The Coal, Petroleum, and Gas Embedded in the Sectoral Demand-and-Supply Chain: Evidence from China

The United Nations' Sustainable Development Goal (SDG) number seven expressly calls for universal access to affordable and sustainable energy. Energy sustainability will require a reduction in energy consumption, including embedded energy consumption in sectoral demand and supply chains. However, few studies have estimated the amount of coal, petroleum, and gas (fossil fuel) embedded in demand-and-supply chains (FFEDS). Furthermore, the inter-and intra-sectoral energy linkages are understudied. This study quantifies China's FFEDS, the world's largest energy consumer. According to the findings, the highest levels of coal, natural gas, and petroleum consumption (CNGPC) are embedded in the construction sector's input demand. Electricity and steam production and supply total intermediate exports (internal plus inter-sectoral) stimulated the highest coal consumption. Crude petroleum products and natural gas products and railway freight transport aggregate supplies induced the highest volume of natural gas and petroleum consumption. Compared to intra-sectoral demand, inter-sectoral demand stimulated significantly larger CNGPCs. In contrast, CNGPC's inter- and inter-sectoral supplies were nearly identical. Modifying current carbon taxation and credit mechanisms to include energy embedded in demand and supply can help to achieve SDG 7.

Automated summary

This study quantifies the embedded fossil fuel consumption in China's demand and supply chains and highlights the highest levels of coal, natural gas, and petroleum consumption in the construction sector. Modifying carbon taxation and credit mechanisms to include energy embedded in demand and supply can contribute to achieving SDG 7.