China faces call to cap crude oil consumption by 2025

BEIJING (Reuters) - China will need refining capacity controls and bans on plastics to reach peak crude oil consumption of 720 million tonnes by 2025 if it is to cap its total carbon emissions before 2030, research showed on Monday.

The country needs to maintain crude oil refining capacity below 930 million tonnes by 2025, phase out outdated refineries with annual capacity of less than 5 million tonnes and optimize the structure of refined oil products, the 2020 China Oil Cap report said.

The report, commissioned by the U.S.-based Natural Resources Defence Council and Development Research Centre (DRC) of China’s State Council, forecast China will add 140 million tonnes of refining capacity in the next five years from mega-sized integrated refining complex and shut down at least 70 million tonnes from small refineries in the smog-prone north and east.

“Coal consumption in China reached a peak in 2013 and has plateaued since then. However, the efforts of carbon reduction from coal are offset by the increase from oil and gas sectors,” Yang Fuqiang, a contributor to the report, said.

China’s oil refining capacity hit 863 million tonnes in 2019 and a further 31.5 million tonnes are predicted to have been added in 2020.

At least 38.57 million tonnes of crude oil demand could be cut by 2025 and 83.09 million tonnes by 2035 from the supply and demand sides in the petrochemical sector, the research said.

Policies of restricting and prohibiting the use of certain plastic products, such as plastic mulch used in agricultural sectors, should be also launched as soon as possible.

“The impact of (an) oil consumption cap on China’s economic growth is expected to be very limited,” said Xu Zhaoyuan, a deputy director general at DRC, adding that Beijing should issue a total fossil fuel consumption target as soon as possible.

Reporting by Muyu Xu and Shivani Singh