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Carbon Pricing

Published on January 2nd, 2018 | by Nicolas Zart


CHINA X Cleantech — 1st Edition

January 2nd, 2018 by  

Welcome to CHINA X Cleantech, where we talk about electric vehicles (EV) and clean technology in China. We’ll take a look at notable recent news out of China and recap it weekly — always including voices from experts living in China.

Click the link above for the full CHINA X Cleantech page. Subscribe to the CHINA X Cleantech newsletter here.

Why Chinese cleantech? The country is the largest emitter of CO2, and has also firmly cemented itself as a global leader in clean technologies. Sooner or later, we will see Chinese electric cars sold globally, and Chinese solar cells and solar panels already dominate global sales. In early editions of CHINA X Cleantech, we’ll spend some time figuring out who’s who and what does what.

NIO Introduces The Electric SUV ES8, & More

Perhaps two of the best-known Chinese EV makers are BYD and NIO. NIO, ex-NextEV, has just introduced its all-electric SUV in China. It’s named the ES8.

While China has a lot of SUVs and a few electric ones, what makes the NIO a little more attention-worthy is that the company has also been working on two other fronts. It is involved with racing in the Formula E Championship and has lapped some impressive numbers on the Nurburgring.

While we can lament that SUVs in China are a tad too close to their Western counterparts, the NIO tries to establish its own brand recognition by following some of the modern design cues adopted by Nissan and Honda, especially noticeable in the C pillar.

Essentially, the ES8 is a 220-mile range EV that starts at $68,000 before incentives and subsidies. The reason why that is important is that it competes head on with Tesla Model X there. The Model X is disqualified from subsidies and faces import charges, as well as taxes since it isn’t made locally. That jacks up its price considerably. The ES8 will have fast charging as well as something we don’t see often here, battery swapping, which makes it capable of energizing the EV in three minutes.

BAIC Goes 100% Electric By 2025

Already covered on CleanTechnica by Tim Dixon, our local Chinese reporter, BAIC announced that it will be producing only electric cars by 2025. At least, that’s the target. There must be something in the air, since many carmakers are claiming to go electric by the middle of next decade. Hey, if even Toyota is finally turning around and embracing EVs, why wouldn’t China do it too? Let’s not forget that the Chinese government mandated what it called the Alternative Energy Vehicle program as far back as 2003, when we were blissfully making bigger and more bloated gas cars in the West.

BAIC’s announcement happened at the inauguration of the Beijing New Energy Vehicle Technology Innovation Centre by the President and Chairman of BAIC Group, Xu Heyi. Mr. Xu promised to end the sales of fossil fuel passenger vehicles by 2025. This is now the second Chinese automaker to make the EV commitment, closely following Changan Automobile Co.

The BAIC Group is a state-owned company as well as being the largest Chinese automaker and EV producer.

This announcement comes on the tail end of a recent announcement that three state-owned Chinese carmakers were working together on EVs, autonomous vehicles (AV), car parts, and car manufacturing. FAW Group Corp.Dongfeng Motor Corp., and Changan Automobile Co. are sharing resources. We covered the story here as well and made a live appearance on the international Chinese state-owned TV channel CGTN.

Renault Strikes An Electric Alliance With Brilliance China Automotive

And perhaps in a move that if you can’t beat them, join them, Renault struck an alliance with Brilliance China Automotive to sell its EVs over there, originally covered on CleanTechnica by James Ayre. One of the obvious reasons Renault is doing this is that China imposes taxes on EVs not made in China. Essentially, this is in answer to an anticipation of a greater demand for electric light-duty commercial vehicles with stricter regulations that should go into effect soon — and Renault’s intention to capitalize on that with the help of a local partner to get in the door.

This joint venture will work on the design and production of Renault light-duty commercial vehicles sold under the Renault, Jinbei, and Huasong brand names. All companies hope to sell 150,000 vehicles a year by 2022 as an acceleration of their electrifying powertrain plans.

China Launches Carbon Tax

China promises to keep the momentum going after detailing its plans for the world’s largest emissions trading system, covering more than 1,700 power companies and 3 billion tonnes in total greenhouse gas emissions.

The National Development and Reform Commission (NDRC) Deputy Director Zhang Yong at a press conference in Beijing, China, plans to “control and reduce greenhouse gas emissions and promote green low-carbon development.”

According to Li Gao, Director of the Climate Department at NDRC: “Trading will begin after a period of ‘preparatory work’ and will ‘gradually expand market coverage’ to include ‘other high-energy-consuming and high-emission industries.’”

If you’re wondering if this is mostly talk, the trading system was already approved last week by China’s State Council. A few pilot schemes have already been in place in 7 provinces and cities in China. The first trading system already dates as far back as 2013. China has clearly spent time fine-tuning the system.

In fact, Dirk Forrister, President and CEO of the International Emissions Trading Association, was quoted as saying: “China joins a growing number of jurisdictions, such as California, the EU and South Korea, which are using market-based measures to cut climate emissions in a cost-effective and efficient way.”

42 national and 25 subnational jurisdictions already have carbon pricing. The European Union Emissions Trading System is currently the largest carbon market and covers about 1.75 billion tonnes of emissions. But this news makes China the world’s largest carbon market. We can see how the country drew lessons from previous markets and will ensure that it works in harmony with other national policies. The United Nations Climate Change said about China’s launch of the world’s largest emissions trading system: “We commend the Chinese government for taking these steps to realize its long-term vision.”

We are eagerly waiting to see what the West, particularly the US, will do to follow this tough act of global leadership.

2018 Chinese Electric Vehicles Subsidies — Rising Standards

2017 draws to an end and we have news on China’s development of electric vehicle subsidies for 2018. Major changes lie ahead. Firstly, the new subsidy policy is designed to encourage higher range and lower energy consumption in electric vehicles, while removing and decreasing subsidies to lower ranged models. Additionally a key policy change is that regional subsidies are coming to a end in China. The 2018 subsidy scheme is in line with the end goal of withdrawing subsidies and pushing automakers to make better electric vehicles.

  • Firstly, vehicles with driving range below 150 km will not receive subsidies, vehicles with 300 km of driving range will get the current subsidies, and vehicles with ranges over 400 km have higher subsidies — this is to encourage automakers to produce longer range vehicles that are more practical for consumers.
  • Secondly, battery power/weight requirements have been increased, going from 90 Wh/kg to 105 Wh/kg. They also only apply the full subsidy for vehicles with 140 Wh/kg batteries, again pushing for better electric vehicles.
  • Thirdly, power consumption requirements have been increased, pushing for more efficient vehicles, which fit into the government policy to push the development of better electric vehicles and better underlying technology.

In 2016, China outlined that its subsidies for new energy vehicles will end by 2020 and that they will drop 20% each year until 2019, when they will decrease 40% compared to 2016 levels. That will then completely end the subsidies. Chinese automakers have not been caught out by these developments, as a number of 300 km range electric cars are ready to meet these requirements.

Electric Cars Matching The 300 km Range Requirement

BAIC EU300: The EU300 from BAIC has a reported range of 300 km and supports both fast charging and battery swapping. It is claimed to have low energy consumption and high efficiency.

Chery Tiggo 3Xe: The Tiggo 3xe from Chery has 351 km of range and also supports fast charging.

Dongfeng Fengshan E70: The Fengshan E70 has a range of 350 km and is equipped with fast charging capability.

Geely Dorsett EV300: Geely Dorsett EV300 has a range of 360 km and is capable of fast charging.

Electric Logistics In China — The Next Frontier

Electric vehicles are not all sexy next-generation Roadsters or Chinese AI-linked “intelligent” cars. The mundane backbone of the economy of logistics vehicles is also undergoing electrification. Companies like Tesla are pioneering electric semi trucks, but in China, a large shift in medium- and short-range logistics vehicles is happening.

Recently, 14 Chinese ministries released an action plan by the concise name of: Action Plan for Promoting the Healthy and Stable Development of Road Freight Transport Industry (2017–2020). Concise, yeah?

The plan is supposed to help companies gain easy access to new energy delivery vehicles, organise pilot projects, and promote electrification of urban freight vehicles. Vice minister of the Ministry of Industry and Trade Xin Guobin said that “China has started the stopping of the sale of fossil fuelled trucks.”

This action plan is to ensure the industry takes this deadline seriously and takes the opportunity to develop the next generation of new energy vehicles. Many major enterprises have started to produce electric freight vehicles, and local governments have started to reduce restrictions on rights to access for new energy vehicles, which allows them easy of access to city centres and encourages freight companies to shift to electric freight vehicles. They include Shanghai, Tianjin, Wuhan.

Efforts to test and benchmark electric logistics vehicles is an ongoing process in China. In September, the “2017 Shenzhen, China New Energy Vehicle (Logistics Vehicle)” event was held and 27 companies showed how their new energy logistics vehicles compared to each other in a testing environment. Many of the new energy vehicles were electric vehicles. These events give us a glimpse into the emerging market, as these 27 companies are showing off just the start of this revolution.

We hope you’ve enjoyed this CHINA X Cleantech dispatch. To receive this every week in your inbox, please sign up for the free newsletter and the mandarins will keep whispering in your ear.

We look forward to bringing more news next week once we see what else is happening in China.

新年快乐 or Happy New Year!

In the meantime, also, we welcome your tips, suggestions, and thoughts on any Chinese clean cars you have driven.

“Not the finger! The moon. The moon!”

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About the Author

Nicolas was born and raised in the world of classic cars of the 1920s. It wasn't until he drove an AC Propulsion eBox and finally a Tesla Roadster that the light went on. Eager to spread the news of that full torque, he started writing in 2007 for various CleanTech outlets. Since then, his passion led to cover renewable energy, test drives, podcasts, shoot pictures, and film for various international outlets both in print and online. Nicolas offers an in-depth look at the e-mobility world through interviews and the many contacts he has forged in those industries. Today he focuses most of his writing effort on CleanTechnica, a global online outlet that covers the world of electric vehicles and renewable energy. His favorite tagline is: "There are more solutions than obstacles."

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