Archive for 8.2 General Status Reports, Evaluations and Recommendations

China’s Industrial Carbon Dioxide Emissions in Manufacturing Subsectors and in Selected Provinces

In 2009, China announced a goal to reduce its carbon dioxide intensity (CO2/unit of gross domestic product) by 40-45% by 2020 from the 2005 level. In 2011, China established a goal of reducing its CO2 intensity by 17% during the 12th Five-Year Plan period (2011-2015). Five provinces and eight cities have been selected to pilot low-carbon activities and are required to establish local-level emissions inventories. The industrial sector dominates the country’s energy-related CO2 emissions, using two thirds of the total energy consumption. A better understanding of China’s industrial energy use and CO2 emissions at the sub-sectoral and provincial levels can assist researchers and decision-makers in identifying the largest areas of energy-saving and emission-reduction potential. However, previous studies have largely focused on China’s energy use and CO2 emissions at an aggregated level. Based on publicly-available information, this paper estimates industrial energy-related CO2 emissions for each manufacturing sub-sector at the national level and in twelve provinces, including: Chongqing, Guangdong, Hebei, Henan, Jiangsu, Liaoning, Shaanxi, Shandong, Shanghai, Shanxi, Sichuan, and Xinjiang.This paper first explains data availability issues and discusses the methodology as well as conversion factors used for the CO2 emissions calculations. This paper then presents the results of the calculation of the carbon intensity of fuel and electricity for each manufacturing subsector and identifies the largest CO2-emitting sub-sectors in the selected provinces. In addition, three provinces are highlighted, illustrating that economic and energy structure play an important role in the industrial CO2 emissions within provinces. Finally, this paper discusses how to further improve carbon inventories at the sub-sectoral level and summarizes the findings of this study in light of China’s current domestic carbon inventory efforts.

8 Energy Intensive Industries, 8.2 General Status Reports, Evaluations and Recommendations

Addressing the Effectiveness of Industrial Energy Efficiency Incentives in Overcoming Investment Barriers in China

During the 11th Five Year Plan (FYP), China adopted a series of incentive policies, offering financial rewards to industrial enterprises to help them improve their energy efficiency. According to China’s National Development & Reform Commission, from 2006-2010, the Central Government of China allocated a total of 133 billion Chinese Yuan (CNY) (€16 billion) in the form of subsidies and rewards for promoting energy conservation and pollution reduction. These incentives certainly played an important role in helping China meet its 11th FYP energy intensity goal, but key questions remain unanswered as to whether the incentive policies were cost-effective and whether industrial enterprises would still invest in energy efficiency improvements without the incentive policies. With these questions in mind, the paper first reviews overall energy consumption in industry as background for understanding recent policies implemented by the Chinese government. Then, the barriers for industrial energy efficiency are outlined with a focus on the financial barriers for both self-financed and third-party financed projects. Additional information is provided on how barriers differ in small and medium enterprises versus large enterprises, examining the avenues enterprises have for accessing needed capital to make energy efficiency investments. The paper provides an overview of the incentive policies offered by the government – both the energy saving rewards offered to large enterprises and the more recent rewards and tax incentives for energy service companies. Lastly, some simple case studies illustrate how incentives typically offered in China alter an industrial project’s upfront investment cost and payback period, and thus how they impact energy efficiency investment decisions. This analysis can help determine new ways for public expenditure in the 12th FYP to leverage increased private investment in energy efficiency.

8 Energy Intensive Industries, 8.2 General Status Reports, Evaluations and Recommendations

White Paper on Energy Efficiency Status of Energy-Using Products in China (2011)

During the closing year of 11th Five-Year Plan, the enforcement of major energy efficiency policies, implementation of energy efficiency tasks in each region and sector, and unprecedented target and responsibility assessments were all emphasized, so as to guarantee the achievement of the energy conservation and emission reduction goals of the 11th Five-Year Plan. Among them, the following actions targeted major energy-using products: active promotion of energy efficient products and technologies; the publishing of a promotion catalogue of key national energy saving technologies (3rd edition); continuous implementation of the “energy-saving products discount program” project, specifically for the promotion of highly energy efficient air conditioners, energy efficient automobiles and energy efficient motors, new energy automobiles, high efficiency lighting equipment (to replace all low-efficiency lighting equipment for city street lighting, public areas, and public institutions in eastern and central regions as well as western regions where possible); expansion of the coverage of energy efficiency labeling, along with the publishing of the 6th edition of energy efficient label products catalogue; implementation of mandatory and prioritized energy efficient products in government procurement program, thus perfecting the dynamic management system of the government energy-saving product procurement list; implementation of a faster schedule of improvement for legislation and standards; development of energy efficiency management regulations, energy measurement supervision regulations, and energy-saving product certification administration regulations for key energy-users; and lastly development and improvement of energy efficiency standards for energy-using products as well as energy consumption standards for buildings.

8.2 General Status Reports, Evaluations and Recommendations

Energy Audit Practices in China: National and Local Experiences and Issues

China set an ambitious goal of reducing its energy use per unit of GDP by 20% between 2006 and 2010. Much of the country’s effort is focused on improving the energy efficiency of the industrial sector, which consumes about two-thirds of China’s primary energy. Industrial energy audits are an important part of China’s efforts to improve its energy intensity. Such audits are employed to help enterprises identify energy-efficiency improvement opportunities and serve as a means to collect critical energy-consuming information. Information about energy audit practices in China is, however, little known to the outside world. This study combines a review of China’s national policies and programs on energy auditing with information collected from surveying a variety of Chinese institutions involved in energy audits. A key goal of the study is to conduct a gap analysis to identify how current practices in China related to energy auditing differ from energy auditing practices found around the world. This article presents our findings on the study of China’s energy auditing practices at the national and provincial levels. It discusses key issues related to the energy audits conducted in China and offers policy recommendations that draw upon international best practices. LBNL Report 5571E, originally published in Energy Policy, Volume 46.

8 Energy Intensive Industries, 8.2 General Status Reports, Evaluations and Recommendations

National Level Co-Control Study of the Targets for Energy Intensity and Sulfur Dioxide in China

Since 2006, China has set goals of reducing energy intensity, emissions, and pollutants in multiple guidelines and in the Five Year Plans. Various strategies and measures have then been taken to improve the energy efficiency in all sectors and to reduce pollutants. Since controlling energy, CO2 emissions, and pollutants falls under the jurisdiction of different government agencies in China, many strategies are being implemented to fulfill only one of these objectives. Co-controls or integrated measures could simultaneously reduce greenhouse gas (GHG) emissions and criteria air pollutant emissions. The targets could be met in a more cost effective manner if the integrated measures can be identified and prioritized. This report provides analysis and insights regarding how these targets could be met via co-control measures focusing on both CO2 and SO2 emissions in the cement, iron &steel, and power sectors to 2030 in China. An integrated national energy and emission model was developed in order to establish a baseline scenario that was used to assess the impact of actions already taken by the Chinese government as well as planned and expected actions. In addition, CO2 mitigation scenarios and SO2 control scenarios were also established to evaluate the impact of each of the measures and the combined effects.

8 Energy Intensive Industries, 8.2 General Status Reports, Evaluations and Recommendations

Renewable Energy and Energy Efficiency in China: Current Status and Prospects for 2020

Over the past few years, China has emerged as a global leader in clean energy, topping the world in production of compact fluorescent light bulbs, solar water heaters, solar photovoltaic (PV) cells, and wind turbines. Around the world, governments and industries now find themselves struggling to keep pace with the new pacesetter in global clean energy development. Chinese efforts to develop renewable energy technologies have accelerated in recent years as the government has recognized energy as a strategic sector. China has adopted a host of new policies and regulations aimed at encouraging energy efficiency and expanding renewable energy deployment. At a time when many countries still struggle with the aftermath of a devastating financial crisis, the Chinese government has used its strong financial position to direct tens of billions of dollars into clean energy— increasing the lead that Chinese companies have in many sectors. Among other initiatives, the Chinese government has taken strong action to promote renewable energy, establish national energy conservation targets, and delegate energy-saving responsibilities to regions. Key legislative actions include the national Renewable Energy Law, which entered into force in January 2006, the national Medium and Long-Term Development Plan for Renewable Energy, launched in September 2007, and the Medium and Long-Term Energy Conservation Plan, launched in November 2004. Although per capita energy use in China remains below the international average, it is growing very rapidly, spurred recently by the infrastructure-intensive government stimulus program launched in late 2008.

8 Energy Intensive Industries, 8.2 General Status Reports, Evaluations and Recommendations

Market Transformation for Urban Energy Efficiency in China-Project Manual

The acute energy shortage faced by many Chinese cities has dragged down local productivity and living standards. Cities are motivated to actively seek solutions to minimize the gap between energy demand and supply. The project aims to lay out a practical and replicable approach to promote market transformation of energy efficiency in China. Bulk procurements and financing of energy efficiency projects have emerged as promising mechanisms to build the energy efficiency market, while their development in China is still in their infancy. Based on available assets in China (such as local energy conservation centers and ESCOs), the project team worked with key stakeholders (city officials, financial institutions, buyers, suppliers, energy centers, etc.) to catalyze market transformation through cooperative efforts. The concept of project mechanism is originated  from successful cases in developed countries.

8 Energy Intensive Industries, 8.2 General Status Reports, Evaluations and Recommendations

Testing Sectoral Approaches in China

A sectoral approach is a bottom-up instrument to compare the efforts that industrialized countries are making with respect to reducing carbon emissions. Secondly, it is a way of trying to address a whole sector of the economy in a way that would be scaling up the current project-based approach. Getting industries worldwide to perform the same standards would eliminate the possibility of carbon leakage, eliminating the shipment of industries from region to region to escape carbon regulatory policies. This project’s objective was to use the sectoral proposal template tool to facilitate the negotiation of credible, transparent and systematic sectoral crediting baselines. The template combined qualitative and quantitative information on the sector and the relevant circumstances in the country in a structured way. The goal was to improve the understanding of the concept of sectoral crediting baselines and to learn about data availability and data collection needs. Sectoral crediting continues to be an important area of discussion in ongoing international climate negotiations. Thus far, these negotiations have been dominated by proposals for a global carbon market and sectoral crediting mechanisms tied to nationally appropriate mitigation actions for developing countries. In China, the National Development and Reform Commission (NDRC), responsible for renewable energy target policy and potential carbon regulations, has tacitly given lip service to the possible use of sectoral targeting, which is a major step when compared to their prior instances that they have an inherent right to develop without added environmental protection costs.

8 Energy Intensive Industries, 8.2 General Status Reports, Evaluations and Recommendations

China’s Booming Energy Efficiency Industry

China’s energy efficiency industry is emerging as a high growth sector with the country projected to spend as much as Rmb2.1 trillion (USD300 billion) over the next five years on products and services that cut energy use. The key drivers of this development are the Chinese government’s determination to curb the country’s expanding energy appetite as well as higher production and energy costs. Firms that develop cost-effective energy-saving technologies, particularly for the most energy-intensive industries, are poised to capture the opportunities. If successful, these enterprises will not only become profitable, but will also help lead China to a more sustainable energy future.

8 Energy Intensive Industries, 8.2 General Status Reports, Evaluations and Recommendations

How the People’s Republic of China is Pursuing Energy Efficiency Initiatives: A Case Study

he Government of the People’s Republic of China (PRC) has been paying increasing attention to enhancing energy efficiency, especially in the wake of rapid expansion of power generating capacity in recent years. The existing even-load power generation scheduling regime, however, fails to contribute toward the objective of energy efficiency in power generation and is now regarded as a major cause of energy inefficiency and environmental problems. Since early 2007, the government has adopted unprecedented actions to reform the scheduling rule and has coupled it with equally strong actions to phase out inefficient power generating units. The initial outcomes indicate that the policy has been effective and successful. Over 500 inefficient small thermal generating units, with the combined generating capacity of 14.4 gigawatts, were decommissioned during the first year of implementation. This has resulted in significant reduction in coal consumption, greenhouse gas, and other pollutant emissions, and impressive improvement in energy efficiency. Why is the policy successful and effective? What challenges lie ahead during further implementation? What lessons can one draw from the experience in the PRC? This paper attempts to address these questions, focusing on the key concern of implementation. Any program, no matter how meticulously designed, amounts to nothing if not implemented carefully.

8 Energy Intensive Industries, 8.2 General Status Reports, Evaluations and Recommendations