FocusChina sets cap on energy consumption; eyes 26% spike by 2015

11 January 2012 06:14  [Source: ICIS news]

By Fanny Zhang

Automobile production at Henan province in China.GUANGZHOU (ICIS)--China is targeting to contain its energy consumption to 4.1bn tonnes of standard coal equivalent in 2015, a 26% increase from 2010 levels but in line with the government’s overall aim of reducing the country’s carbon footprint, industry sources said on Wednesday.

In 2010, energy consumption in the world’s second biggest economy stood at 3.25bn tonnes of standard coal equivalent, more than 8% higher than it had intended.

But as the Chinese economy continues to grow at a healthy high single-digit pace, its energy consumption per unit of GDP should decline, industry sources said. China is expected to post an 8% growth in GDP in 2011.

Its new energy consumption target translates to an annualised growth of 4.7% for 2011-2015, the period covered under China’s 12th five-year plan.

Some analysts warned that China might have difficulty achieving this target given an annual average GDP expansion of more than 8% in 2011-2015.

“Energy consumption growth was set at below 60% of GDP, which is a challenging rate,” said Qiu Xiaofeng, chief analyst at Shanghai-based broker China Merchants Securities.  

Local governments are calling for a cap of 5bn tonnes of standard coal equivalent by 2015, industry sources said.

The implementation of the new target would entail setting of quotas by provincial and municipal governments on the energy usage of various industries, government sources said.

Such limits on power consumption would force local governments to restructure industries through encouraging the pursuit of more energy-efficient projects to help China achieve its emissions target, experts said.

The country targets to reduce its energy consumption per unit of GDP by 16% to 0.869 tonnes of standard coal by 2015, under the government’s 12th five-year plan.

“The energy quota would definitely hit GDP figures. But our goal is to have a healthy economy at minimal environmental [cost],” said Zhou Dadi, an energy expert with China Energy Research Centre.

Setting the quota “is more realistic and effective in controlling energy consumption” as it prevents local government from becoming overly concerned with strong economic expansion at the expense of the environment, said Zhou.

Local governments have been generally passive at implementing measures on cutting carbon emissions, he said.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Fanny Zhang
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