China to cut industrial energy intensity by 13.5% from 2021-2025

China to cut industrial energy intensity by 13.5% from 2021-2025
People walk past a China Energy coal-fired power plant in Shenyang, Liaoning province, China September 29, 2021. REUTERS/Tingshu Wang

SHANGHAI : China will reduce its industrial energy consumption per unit of output by 13.5 per cent over the 2021-2025 period by introducing new technologies, standards, and financial services, according to a new action plan published on Wednesday.

The country has sought to make its industrial enterprises more efficient by lowering energy consumption per unit of output — also known as energy intensity. It was reduced by 16 per cent over the 2016-2020 period and by 5.6 per cent last year, according to the Ministry of Industry and Information Technology.

Industries now account for around 65 per cent of total national energy consumption, and more efficiency improvements could contribute around 37 per cent of the country’s planned carbon emission reductions from now until 2050, the ministry added.

The new action plan will focus on traditional sectors like steel, nonferrous metals, and construction materials as well as growing high-energy consuming segments like data centres.

Industrial enterprises will also be encouraged to source more energy from low-carbon sources, achieve efficiencies in coal use, and install digital technology to monitor consumption, while policies will also be devised to allow financial institutions to support technological upgrades, the plan said.

Industries will gradually switch from traditional production methods that rely on direct coal combustion, with the steel sector being encouraged to deploy cleaner and more efficient electric arc furnaces (EAF), which use scrap rather than iron ore as raw materials.

China is still building traditional blast furnaces, with an annual steel production capacity of 158 million tonnes under development, compared with 49 million tonnes of EAF capacity, according to research by U.S. think tank Global Energy Monitor (GEM) last week.

Around 730 million tonnes of China’s coal-based steelmaking capacity will reach the end of its working life by 2030, giving the country an opportunity to switch to low-emissions technology, GEM said.