Insights from BCC Research

Apple Helps China Take a Bite out of its Environmental Challenges with Renewable Energy

Posted by Clayton Luz on Dec 16, 2015 6:00:00 AM

Apple has taken significant steps to protect the environment by transitioning from fossil fuels to clean energy in China. In October, the company announced two new programs aimed at reducing the carbon footprint of its manufacturing partners in the country where most iPhones are manufactured and assembled.

The programs will avoid producing more than 20 million metric tons of greenhouse gas pollution in the country between now and 2020, equivalent to taking nearly 4 million passenger vehicles off the road for one year, the company stated.

“Climate change is one of the great challenges of our time, and the time for action is now,” Tim Cook, Apple’s CEO, said last October. “The transition to a new green economy requires innovation, ambition and purpose. We believe passionately in leaving the world better than we found it and hope that many other suppliers, partners and other companies join us in this important effort.”

CHINA’S POWER SURGE

The announcement comes on the heels of a surge in electricity consumption by China in the past year. In 2014, the country saw a nearly 6% increase in electricity consumption according to a report by the China Electricity Council, says BCC Research analyst Maya Agnani. “The industrial sector is a major consumer of power in China, followed by tertiary industries. Coal-fired power generation in Asia-Pacific countries such as China, India and Indonesia is high due to their abundance of coal,” she explains.

Agnani says that the governments in these countries are currently focusing on reducing carbon footprints, of which the most hazardous and largest source is coal-fired power generators. She notes that Apple’s endeavor to reduce the carbon footprint of its partners in China helps bolster that country’s Five-Year Plan for Renewable Energy, which set a target of 11.4% renewable energy consumption.

CHINA’S COMMITMENT TO CLEAN ENERGY BEGINS AT HOME

Apple currently powers 100% of its operations in China and the U.S., and more than 87% of its worldwide operations, with renewable energy. The company also plans to build more than 200 megawatts of solar projects in the northern, eastern and southern grid regions of China, which will produce the equivalent of the energy used by more by than 265,000 Chinese homes in a year. In addition, it will partner with suppliers in China to install more than 2 gigawatts of new clean energy in the coming years.

Apple’s programs in China help demonstrate the country’s own commitment to reducing its air pollution problem, which has worsened in recent years, says to Agnani. “China is suffering from an increasingly severe air pollution problem and the situation has further deteriorated, especially in northern China,” she reports. “Prime Minister Li Keqiang announced a new ‘Combatting Air Pollution Action Plan’ in 2014, which aims to curb pollution by targeting the reduction of the use of coal in particular. This was followed by another action plan published by the government in 2014 to combat air pollution, which includes a prohibition on new coal-fired power plants in the cities of Beijing and Tianjin and the Provinces of Hebei and Shandong.”

She adds that the plan also aims to reduce coal-generated power to below 65% of national total energy consumption, compared with 65.7% in 2013.

Overall, Agnani reports that “increasing demand for electricity and the quest to replace electricity produced by conventional means, along with growing environmental concerns, are expected to increase the share of renewable resources in the global electricity generation market during the next several years.”

Topics: Energy and Resources