China’s oil giant sees its future in hydrogen and clean energy

Chinese flag Source: iStock

China’s biggest oil and gas producer wants to shift half of its output to hydrogen, geothermal energy and clean power by 2050 amid the country’s move toward net-zero emissions.

China National Petroleum Corp. referenced the target in its environmental protection report, which it published on its website Wednesday, saying oil and gas would still make up the other half of its output by then. The company is the parent of PetroChina Co., which said in its annual report in March it aims for new energy to make up half its output by 2050.

The firm has thus far trailed European oil majors in spending on its energy transition. PetroChina spent 2.2 billion yuan ($330 million) on new energy in 2021, with plans to double that amount in 2022, compared to $2 billion to $3 billion a year Shell Plc says it plans to spend. 

In response to China’s 2060 carbon neutrality goal, oil majors PetroChina and Sinopec are aiming to reach net-zero from their own operations by 2050 with CNOOC Ltd. aiming for a decade later. Those targets don’t include emissions from the fuels they sell, which is where most of their carbon footprints lie.

The companies are currently focused on boosting output of cleaner-burning natural gas, while Sinopec also plans to grow its hydrogen business and CNOOC is expanding into offshore wind.  

CNPC also plans to extend its efforts through 2035 to cut emissions of methane, the main component of natural gas that’s also a greenhouse gas with far more near-term heat-trapping potential than carbon dioxide.

The company already set a target of halving methane intensity, or emissions per unit of output value, by 2025 from 2019 levels. In Wednesday’s report it said it planned to further cut intensity, aiming for a further 20 per cent reduction by 2035 from 2025 levels. 

© 2022 Bloomberg L.P.

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