China Sets Energy Consumption Cap That Researcher Deems `Loose'

China, the world’s second-largest economy, will seek to cap energy consumption at a maximum of 5 billion metric tons of standard coal equivalent by 2020, a ceiling that a researcher says should be easy to achieve.

The target represents a 16 percent increase from 4.3 billion tons in 2015, or growth of about 3.2 percent a year in the world’s largest consumer of energy. Use expanded 0.9 percent last year, slowing from a rise of 2.2 percent in 2014 and 5.9 percent in 2010. The ceiling was contained in the Five-Year Plan for 2016-2020 released at the annual legislative meeting in Beijing on Saturday.

President Xi Jinping has been pushing for more efficient energy use as part of efforts to protect the environment and cut air pollution. Energy consumption has slowed as the economy loses steam and shifts toward a growth model led by consumption and services rather than investment. The nation is seeking to cut its energy use as measured per unit of gross domestic product by more than 3.4 percent this year.

“The so-called cap is quite loose and should be no problem to achieve,” Lin Boqiang, director at the China Center for Energy Economics Research at Xiamen University, said by phone. “The government wants to leave some room in case energy usage rebounds in the following years.”

Coal consumption dropped 3.7 percent in 2015, declining for a second year and representing 64 percent of total energy use. The country plans to eliminate as much as 500 million tons of coal output by 2020 and consolidate a further 500 million tons of capacity among fewer miners as the world’s largest producer seeks to ease a capacity glut in everything from coal to steel and cement.

To contact Bloomberg News staff for this story: Jing Yang in Shanghai at jyang251@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, James Poole, Nicholas Wadhams

By: Bloomberg News

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