Lower energy consumption intensity reflects China's commitment to green shift

BEIJING -- As part of its efforts to foster a greener and more sustainable economy, China, the world's largest energy producer and consumer, is rapidly reducing the intensity of its energy consumption.

In 2021, the country's energy intensity -- energy consumption per unit of gross domestic product (GDP) -- decreased by 2.7 percent from the previous year, and the decline came as the energy intensity fell by 28.7 percent from 2011 to 2020, one of the fastest reductions in the world.

From 2016 to 2020, China's average annual economic growth of 5.7 percent was fueled by a merely 2.8 percent annual increase in energy consumption, and the amount of energy it saved accounted for nearly half of the global energy savings during this period.

"The control over energy consumption intensity should focus on the industrial structure adjustment in high energy consumption areas and the technical transformation in relevant industries," said Wang Jinnan, head of the Chinese Academy of Environmental Planning under the Ministry of Ecology and Environment.

While thermal power still accounts for about 70 percent of China's power generation, the country is striving to reduce its dependence on coal to tackle pollution and climate change caused by fossil fuel combustion.

The country's energy consumption was under 5 billion tonnes of standard coal in 2020, while the proportion of coal consumption registered 56.8 percent, shrinking from 72.4 percent in 2005.

In Yulin, a coal-rich city in northwest China's Shaanxi Province, an energy plant has been exploring its own version of the green transition.

Shaanxi Yanchang Coal Yulin Energy and Chemical Co., Ltd., has invested 40 billion yuan to build a plant that utilizes both coal and natural gas for the production of methanol and other chemicals in an eco-friendly way.

For each tonne of methanol produced, the water consumption reduces by 70 percent, and the emissions of carbon dioxide, offscum and sulfur dioxide come down by 60.38 percent, 61 percent and 59 percent respectively.

Such procedures can greatly cut carbon emissions compared with the traditional method of only using coal, said Li Wei, general manager of the company.

Hu Zucai, deputy director of the National Development and Reform Commission, noted that the phasing out of traditional energy must be based on the safe and reliable replacement with new energy sources.

The installed capacity of renewable energy in China has exceeded 1 billion kilowatts, with that of hydropower, wind power, solar power and biomass power ranking first in the world. The share of clean energy rose from 14.5 percent to 25.5 percent in the country's energy consumption mix.

In Datong, China's Shanxi Province, one of the country's major coal-producing regions once plagued by severe haze, a photovoltaic power station now produces about 80 million kilowatt-hours of clean electricity each year.

"A total of 26,000 tonnes of coal can be saved and 68,500 tonnes of carbon dioxide emissions can now be slashed annually," said Sun Jingsong, head of the power station.

In the future, 450 million kilowatts of hydropower, wind power and solar power generation capacity will be developed in deserts, with the first batch of projects producing 85 million kilowatts of power having broken ground, Hu said.

China is moving toward another target in green transformation. By 2025, it plans to reduce the energy consumption per unit of GDP by 13.5 percent compared with the 2020 level in a bid to achieve the country's net-zero carbon goals by 2060.

To achieve the target, efforts should be made to remove institutional barriers and introduce innovative policy incentives, said Jing Chunmei, a researcher at China Center for International Economic Exchanges.

China's dedicated government support for green finance and the carbon market has helped boost energy efficiency, catalyzing the clean-energy transition.

The country has increased green-finance support and improved the top-level design of green finance, with nine pilot zones for the reform and innovation of green finance in six provincial-level administrative units set up.

At the end of 2021, the outstanding green credit amounted to 15.9 trillion yuan (about 2.36 trillion U.S. dollars).

China's national carbon market has seen a turnover of over 2 billion yuan since it launched online trading on July 16, 2021, and it is predicted to become more active after it is opened to financial institutions.