China Energy Industry

China boosts energy efficiency, misses goal: source

Emma Graham-Harrison, Reuters

February 12, 2007

Beijing: China’s campaign to cut the amount of oil and power its galloping economy needs to keep growing notched up a modest success last year, with “energy intensity” falling sharply in the second half.

A preliminary official report circulated to government and industry officials estimated the amount of energy China requires to generate each dollar of national income fell by 1.0-1.5 percent last year, an industry source told Reuters on Friday.

While far short of Beijing’s goal of a 4 percent reduction, the drop reversed a rise in intensity registered over the first half after China cracked down amid mounting government concerns over pollution and energy security. The data may provide hope that China is serious about containing its demand for energy, most of it supplied by burning dirty coal, which could make it the top emitter of greenhouse gases before the end of the decade.

The intensity measure, unveiled only in March last year but highlighted by top leaders as a key target for the world’s fourth-largest economy, rose 0.8 percent in the first six months of the year, Chinese officials reported earlier. That suggests a sharp fall from July in order to reduce the full-year measure. “It is a very good signal to see energy intensity begin to decline, in 2007 we expect to see more,” the source said.

Another source said China had achieved a cut of around 1 percent, but declined to comment further. Beijing said last month it had missed by a wide margin the 2006 target but held off reporting the exact number as it checks provincial figures. Officials at the energy policy-setting National Development and Reform Comission declined to comment on the figure, but said official data would probably be released later this month.

Government push

The target is part of a wider push for a 20 percent cut by 2010, initially seen as overly ambitious by many foreign and domestic experts. Beijing is struggling to cool an economy that in 2006 grew at 10.7 percent, the fastest in a decade. But if last year’s reduction is confirmed, it may be a sign that increasingly tough measures, amid growing concern about climate change, are fostering a downtrend. After decades of promoting economic growth at almost any cost, Beijing has made energy saving and air pollution control key to officials’ career prospects and made leading companies commit to specific efficiency improvements.

“The data has not yet been released, but you cannot expect it to reach 4 percent in the first year. The 20 percent target is over five years, so perhaps we can expect it to improve over coming years,” said one researcher at a government think tank. The central government has also set detailed provincial targets that aim to reflect the industrial base and growth prospects of each region, with less demanded of poorer areas.

“Beijing, Shandong, Shanghai, Tianjin and Guangdong met their targets but we expect to have a couple more,” one source said. The southeastern and central provinces of Zhejiang, Fujian and Jiangsu were among those that might reach their goals. Energy efficiency and pollution are expected to feature high on the agenda at the once-yearly session of China’a rubber stamp parliament, the National People’s Congress, held in the Chinese capital in March.

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