Energy policy of China

Environment and carbon emissions

On June 19, 2007, the Netherlands Environmental Assessment Agency announced that a preliminary study had indicated that China's greenhouse gas emissions for 2006 had exceeded those of the United States for the first time. The agency calculated that China’s CO₂ emissions from fossil fuels increased by 9% in 2006, while those of the United States fell by 1.4%, compared to 2005. The study used energy and cement production data from British Petroleum which they believed to be 'reasonably accurate', while warning that statistics for rapidly changing economies such as China are less reliable than data on OECD countries.

The Initial National Communication on Climate Change of the People's Republic of China calculated that carbon dioxide emissions in 2004 had risen to approximately 5.05 billion metric tons, with total greenhouse gas emissions reaching about 6.1 billion metric tons carbon dioxide equivalent.

In 2002, China ranked 2nd (after the United States) in the list of countries by carbon dioxide emissions, with emissions of 3.3 billion metric tons, representing 14.5% of the world total. However, due to its huge population size (the largest in the world), it only ranked 99 in the list of countries by carbon dioxide emissions per capita, with emissions of 3.2 metric tons per person (compared to 19.8 metric tons per person in the United States). In addition, it has been estimated that around a third of China's carbon emissions in 2005 were due to manufacturing exported goods.

Since 2006, China has overtaken the USA, producing 8% more emissions than the US to become the worlds biggest emitter of pollution.

Energy use and carbon emissions by sector

In the industrial sector, six industries – electricity generation, steel, non-ferrous metals, construction materials, oil processing and chemicals – account for nearly 70% of energy use.

In the construction materials sector, China produced about 44% of the world's cement in 2006. Cement production produces more carbon emissions than any other industrial process, accounting for around 4% of global carbon emissions.

National Action Plan on Climate Change

China has been taking action on climate change for some years, with the publication on June 4, 2007 of China's first National Action Plan on Climate Change, and in that year China became the first developing country to publish a national strategy addressing global warming. The plan did not include targets for carbon dioxide emission reductions, but it has been estimated that, if fully implemented, China's annual emissions of greenhouse gases would be reduced by 1.5 billion tons of carbon dioxide equivalent by 2010. Other commentators, however, put the figure at 0.950 billion metric tons.

The publication of the strategy was officially announced during a meeting of the State Council, which called on governments and all sectors of the economy to implement the plan, and for the launch of a public environmental protection awareness campaign.

The National Action Plan includes increasing the proportion of electricity generation from renewable energy sources and from nuclear power, increasing the efficiency of coal-fired power stations, the use of cogeneration, and the development of coal-bed and coal-mine methane.

In addition, the one child policy in China has successfully slowed down the population increase, preventing 300 million births, the equivalent of 1.3 billion tons of CO₂ emissions based on average world per capita emissions of 4.2 tons at 2005 level.

12th Five-year Plan 2011-2015

In January 2012, as part of its 12th Five-year Plan, China published a report 12th Five-year Plan on Greenhouse Emission Control (guofa [2011] No. 41), which establishes goals of reducing carbon intensity by 17% by 2015, compared with 2010 levels and raising energy consumption intensity by 16%, relative to GDP. More demanding targets were set for the most developed regions and those with most heavy industry, including Guangdong, Shanghai, Jiangsu, Zhejiang and Tianjin. China also plans to meet 11.4% of its primary energy requirements from non-fossil sources by 2015.

The plan will also pilot the construction of a number of low-carbon Development Zones and low-carbon residential communities, which it hopes will result in a cluster effect among businesses and consumers.

In addition, the Government will in future include data on greenhouse emissions in its official statistics. By Mayur Pathakk

Carbon trading scheme

In a separate development, on January 13, 2012, the National Development and Reform Commission announced that the cities of Beijing, Tianjin, Shanghai, Chongqing and Shenzhen, and the provinces of Hubei and Guangdong would become the first to participate in a pilot carbon cap and trade scheme that would operate in a similar way to the European Union Emission Trading Scheme. The development follows an unsuccessful experiment with voluntary carbon exchanges that was set up in 2009 in Beijing, Shanghai and Tianjin.

Coal

Coal is the major source of energy in China. In 2011, according to the IEA, Chinese coal production was equivalent to 3,576 Mt*0.522 toe/Mt*11.630 TWh/toe = 21,709 TWh. Assuming the same caloric value for the imported coal, the net coal energy available would be 22,784 TWh. Equally calculated available coal was 17,000 TWh in 2008 and 22,800 TWh in 2011, with increase of 5,800 TWh in three years. Total renewable energy in China was 3,027 TWh in 2008 and 2,761 TWh in 2005, with increase of 266 TWh in three years. Same period from 2005 to 2008 annual coal use increased 3,341 TWh.

China's coal supply was in 2009 18,449 TWh which was 47% of the world coal supply.

China is the world's top coal producer and ranks third in the amounts of coal reserves. It is approximately self-sufficient in coal, with a production of 2.38 billion ton and a consumption of 2.37 billion tons in 2006. China used to be a major coal exporter, but exports have decreased and China may soon become a net importer.

Top 10 hard and brown coal producers in 2010 (2009) were (Mt): China 3,162 (2,971), United States 997 (985), India 571 (561), Australia 420 (399), Indonesia 336 (301), Russia 324 (297), South Africa 255 (247), Kazakhstan 111 (101), Poland 134 (135) and Colombia 74 (73).

In 2010 China was second highest hard coal importer (157 Mt).

China consumes more coal than any other country. Its share of the world coal production was 48% in 2009 and 28% in 2000. Coal use in the world increased 48% from 2000 to 2009. In practice, the majority of this growth occurred in China and the rest in other parts of Asia. In China, Coal usage double between 2003 and 2007.

Analysis in 2016 shows that China's coal consumption appears to have peaked in 2014.

Petroleum

China's oil supply was 4,855 TWh in 2009 which represented 10% of the world's supply.

Although China is still a major crude oil producer, it became an oil importer in the 1990s. China became dependent on imported oil for the first time in its history in 1993 due to demand rising faster than domestic production. In 2002, annual crude petroleum production was 1,298,000,000 barrels, and annual crude petroleum consumption was 1,670,000,000 barrels. In 2006, it imported 145 million tons of crude oil, accounting for 47% of its total oil consumption. By 2014 China was importing approximately 7 mil. barrels of oil per day. Three state-owned oil companies – Sinopec, CNPC, and CNOOC – dominate its domestic market.

China announced on June 20, 2008 plans to raise petrol, diesel and aviation kerosene prices. This decision appeared to reflect a need to reduce the unsustainably high level of subsidies these fuels attract, given the global trend in the price of oil.

Top oil producers were in 2010: Russia 502 Mt (13%), Saudi Arabia 471 Mt (12%), US 336 Mt (8%), Iran 227 Mt (6%), China 200 Mt (5%), Canada 159 Mt (4%), Mexico 144 Mt (4%), UAE 129 Mt (3%). The world oil production increased from 2005 to 2010 1.3% and from 2009 to 2010 3.4%.

Natural gas

China's natural gas supply was 1,015 TWh in 2009 that was 3% of the world supply.

CNPC, Sinopec, and CNOOC are all active in the upstream gas sector, as well as in LNG import, and in midstream pipelines. Branch pipelines and urban networks are run by city gas companies including China Gas Holdings, ENN Energy, Towngas China, Beijing Enterprises Holdings and Kunlun Energy.

Issued by China’s State Council in September 2013, China’s Action Plan for the Prevention and Control of Air Pollution illustrates government desire to increase the share of natural gas in China’s energy mix. In May 2014 China signed a 30-year deal with Russia to deliver 38 billion cubic metres of natural gas each year.

China was top seventh in natural gas production in 2010.

Electricity generation

In 2013, China's total annual electricity output was 5.398 trillion kWh and the annual consumption was 5.380 trillion kWh with an installed capacity of 1247 GW (all the largest in the world).

This is an increase from 2009, when China's total annual electricity output was 3.71465 trillion kWh, and the annual consumption was 3.6430 trillion kWh (second largest in the world). In the same year, the total installed electricity generating capacity was 874 GW. China is undertaking substantial long distance transmission projects with record breaking capacities, and has the goal of achieving an integrated nationwide grid in the period between 2015 and 2020.

Coal

China currently generates 73 percent of its electricity from coal-fired power stations, which has been dropping from a peak of 81 percent in 2007.

Renewables

China is the world's leading renewable energy producer, with an installed capacity of 152 GW. China has been investing heavily in the renewable energy field in recent years. In 2007, the total renewable energy investment was $12 billion USD, second only to Germany. In 2012, China invested $65.1 billion USD in clean energy (20% more than in 2011), fully 30% of the total investment by the G-20, including 25% ($31.2 billion USD) of global solar energy investment, 37% percent ($27.2 billion USD) of global wind energy investment, and 47% ($6.3 billion USD) of global investment in "other renewable energy" (small hydro, geothermal, marine, and biomass); 23 GW of clean generation capacity was installed.

China is also the largest producer of wind turbines and solar panels. Approximately 7% of China's energy was from renewable sources in 2006, a figure targeted to rise to 10% by 2010 and to 16% by 2020. The major renewable energy source in China is hydropower. Total hydro-electric output in China in 2009 was 615.64 TWh, constituting 16.6% of all electricity generated. The country already has the most hydro-electric capacity in the world, and the Three Gorges Dam is currently the largest hydro-electric power station in the world, with a total capacity of 22.5 GW. It has been in full operation since May 2012.

Nuclear power

In 2012, China had 15 nuclear power units with a total electric capacity of 11 GW and total output of 54.8 billion kWh, accounting for 1.9% country's total electricity output. This rose to 17 reactors in 2013. By 2016 the number of operating nuclear reactors was 32 with 22 under construction and other dozen to start construction this year. There are plans to increase nuclear power capacity and nuclear power percentage, bringing the total electricity output to 86 GW and 4% respectively by 2020. Plans are to increase this to 200 GWe by 2030, and 400 GWe by 2050. China has set an end-of-the-Century goal 1500GWs of nuclear energy, most of this from fast reactors. China has 32 reactors under construction, the highest number in the world.

Rural electrification

Following the completion of the similar Township Electrification Program in 2005, the Village Electrification Program plans to provide renewable electricity to 3.5 million households in 10,000 villages by 2010. This is to be followed by full rural electrification using renewable energy by 2015.

General work plan

The General Work Plan for Energy Conservation and Pollutant Discharge Reduction aims to cut energy consumption per unit of gross domestic product (energy intensity) by 20% over the course of the Eleventh Five-Year Plan which ended in 2010, as well as cutting the discharge of major pollutants by 10%. Implementation involved a variety of measures, including increased use of renewable energy, revised pricing for primary energy sources and electricity, export restrictions on energy intensive and highly polluting products, and tax incentives for pollution-reduction projects. Central and local government will switch to low-energy lighting, and will be compelled to purchase only the most energy efficient and environmentally friendly electrical products

Officials were warned that violating energy conservation and environmental protection laws would lead to criminal proceedings, while failure to achieve targets would be taken into account in the performance assessment of officials and business leaders.

After achieving less than half the 4% reduction in energy intensity targeted for 2006, all companies and local and national government were asked to submit detailed plans for compliance before June 30, 2007.

During the first four years of the plan, energy intensity improved by 14.4%, but dropped sharply in the first quarter of 2010. In August 2010, China announced the closing of 2,087 steel mills, cement works and other energy-intensive factories by September 30, 2010. The factory closings were made more palatable by a labor shortage in much of China making it easier for workers to find other jobs.

Space heating and air conditioning

A State Council circular issued on June 3, 2007, restricts the temperature of air conditioning in public buildings to no lower than 26 °C in summer (78.8 °F), and of heating to no higher than 20 °C (68 °F) in winter. The sale of inefficient air conditioning units has also been outlawed.

Businesspeople

Chinese billionaires in energy business by Forbes included in 2013 Wang Yusuo & family ($2.4 B) the chairman of ENN Group, one of China's largest non-government-controlled energy businesses and Huo Qinghua ( $1.1 B) chairman of China Kingho Energy Group, one of the country's largest privately held mining and energy companies, with operations in China, Africa and Mongolia. and in Hong Kong Sit Kwong Lam ($1.35 B) the founder and chairman of Hong Kong-listed Brightoil Petroleum.

Public opinion

The Chinese results from the 1st Annual World Environment Review, published on June 5, 2007 revealed that, in a sample of 1024 people (50% male):

Another survey published in August 2007 by China Youth Daily and the British Council sampled 2,500 Chinese people with an average age of 30.1. It showed that 80% of young Chinese are concerned about global warming.

Protests

In December 2011 in Haimen, Guangdong, a coastal town of about 120,000 people, residents have protested ongoing for three days (22.12.2011) against plans for another coal-fired power plant. Police were armed with batons and shields and fired teargas to break up demonstrations.