Carbon leakage: China versus the West, 1999-2019

The purpose of this data-file is to assess how ‘industrial activity’ has changed, in China and in the West (US and Europe), from 1999-2019, as a proxy for the phenomenon called ‘carbon leakage’.

To do this, we have quantified volumes of specific materials (steel, aluminium, copper, plastics, glass, industrial acids) and manufactured goods (cars, refrigerators, textiles, washing machines).

Our broad conclusion is that heavier industrial activity is down 12% in the West over this 20-year period, and up 6.5x in China. At the same time, GDP is up c50% in the West and up 5.5x in China.

The greatest leakage has likely occurred for cars, electronics and machinery. Although other sectors such as solar panels or lithium batteries, where China dominates the supply chain cannot be measured in this data-file, as there is no 1999 baseline.

The data-file also quantifies the share of different energy transition products – wind, solar, batteries, related metals – that are made in China.

China Energy Demand and CO2 Emissions, 2000-2060

This is a model of China‘s total energy demand and CO2 emissions, from 2000-2060, disaggregated across c200 lines. The aim is to stress test future emissions pathways for China as a function of 20 input variables.

Compared to 2019’s baseline of 10GTpa emissions, there are credible pathways ranging from complete decarbonization through to 25GTpa of total emissions in 2060. Which scenario unfolds seems to depend more upon future consumption habits in China than on policy.

In our base case scenario, China’s total useful energy demand rises 2.5x by 2050. But CO2 emissions remain flattish. Gas demand rises 10x to displace coal. Wind and solar reach 40% of the final electricity grid. Please download the data-file to flex input assumptions.

Solar Energy: Where’s the IP?

This data-file tracks 110,000 solar patents filed by geography, by company, by year, since 2000; but particularly in 2019.

Solar patent filings peaked in 2012-13 at 11,500 patents per year. Many  geographies have since slowed by 50-90%; except China, which hit a new peak off 3,500 patents in 2019, leading the industry.

A granular breakdown for 2019 tabulates 6,000 patents, including their descriptions, which you can interrogate fully. 14 out of the top 25 solar patent filers in that year were Chinese companies.

The largest US and European patent filers are also shown. So are the Majors, which have recently filed c30 patents per year (0.5% of the total), two thirds of which can be attributed to a single SuperMajor, looking to scale up in solar.

In 2022, we have updated the analysis, in particular, tabulating more parameters of solar cell efficiency improvements, and the industry’s latest push into TOPCon cells.

Overview of Downstream Catalyst Companies

This data-file tabulates details of the c35 companies commercialising catalysts for the refining industry.  Improved catalysts are aimed at better yields, efficiencies and energy intensities. This is the leading route we can find to lower refining sector CO2 emissions.

In particular, we find five early-stage companies are aiming to commercialise next-generation refining catalysts.

We also quantify which Majors have recently filed the most patents to improve downstream catalysts.

If you would like us to expand the data-file, or provide further details on any specific companies, then please let us know…

Drones attack military fuel economy?

This data-file quantifies the fuel economies of typical military vehicle-types, as $1.7 trn per annum of global military activity consumes c0.7Mbpd of total oil demand on our estimates, which are also included in the data-file.

Military drones  are transformational. Almost all the incumbent military vehicles in our data-file have fuel economies below 1 mpg. But the Reaper and Predator drones, famous for their deployment in recent conflicts, have achieved 3mpg and 8mpg respectively. But small, next-generation electric drones will achieve well above 1,000 mpg-equivalent.

Swarms of small-scale electric drones could emerge as the most devastating military weapon of the 21st century, according to a book we read last year on the topic, arguing that “A swarm of armed drones is like a flying minefield…they are so numerous that they are impossible to defeat… each one presents a target just 4-inches across… and shooting down a $1,000 drone with a $5,000 missile is not a winning strategy”. Our notes on the book are included in the data-file.


China’s Shale Challenge?

China’s future gas production, and thus its need for LNG imports, depends heavily on its prospects in shale: Technically recoverable resources have been assessed at a vast 31.6TCM by the EIA.

But >50% shortfalls are looming against the 2016 target to produce 30bcm by 2020. Production ran at just 11bcm last year. And many Majors have now exited. So what are the main challenges, hindering development?

In order to answer this question, we have summarised ten recent technical paper on the Chinese shale gas industry.

This data-file tabulates the most-cited challenges, and the solutions that are suggested to combat them. It also includes our “top ten conclusions” on Chinese shale gas.

Eni Slurry Technology. A leader for IMO 2020?

This data-file models the economics of Eni’s Slurry Technology, for hydro-converting heavy crudes and fuel oils into light products. It is among the top technologies we have reviewed for the arrival of IMO 2020 sulfur regulation, achieving >97% conversion of heavy fractions. The catalyst is stable and handles even ultra-heavy inputs. We see 10-20% IRRs at $20-40/bbl upgrading spreads. The data-file also summarises EST’s adoption in refineries to-date, future plans, and technical details of the EST process.

Oil demand for chemicals, by product, by region

This data-file breaks down the world’s use of oil to make chemicals (i.e., plastics). It’s split across 13 different products, and the ‘Top 10’ countries/regions. The estimate year is 2016.

Copyright: Thunder Said Energy, 2022.