 years, China’s coastal sea levels have remained “high”, compared to a 40-year average.

CARBON FINANCE:Zhejiang has become the first Chinese province to launch financial measures to help companies peak carbon emissions and reach “carbon neutrality”, reportedZhejiang Daily, the region’s official newspaper. Among other goals, the provincial government has pledged to increase its “green loans” by 400bn yuan (£44bn) by the end of 2021, the report says.

Extra reading

• China’s fight against climate change and environmental degradation– Lindsay Maizland, Council on Foreign Relations
• China finances most coal plants built today – it’s a climate problem and why US-China talks are essential– Jeff Nesbit, The Conversation
• The future of renewable energy depends on China– Michael T Klare, The Nation
• Opinion: A green alternative to the BRI– Omair Ahmad, The Third Pole

New science

Coal fly ash is a major carbon flux in the Chang Jiang (Yangtze River) basin
Proceedings of the National Academy of Sciences

A “very large amount” of coal fly ash – the solid waste from burning coal – is making its way into China’s Yangtze River, a new study says. The paper says fly ash now makes up between 37% and 72% of the fossilised organic carbon flux in the waterway – along which about one-fifth of the world’s coal consumption occurs. Two of the co-authors from theCalifornia Institute of Technologytell Carbon Brief that coal burning affects the carbon cycle “over multiple timescales” and fly ash is “often neglected”. They note that the study measured the release rate of human-sourced carbon into the long-term cycle, providing a new angle to track carbon emissions.

Increasing heat risk in China’s urban agglomerations
Environmental Research Letters

According to new research, the future heat risks in China’s major city clusters would be “many times” current levels under high emission-population pathways. In comparison, the same risks would “remain similar” to present levels under low emission-population scenarios, the researchers note. The paper says that five highly urbanised regions in China may face three to 13 “heat danger days” – those with the heat stress index (a combined temperature and humidity measure) higher than 41C – every year between 2041 to 2060. The number of such days is forecast to surge to eight to 67 between 2081 and 2100, if emissions are very high.Prof Zeng Gang, one of the paper’s authors, tells Carbon Brief that climate change research needs to give more attention to health and the economy. He hopes “there would be more focus on the effects of the climate extremes caused by global warming”.

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