06/08/2020

China is constantly exploring new ways and paths for energy conservation in order to achieve green development. Over the past few years, numerous energy conservation policies and measures have been formulated and implemented at all levels throughout the country, promoting energy conservation in a variety of fields such as industry, construction, transportation, public institutions and residential buildings.

China’s energy conservation policies and measures mainly focus on seven aspects: (i) improving overall planning and target management; (ii) improving laws, regulations and standard systems; (iii) raising public awareness and organising the National Energy Conservation Week; (iv) promoting policy and market mechanisms; (v) facilitating R&D and dissemination of technologies; (vi) improving the management of key energy users; and (vii) participating in international energy efficiency cooperation.

 

  1. Improving overall planning and target management

Since the 11th Five-year Plan (2006-2010), China has set up clear national targets for energy conservation to be achieved over each Five-year period. For instance, for the 13th Five-year Plan, the overall targets for energy conservation include a 15% drop by 2020 in national energy consumption per 10,000 CNY of GDP compared with 2015, and less than 5 billion tons of standard coal of total energy consumption. It has also made significant efforts to improve overall work management and planning by formulating the Energy Conservation and Emission Reduction Comprehensive Work Plan, which allocates detailed tasks to specific levels, regions, sectors and key energy users, and introduced a Target Responsibility Evaluation mechanism to evaluate the work of all levels of government and key energy users.

 

  1. Improving laws, regulations and standard systems

In China, the major national law for energy conservation is the Energy Conservation Law, which was first enacted in November 1997, and then reviewed in 2007, 2016 and 2018. The Law stipulates the overall principles for energy conservation in areas including industry, construction, transportation, public institutions and key energy users. A series of supporting regulations have also been formulated and/or reviewed by the central government to facilitate the implementation of the Law, including: the formulation and revision of the Administrative Measures for Energy Efficiency Labels and the Administrative Measures for Energy Conservation of Key Energy Users; and the formulation of the Measures for Energy Conservation Supervision and the Measures for Energy Conservation Review of Fixed Asset Investment Projects.

As for China’s energy conservation standard system, there currently exist 340 national standards – 200 of which are mandatory – covering all key sectors and facilities. Standardisation efforts continue to be made in order to support and meet the growing demand for energy conservation: for instance, the development of standards for energy conservation is listed among the key priorities of MIIT’s Key Work Points for the Standardisation of Industry and Communication Technology in 2020.

 

  1. Raising public awareness and organising the National Energy Conservation Week
  • Organisation of ten energy conservation campaigns

In 2008, The State Council announced ten energy conservation campaigns to increase public awareness of energy conservation:

  • Experience energy shortage;
  • Drive one less day per week;
  • Restrict indoor temperature and reduce the use of elevators;
  • Restrict the use of streetlight and landscape lighting;
  • Use energy conservation products;
  • Use environment-friendly products;
  • Reduce the use of disposable items;
  • Wear casual clothes during official businesses in summer;
  • Foster energy conservation habits;
  • Promote energy conservation policies.

These campaigns have been implemented successfully throughout the decade, and some have even become integral part of the daily lives of Chinese people.

  • National Energy Conservation Week

The National Energy Conservation Week was created in 1990 during the sixth meeting of the State Council’s energy conservation office, with the objective to raise public awareness of energy conservation. Since 1991, the activity has been held every year, gradually growing into a flagship nationwide campaign organised by 14 national ministries, including NDRC, the Ministry of Ecology and Environment, the Ministry of Education, MIIT, etc. For each annual edition of the Energy Conservation Week, a specific theme is chosen that best serves the need at the time for energy conservation, with various activities held nationwide.

In 2020, the 30th National Energy Conservation Week was held from 29 June to 5 July, with the main theme being “save energy and increase efficiency for lucid waters and lush mountains”. Numerous activities were organised to showcase and disseminate energy conservation concepts, knowledge, products and technologies, and to promote public energy conservation and consumption of green products.

 

  1. Promoting policy and market mechanisms
  • Market mechanisms

In China, market mechanisms have constantly been improved to provide more effective support to energy conservation. Policies and measures in this regard include:

  • Favouring price, tax and financing policies supporting energy conservation, e.g.: the introduction of a price-based resource tax on coal; the transformation of environmental protection fees into taxes; differential and punitive electricity prices; tiered pricing for electricity for energy-intensive industries and enterprises; etc.;
  • Establishment of certification systems for energy conservation products, such as the Energy Conservation Certification;
  • Launch of the Energy Efficiency “Top Runner” Program, under which detailed lists of energy-efficient products, enterprises and public institutions are selected and published to represent key benchmarks for energy conservation, and to incentivise others to follow;
  • Reimbursable use of energy rights and pilot energy right trading;
  • Energy Performance Contracting (EPC) model, an investment model by which the cost of energy conservation projects can be reimbursed by saved energy costs.

 

  • Government tax relief and financial support

In China, government tax relief and financial support has always played a vital role to stimulate individuals and enterprises to reduce the use of energy. The following policies and measures have been implemented in this regard by the Chinese government:

  • Preferential VAT policies, such as VAT exemptions or refunds;
  • Corporate Income Tax (CIT) incentives, such as CIT deduction for special equipment for energy and water conservation, and CIT reliefs for energy and water conservation projects, EPC projects, and the Clean Development Fund;
  • Individual Income Tax incentives, such as Individual Income Tax exemptions for energy conservation awards;
  • Vehicle and boat tax incentives, such as vehicle and boat tax exemptions and deduction for electric vehicles, fuel cell vehicles and new energy vehicles;
  • Interim Measures on Special Management of the Central Budgetary Investment in Ecological Development, which specifies the central government’s financial support for major projects in resource conservation and cyclic utilisation, environmental pollution control, and the energy conservation and environmental protection industry.

 

  1. Promoting R&D and dissemination of technologies

In order to provide a technological foundation for China’s energy conservation efforts, numerous policies and measures have been formulated and widely adopted to encourage the R&D and dissemination of energy conservation technologies. Some examples include:

  • R&D: organisation and execution of commercialisation/industrialisation projects for key energy conservation technologies; facilitation of R&D and commercialisation/industrialisation of emerging energy conservation technologies and equipment; and promotion of the integrated application of energy conservation systems.
  • Dissemination: establishment of a market-oriented green technology innovation system; collection from the public of proposals for advanced green technologies; appraisement and selection of the first batch of green technologies; and facilitation of R&D, transfer and promotion of green technologies in response to market demands.

Relevant policy documents recently issued by the National Development and Reform Commission include:

  • The Green Industry Guidance Catalogue (2019 edition), in February 2019;
  • The Guiding Opinions on Establishing of a Market-oriented Green Technology Innovation System, in April 2019;
  • The Notice on the Organisation of Green Technology Recommendation, in June 2020; and
  • The Notice on the Establishment of the Green Industry Demonstration Base, in July 2020.

It is also noteworthy that after China joined the Mission Innovation initiative in 2015, a global initiative of 24 countries and the European Commission working to reinvigorate and accelerate global clean energy innovation, China committed to double its investment in clean energy research and innovation by 2020. To this end, it has significantly supported R&D investment in clean energy through National Key R&D Programmes (also called Megaprojects). Fifteen out of 64 currently-existing National Key R&D Programmes (NKPs) are dedicated (fully or partially) to R&D in clean energy, including projects for new energy vehicles, highly-efficient development and utilisation of water resources, magnetic confinement fusion, smart power grid technologies and green building.

 

  1. Improving the management of key energy users

The management of key energy users is of great significance for raising overall energy efficiency and for controlling energy consumption levels. In this regard, a series of policies and measures have been rolled out by China, including:

  • Identification and mapping of key energy users;
  • Allocation to specific key energy users of “double control” targets, i.e. control of both quantity and intensity of total energy consumption;
  • Promotion of a voluntary commitment system calling for energy users to participate voluntarily and meet certain energy conservation requirements. The list of enterprises who have fulfilled the commitment will be disclosed publicly;
  • Requirement for key energy users to submit periodic reports on energy consumption;
  • Appointment of responsible person for energy management in key energy users;
  • Establishment of an online energy consumption monitoring system for key energy users.

 

  1. Participating in international energy efficiency cooperation

China has become increasingly active in international energy efficiency cooperation. A flagship initiative is the G20 Energy Efficiency Leading Programme (EELP) approved in 2016 during the G20 Hangzhou Summit. The programme, which is mainly led by the Chinese government, outlines long-term targets, cooperation principles and fields, as well as implementation mechanisms for energy conservation in all G20 countries. The key priority fields listed in the programme include: means of transportation (especially heavy trucks); interconnected equipment; energy efficiency financing; construction; energy management; power generation and super-efficient equipment; TOPTENs (top ten energy efficiency technologies and top ten implementations); regional energy systems; frameworks for sharing energy efficiency knowledge; terminal energy consumption data; and measurement of energy efficiency. The programme reflects China’s “go global” policy as well as its growing influence in international cooperation on energy efficiency.

In addition, since China’s participation in the Mission Innovation initiative from 2015, China has been a very active player in international cooperation on clean energy research. The two main channels through which the Chinese government supports international cooperation in clean energy research are intergovernmental cooperation NKPs which open to universities, research institutes and enterprises, and the establishment of joint research partnerships or facilities between Chinese public institutions and foreign governments or institutions.

 

In conclusion, China has formulated and implemented, at all levels, a wide range of energy conservation policies and measures. These represent a solid proof of China’s determination and commitment to shift towards a green country. Such efforts are expected to be continued and even intensified in the future to achieve more ambitious energy conservation targets, a stricter Target Responsibility Evaluation mechanism, to substantially improve energy conservation in key fields, and to divulgate and raise more widely energy conservation awareness.