INTERVIEW: China’s Tencent injects millions to scale up frontier decarbonization tech

China's technology giant Tencent has launched a program called CarbonX, which has mobilized tens of millions of dollars in investments to support laboratory research to explore use cases and enter commercial-scale implementation, Hao Xu, Tencent's Vice President of Sustainable Social Value and Head of the Carbon Neutrality Lab, told Platts, part of S&P Global Commodity Insights, in a recent interview.

Xu said the CarbonX Program is funded solely by Tencent's Sustainable Social Value organization, which allocates non-commercial funding aimed at advancing social and environmental impact. In the first phase of the program, Tencent awarded around $14 million in total across the 13 winning teams. The second round started in December 2024, and Tencent is currently reviewing the participating projects. Xu said his company has again committed tens of millions of dollars in grant funding to support selected projects.

Xu said Tencent's decision to launch this program was to address the "Valley of Death" problem for early-stage climate technology, where innovations emerging from laboratory research face significant obstacles in reaching commercial-scale implementation.

"While funding mechanisms exist at the early-stage research level, from academia, and at the large-scale implementation stage, typically supported by large industrial enterprises, there is a notable funding gap during the critical pilot phase in between," he pointed out.

"[The CarbonX Program] represents the first of its kind initiative in terms of both scale and ambition in China, and it is certainly the first to be led by a technology company in the private sector in China," Xu highlighted, adding that the CarbonX program will support projects globally.

Xu added that the CarbonX 1.0 program focused mainly on Chinese domestic applicants. However, the CarbonX 2.0 program has evolved into a fully international initiative. He added that over half of the applications received this year were from North America, EMEA, Africa and other regions.

"We apply the same evaluation criteria to all submissions, regardless of geographic origins," he said.

Frontier technologies

In the first two phases of the CarbonX Program, Xu said Tencent has focused on cutting-edge Carbon Capture, Utilization and Storage (CCUS), Carbon Dioxide Removal (CDR), and Long-Duration Energy Storage (LDES) technologies.

"CCUS is widely recognized as an indispensable climate technology, particularly for sectors that are difficult to decarbonize, such as cement, steel, chemicals and the power sector. A promising example of a (CarbonX) project in this space is the next-generation carbon capture technology being developed in Serbia, which can help decarbonize the steel industry."

Xu added that negative emissions technologies, such as Direct Air Capture, have also emerged as a vital tool in the fight against climate change, enabling the extraction of CO₂ directly from the atmosphere. "In Kenya's Rift Valley, we're supporting a pilot project that uses geothermal energy to power Direct Air Carbon Capture and Storage," he shared.

He added that LDES is crucial to address a fundamental challenge in integrating intermittent renewable energy into future energy systems. "In the Maldives, we're helping develop 100-kilowatt pilot projects that can store renewable energy for over six hours to make clean power more reliable for island communities."

"These technologies were selected not only because they tackle key bottlenecks on the path to deep decarbonization, but also because they offer significant scalability potential and long-term global impact," Xu highlighted.

Creating an ecosystem

Xu said the CarbonX Program has four categories of partners that have collectively participated in project evaluation and implementation.

First, Xu said that Tencent's industrial partners, especially those from emission-heavy industries, had provided real-world decarbonization scenarios for pilot projects. Examples of the CarbonX Program's industrial partners included steel company HBIS, oil giant Sinopec and generation utility CR Power.

Second, Tencent's investment partners helped it assess the commercial potential of projects and whether it chooses to invest in promising technologies, but their investments are entirely optional. Examples of the investment partners included HongShan Capital Group and China Merchant Venture.

Third, the company's consumer goods partners helped to create consumer-oriented use cases for CarbonX projects, such as turning the captured CO2 into marketable consumer products and transforming waste into consumer goods. Examples of the consumer goods partners include Unilever, McDonald's and Pop Mart, a famous Chinese toy company that produced the globally popular Labubu.

Finally, Xu said Tencent's ecosystem partners were international organizations and industry associations that helped Tencent safeguard the program's credibility, amplify the program's impact and provide specialized knowledge. Examples of the ecosystem partners included the Asian Development Bank and the African Development Fund.

Tencent has announced that it will achieve carbon neutrality throughout its operations and supply chain by 2030, and use only green power for 100% of its energy consumption by the same year.

Xu highlighted that, to meet climate targets, Tencent's first priority is always to reduce emissions and energy consumption through enhancing resource efficiency across all of its operations.

He added that, for remaining emissions that cannot be avoided and reduced, the company has also invested in carbon crediting projects that abate or sequester emissions within China and across the world.