For years, China has been scrutinized for its lenient emissions targets and regulations, and for good reason. However, Tianjin, Xin Guobin, the Vice Minister of Industry and Information Technology, just announced that the Chinese government is working on a timeline to completely end the production and sale of gas-powered automobiles.
The government allegedly plans to implement strict regulations and “something like a cap-and-trade program” on fuel and emissions, which is a method of controlling overall emissions in which a “cap” on emissions is enforced. If certain corporations don’t reach their allocated maximum amount, or cap, they can sell the difference to buyers who require more emissions, thus creating a new market.
Though these programs haven’t always worked well in the past because they often don’t inspire all that much change, it’s still a step in the right direction for China. But, a ban on the production and sale of all gas-powered cars? Now, that could really cause some positive change.
China represents the world’s largest new car market, selling 28.03 million units last year alone, and is responsible for approximately 30% of the world’s vehicle sales. So, it’s easy to imagine how a ban on gas-powered cars could drastically affect the gas industry.
Despite China’s poor reputation amongst environmental activists, this announcement didn’t necessarily come out of nowhere. The international community has been pressuring China to tighten its environmental regulations for years, and the government has been complying somewhat by issuing “new energy vehicle” subsidies to automakers to promote switching to electric cars. Plus, China had already vowed to cap carbon emissions by 2030.
The Chinese government is expected to carry out a “zero-emission vehicle mandate,” similar to that of California, whereby automakers will have to build a certain percentage of electric and fuel cell vehicles.
What Would This Mean for Oil and Gas?
Let’s be honest: Oil and gas are dying industries. They’re headed for the grave, as they’re being threatened by technologies that might not only be cheaper, but are renewable. What we often forget is that these are finite resources — they will run out, and the sooner we figure out a plan for when that happens, the better.
Plus, these alternatives are environmentally-friendly, as opposed to contributing to the destruction of the environment like oil and gas do, which is ultimately the most important factor here. We cannot live in a world that is polluted or destroyed; it’s our home, and we should not only be respecting it, but preserving it as well.
A recent article published in Bloomberg explained how much of an impact China’s recent decision to phase out gas cars could have on the sale of new cars as well as the oil and gas industries. New projections estimate that nearly 80% of the global auto market is anticipated to phase out gas cars and replace them with electric cars. It’s no question that if and when that time comes, demand for gasoline and diesel will plummet.
China’s auto industry plan was published in April of this year and revealed that new energy vehicles, including electric and hybrids, will make up all the future growth sales in the country. It’s expected that sales of these new energy vehicles will skyrocket to 7 million annually by 2025, and that approximately 800,000 new charging stations for electric cars will be built in this year alone.
China isn’t alone though, as many other countries have plans to phase out gas cars as well. For example, Dutch parliament motioned to end all gas and diesel car sales by 2025, India hopes to end gas and diesel car sales by 2030, Norway has agreed to do so by 2025 (though 40% of their newly registered vehicles were already hybrid, electric, or hydrogen this year), and Britain and France both plan to do so by 2040.
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Yes, oil and gas have helped us progress immensely over the past century and they’re still important elements of society and the global economy, but their time is nearing its end. Renewable energy is our future, and it’s important that we acknowledge this fact and understand how crucial it is that we start to transition toward these technologies.
It’s also important to note that there’s no telling whether electric cars will completely replace gas cars any time soon or not, especially given that they don’t even represent a significant part of the auto market yet. There were just under 700,000 electric vehicles sold last year, in comparison to the 84 million new vehicles sold worldwide. Let’s hope that these regulations and policies actually come into fruition!
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