CNPC to diversify operations for green fuel

China National Petroleum Corp, the country's largest oil and gas producer, said on Thursday that it will further step up its clean energy business layout and diversify its operations to meet the country's growing demand for cleaner fuel.

The State-owned energy giant will continue to expand hydrogen development and other clean energy options. It will come up with more than 660 hydrogen-fueled vehicles for the Beijing 2022 Winter Olympics, providing the clean fuel to vehicles in core areas of the Games, the company said in its Environment Protection Bulletin 2020 released on Thursday.

The company saw its first hydrogen station, as well as the first hydrogen station for the 2022 Winter Olympics, put into operation in March. Located in Chongli, the station is dedicated to securing hydrogen supply for vehicles in Zhangjiakou for the 2022 Winter Olympics, it said.

Tang Sisi, an analyst at BloombergNEF, said the country's three major oil companies have accelerated strategic repositioning toward low-carbon technologies, following the government's carbon reductions pledge.

Announcements so far suggest that national oil companies will focus, at least in the near term, on fossil-based options to decarbonize, and will seek a balance between energy security and climate goals, Tang said.

According to the bulletin, CNPC has been continuously pushing forward carbon capture, utilization and storage, or CCUS－an important option for reducing CO2 emissions in the energy sector, which will be essential in achieving carbon neutrality.

It has captured 2 million metric tons of carbon dioxide since the pilot project was put into operation in its Jilin oilfield in 2008, said the company.

According to the International Energy Agency, for the planet to achieve carbon neutrality by 2070, CCUS technologies alone will need to make up approximately 19 percent of global CO2 reductions, with other clean energy technologies comprising the rest.

CNPC is also focusing on natural gas as a key pillar of its low-carbon strategy. The company accounts for 70 percent of China's natural gas output and is accelerating the development of China's nonconventional shale gas reserves.

The company's production of natural gas also exceeded that of oil in 2020, and accounts for 70 percent of the country's total gas production, said the company.

This reversal is 10 years ahead of CNPC's initial plan, signaling accelerated efforts to pivot to cleaner natural gas, said Li Ziyue, an analyst at BloombergNEF.