China to cap energy consumption

New plan aims to limit use of fossil fuels

China will cap primary energy consumption at 4.8 billion tons of standard coal equivalent per year by 2020, the State Council said in a new energy strategy plan released on Wednesday, which also included a list of targets for more innovative energy use.

According to the Energy Development Strategy Action Plan (2014-20), the share of coal consumption in the total energy mix will be reduced to below 62 percent by the end of 2020, down from 66 percent in 2013.

In addition, the share of non-fossil fuels will rise to 15 percent by the same time from 9.8 percent in 2013.

To meet the targets, China will need to stick to a yearly growth rate in energy consumption of below 3.5 percent over the next six years.

Capping energy consumption comes at the same time as economic growth is slowing, and the target for GDP growth in the 12th Five-Year Plan (2011-15) appears slightly high, news portal cnstock.com reported on Friday, citing former minister of Industry and Information Technology Li Yizhong.

Last year, energy consumption in China increased by 3.7 percent year-on-year to 3.8 billion tons of standard coal equivalent, according to data from the National Bureau of Statistics (NBS).

Capping energy consumption at 4.8 billion tons is a conservative target, as the current overcapacity in high energy-consuming industries such as cement and steel must be taken into consideration, Zhou Dadi, research fellow at the Energy Research Institute under the National Development and Reform Commission, told the Global Times on Wednesday.

The ongoing transformation of China's economic structure will also help to slow the growth in energy demand, Zhou noted.

In recent months, the country's top leaders have made it clear that China needs to adapt to a "new norm" of lower growth and pay more attention to quality rather than speed of economic growth.

As part of the new energy plan, the development of innovative energy sources such as nuclear power will accelerate and China's coal consumption could peak around 2020 if all goes well, with the share of coal consumption in the total energy mix dropping continually in the next few years, Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Wednesday.

China will aim for carbon dioxide emissions to peak around 2030, according to a joint announcement by Chinese President Xi Jinping and his US counterpart Barack Obama in Beijing on November 12.

The country also pledged to increase the share of non-fossil fuels in its primary energy consumption to around 20 percent by 2030.

Non-fossil fuel prices are always higher than for coal and this could result in higher production costs for Chinese firms, so as well as implementation of more stringent environmental standards there should also be supporting policies for companies, such as resource tax reform, Zhou said.

The new energy plan also said China's energy self-sufficiency rate would be around 85 percent by 2020.

However, the energy self-sufficiency rate has been in a range between 85 and 90 percent in recent years, so there is no need to overemphasize self-sufficiency in traditional types of energy that have a negative impact on the environment, Zhou said.