China's Coal Use Soars

The government falls short of efficiency targets.
An analysis by Michael Lelyveld
china-coal-305.jpg Coal is transported through the Liangyugang port in eastern China's Jiangsu province, Jan. 15, 2012.

China improved energy efficiency slightly last year, but the government failed to meet conservation goals as the economy outweighed environmental concerns.

On Feb. 22, the National Bureau of Statistics (NBS) announced that China's total energy use rose 7 percent in 2011, setting the fastest pace in four years, Bloomberg News said.

With China's gross domestic product (GDP) growth last year at 9.2 percent, the NBS estimated that energy use per unit of GDP declined 2 percent, far less than the government's planned 3.5-percent target.

Energy use per unit of GDP - the closely watched "energy intensity" index - is seen as a measure of China's commitment to cut waste and control carbon emissions as the economy expands. GDP is the main measure of a country's economic activity and growth.

But with GDP-linked energy savings in China at only half of the 4-percent rate in 2010, conservation seems to have taken a backseat to economic considerations.

"The big issue is the attempt to sustain economic growth," said Mikkal Herberg, energy security research director at the Seattle-based National Bureau of Asian Research.

On Monday, the National Development and Reform Commission (NDRC) director Zhang Ping conceded failures on energy and the environment at a National People's Congress briefing.

"There are a lot of complicated reasons for failing to meet the targets," Zhang said, according to Reuters. "The biggest is that we have not transformed our economic development model."

China also missed targets for pollutants including carbon dioxide and nitrogen oxides. But Zhang vowed China would improve performance to meet five-year goals, Bloomberg said.

Five-Year Plan

The government's last big drive to boost efficiency ended in 2010 as officials struggled to meet targets under the 11th Five-Year Plan.

Premier Wen Jiabao had pledged to trim energy waste by 20 percent compared with 2005, but the effort led to arbitrary power cuts in many provinces, prompting an apology from the NDRC.

In the end, the government came close but missed its target with a 19.1-percent drop in energy intensity for the five-year period.

With the start of the 12th Five-Year Plan, the authorities set a less ambitious goal of cutting 16 percent of energy waste by 2015, but the 2011 results suggest the campaign is off to a slow start.

Herberg said the beginning of the new five-year cycle may have led the government to ease up in its efforts, hoping to make up ground later on.

"There's always this process," he told RFA. "As the deadline approaches, you begin to focus more intently on it."

Economic concerns

But economic growth goals have been a recurring problem under both five-year plans. China's huge 4-trillion yuan ($634-billion) stimulus program saved the economy from the global slump in 2009-2010, but it made conservation targets impossible to meet.

Now, Europe's debt crisis has dimmed China's trade hopes and spurred calls for monetary easing to buoy the economy again.

"They're very worried about the hard landing issue," Herberg said.

On Monday, Premier Wen told the National People's Congress that the government had set a GDP growth target of 7.5 percent for 2012, which would slow the pace to an eight-year low.

The government has been cautious about cracking down on energy use in tougher economic times, leading to lackluster results.

Last year, China's coal consumption climbed 9.7 percent to a record 3.7 billion tons, according to the NBS and Shanghai Securities News.

China now burns well over three times as much coal as the second-place United States, choking its cities with pollution and smog. But power supplies are always "at the margin" of capacity, said Herberg, making the government reluctant to curb coal output, which fuels over 70 percent of China's electricity.

Officials have also been wary about raising electricity rates to discourage waste when inflation and social pressures are riding high.

"Demand continues to rise because prices continue to be held too low," Herberg said. "That puts more pressure on the demand side and the default means more coal."

On Feb. 28, an NDRC official said the government plans to deal with the pricing problem this year but will wait until inflation cools, the official Xinhua News Agency reported.

"We will reform the pricing scheme and launch it according to economic operation to minimize its overall effect," said Zhou Wangjun, deputy director of the NDRC's price department.


The NBS seems to have shown sensitivity to the missed target by releasing the growth rate for coal use without publishing the tonnage, which was reported separately by Shanghai Securities News.

Coal consumption figures are rarely publicized by the official press, although the China National Coal Association estimated in September that usage reached 1.84 billion tons in the first half, putting it on track for a record.

Coal production reports have also become spotty.

The NBS stopped issuing monthly coal figures after March 2010, said Derek Scissors, research fellow for Asian economics at the Washington-based Heritage Foundation. Last year, unnamed "industry observers" linked the lapse to the rise in China's coal imports, the Interfax news agency said.

Despite its enormous domestic output, China became a net coal importer in 2009. Imports climbed to 145 million tons in 2010 and rose again last year to 170 million tons, according to Shanghai Securities News.

As with many Chinese statistics, great uncertainty exists about the accuracy of the data.

In a paper for Stanford University last July, China energy and environment expert Kevin Jianjun Tu of the Carnegie Center for International Peace said the sum of coal consumption figures from China's provinces has
frequently exceeded national estimates by over 500 million tons for the past decade.

The discrepancy raises the possibility that China's annual coal consumption may already have topped an astonishing 4 billion tons, which may account for the NBS reporting gap.

In a major policy study released on Feb. 27, the World Bank and the Development Research Center of China's State Council said the country's coal consumption will keep rising through 2030 if left unchecked.

But a modest tax on carbon emissions would cause coal use to peak before 2020 and decline after that, the joint study said.


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