China Energy Outlook 2020 - Flipbook - Page 76
Currently, seven energy-intensive industrial sectors (such as ferroalloy, calcium carbide, and
caustic soda) have differential electricity pricing, where industrial facilities in these sectors pay
a higher electricity price. Three energy-intensive sectors - cement, steel, and electrolytic
aluminum - also have differential electricity pricing, where the plants with higher energy
intensity pay higher electricity prices.
The differential electricity pricing policy began in 2004 and has reportedly contributed to
industrial energy efficiency improvement in key sectors (e.g., cement). The government
believes that there is more potential savings to be gained from this policy by expanding its use
to more provinces and by encouraging local governments to customize it to fit their local
conditions, e.g., higher prices and covering more sectors (NDRC, 2018b).
This policy, however, has experienced a number of issues during implementation, such as
differences in enforcement across provinces that leads to potential unfair treatment across
industries, lack of timely updates on the policies to reflect the latest development in efficiency
improvement and technologies upgrades, and varying enforcement of the policy by province
which leads to missed energy-savings opportunities.
Boiler Action Plan
China’s 2014 national Boiler Action Plan was strengthened in 2018 by banning construction
of small and medium coal-fired boilers nationwide and establishing more stringent emissions
standards for boilers in selected key areas of China.
Boiler systems are one of the major sources of China’s greenhouse gas emissions, accounting
for 18% of the nation’s total coal consumption and 11% of China’s energy-related CO2 emissions
(NDRC, 2014b; Tong, 2018). The large number of small industrial boilers coupled with their
dispersed locations and distributions is a significant challenge for realization of China’s air
pollution prevention and control effort, as well as for China’s climate goals.
Since 2007, a number of policy documents have been issued to address China’s inefficient,
small industrial boilers, setting specific targets and requirements for reducing energy use and
pollution from coal-fired industrial boilers, and encouraging switching from coal to other energy
sources, such as natural gas and electricity. In 2018, the government banned the construction
of small and medium coal-fired industrial boilers. New-built boilers in these key areas must
meet “super-low” (i.e., super-stringent) air pollution standards while existing boilers in key
areas must meet national or more stringent local emission standards, through energy
conservation and emission retrofits (SAMR, 2018).
Voluntary Commitments Initiative
NDRC recently highlighted the good progress 15 of the 100 companies participating in the
Voluntary Commitments Initiative made toward reaching their respective energy use
reduction or energy intensity improvement commitments.
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