Rystad CEO: China’s Clean-Tech Leadership Powers Global Energy Transition丨Multinationals on China
SFC Correspondent Zheng Qingting, Intern Mu Rongxuan in Beijing
In a recent interview with SFC, Jarand Rystad, the founder and CEO of Oslo‑based Rystad Energy, broke down the ongoing global energy transition into three critical stages: decarbonizing the electricity grid, electrifying energy-consuming sectors, and eliminating residual emissions through e-fuels, biofuels, and carbon capture. He emphasized that decarbonizing power must come first—otherwise electrification alone could increase emissions. Despite U.S. policy hurdles, Rystad noted that the first phase is proceeding well, supported by sustained investments in renewables and battery technology.
Addressing the Paris Agreement’s 1.5 °C goal, Rystad described the 500-gigaton CO₂ cap as “almost too ambitious.” Yet, he asserted that with aggressive decarbonization—mimicking a net-zero trajectory by 2060–2070—and rapid methane reduction, warming could be limited to roughly 1.6–1.7 °C. He urged that methane slash is essential to close the gap, echoing his call for a two-pronged emissions mitigation strategy.
Rystad also weighed in on U.S. energy policy shifts under the Trump administration, noting a pivot toward affordability and security over sustainability. However, he highlighted that U.S. electric vehicle adoption trails behind China and the UK, which have already surpassed 50%. He forecast continued global leadership for OPEC in stabilizing oil markets, even as demand plateaus.
He also highlighted China’s leading position: its thermal generation dropped 4 percent in Q1 2025, and it has already exceeded its 2030 renewable target six years early—reinforcing its role as both a model and key supplier of solar and battery technologies essential to the global shift.
Multinationals on China: How do you evaluate the current global energy transition’s overall progress?
Rystad: First, the energy transition involves addressing three key tasks. Task one is decarbonizing the electricity system. Task two is electrifying everything that can be electrified. Task three is eliminating the remaining emissions through e-fuels, biofuels, and carbon capture, utilization, and storage (CCUS). These tasks contribute approximately 40%, 40%, and 20% respectively to emissions mitigation.
Historically, electricity has had the highest emissions per kilowatt-hour. Therefore, if you begin electrifying sectors without first decarbonizing electricity, you risk increasing global emissions. That's why following this sequence is crucial. In this context, a slowdown in tasks two and three isn't a major issue, provided the first task progresses rapidly. Despite new policies from the U.S. aimed at slowing the energy transition, progress remains robust.
Multinationals on China: Is the Paris Agreement’s 1.5°C target still within reach?
Rystad: Honestly, limiting carbon dioxide emissions to 500 gigatons is an extremely ambitious goal. However, with rapid advancements in energy transition technologies, achieving net-zero by 2060 or 2070 might be feasible. This scenario corresponds to about 950 gigatons of emissions, leading to approximately 1.7°C of global warming.
Methane emissions also play a significant role. Rapid reductions in methane could potentially avoid an additional 0.1–0.2°C of warming. Combining a 74% reduction in CO₂ by 2060 with swift methane mitigation efforts could bring us closer to the 1.5°C target. However, this outcome relies not solely on CO₂ reductions but also on accelerated methane abatement measures.
Multinationals on China: Since the Trump administration restarted coal and eased oil & gas regulations, what changes have you observed in U.S. production, investment flows, and market sentiment?
Rystad: The U.S. narrative has shifted significantly from leading energy transition efforts to focusing on energy affordability and security, often sidelining sustainability. Nevertheless, the overall impact on the energy transition has been limited. Globally, nearly $1 trillion continues to be invested in solar, wind, and battery technologies.
The energy transition won't occur by halting oil and gas production but by reducing consumption through alternative technologies like electric vehicles and renewable power. While the Trump administration has reduced incentives for electric vehicles, the crucial $7,500 tax credit per family remains, though it may expire by year's end. Negotiations are ongoing, considering the employment benefits tied to EV manufacturing in the U.S.
Historically, expectations for U.S. EV adoption have been modest. In contrast, countries like China and the UK have surpassed 50% in electric vehicle adoption and are progressing rapidly. Therefore, despite current headwinds in the U.S., I'm not overly pessimistic about these technologies or their adoption pace.
Multinationals on China: How would faster net-zero transitions affect OPEC's global influence?
Rystad: Oil wells experience a rapid natural decline of about 15% annually. Without new drilling or interventions, production could drop from 103 million barrels per day to below 90 million in a year. Thus, maintaining current output levels requires continuous drilling.
Even with flat or declining global oil demand, supply-demand dynamics remain relevant. OPEC can continue to play a constructive role in stabilizing prices by managing marginal supply, potentially maintaining its influence for the next two to three decades, even in a shrinking market.
Multinationals on China: China has set a target to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. How do you view this commitment?
Rystad: Historically, China has often surpassed its targets. For instance, it aimed to reach 1,200 gigawatts of renewable capacity by 2030 but achieved this six years ahead of schedule. In the first quarter of 2025, thermal power generation in China decreased by 4%, indicating a faster-than-expected decarbonization trajectory. I believe China will comfortably meet its 2030 peak emissions target.
Multinationals on China: How do you see China’s role as a model in the global energy transition?
Rystad: China plays a pivotal role by supplying essential technologies like solar panels and batteries. It holds the largest market share and leads in cost-efficient technologies. Thus, China is not only advancing its own energy transition but also driving global progress in this arena.
Multinationals on China: Under the Belt and Road Initiative, what kind of energy projects should be prioritized?
Rystad: The Belt and Road Initiative has seen significant investments in combined solar and battery projects. Such technologies can enable regions, particularly in Africa, to leapfrog traditional energy infrastructures, similar to how mobile telephony bypassed landlines. In areas lacking local gas resources, directly adopting solar energy and electric vehicles can be more cost-effective than building gas-fired or coal power plants. This approach benefits the recipient countries, contributes to global climate goals, and positions China as a key technology provider. It's a commendable ambition to pursue.
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