China Energy Outlook 2020 - Flipbook - Page 67
Energy Efficiency Top-Runner Program
While the Energy Efficiency Top Runners for industry, the public sector, and end-use products
have been selected and publicized on a regular basis since 2016, there is a lack of monetary
incentives or rewards to motivate Top Runners to continue improving and there are
weaknesses in program design and participation.
Drawing on the experience from Japan's Top Runner Program, China initiated its Top-Runner
Program to recognize the best performers in energy efficiency in China’s industrial facilities,
appliances, and public institutions (NDRC, 2014a; State Council, 2012; State Council, 2013a;
State Council, 2013b; State Council, 2014). By publishing and recognizing the Top-Runners, the
program aims to support and incentivize the best performing enterprises as well as to guide
additional enterprises and public institutions to become Top-Runners.
The implementation of China’s Energy Efficiency Top-Runner Program covers three areas: high
energy-consuming industries, public institutions, and end-use energy consuming products. The
three program areas have different scopes, different implementation methods, and different
responsible agencies. The implementation of these programs is proceeding with Top-Runners
being selected and publicized with plans for the program to expand year-by-year, although
some program design issues need to be addressed to increase participation. In addition, the
government proposed to develop incentives for rewarding Top-Runners, but there are no
substantial financial incentives for the Top-Runners.
National Emissions Trading System
China’s long-awaited National Emissions Trading System has started, with only the power
sector participating in the first phase from 2017 to 2020 to build and test the various emission
trading components, but is behind schedule.
After five years of provincial-level emission trading pilots, China officially launched its
nationwide CO2 emissions trading scheme (ETS) in 2017, starting with the power sector. All
power plants emitting over 26,000 tons of CO2e per year are required to join the inaugural
phase of the program, which was originally envisioned to consist of a basic construction period
(2018), a market trial operation period (2019), and a period to carry out spot trading of
emission allowances (2020) (Forbes, 2017; MEE, 2019a; NCSC, 2016; Xinhua Net, 2017c).
However, China is behind on this schedule and just now identifying and signing up the required
power plants, with no market trading to date although it is expected that the first trades will
happen in 2020.
Upon achieving stable operation, China’s ETS is expected to gradually expand to cover seven
industrial sub-sectors including petrochemicals, chemical engineering, construction materials,
iron and steel, non-ferrous metals, paper, and aviation with enriched trading varieties and
diversified trading methods (NDRC, 2016c).
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