The “iCET News Express” section provides updates on the progress of some of our exciting programs. We hope you enjoy these updates in addition to the regular news briefing we offer.

iCET visited partners in Northern California.

Feb.16th – Feb.19th, 2010, Dr. Feng An and Dr. Yufu Cheng took a four days trip to Northern California for meeting partners and discussing potential collaborations. Organizations that were visited include Hewlett Foundation, Hewlett-Packard Company, Electric Power Research Institute (EPRI), Terra Global Capital, Energy Foundation, Pacific Gas and Electric Company (PG&E), ClimateWorks Foundation, International Council on Clean Transportation (ICCT), California Energy Commission (CEC), and The Institute of Transportation Studies at UC Davis (ITS-Davis). Dr. Feng An and Dr. Yufu Cheng introduced iCET’s current project status, and discussed issues with partners on work areas as well as potential collaborations. Particularly, Walter Reichert, Director of International Trade Development of Hewlett-Packard showed strong interests in iCET’s Energy and Climate Registry and suggested the HP-China to get involved in this project. Mark Duvall and Mark Aelxandra at EPRI have expressed willingness to joint efforts with iCET in China to work on electric vehicle power grid impact analysis. Dr. Feng An and Dr. Yufu Cheng also met the newly appointed CEC commissioner Anthony Eggert and his advisor Dr. David G. Hungerford to update them various iCET projects.

^{General Energy
Issues}

China draws up plans for national renewable energy center

February 10 (China Daily) - China plans to build a national renewable energy center to further support development of the industry, an energy official said yesterday.

The center will be responsible for policy-making, key project and program management, market and industrial operations, database and information platform establishment and international exchange program coordination, Han Wenke, director general of Energy Research Institute under the National Development and Reform Commission, said yesterday.

The establishment of the center is still in the preliminary planning stages, Han said at the launch of the Sino-Danish Renewable Energy Development Program.

The Danish government will invest 100 million Danish krone (130 million yuan) in the program, which is slated to last until 2013.

The combination of Denmark's sector experience and China's strong economic position offer a good starting point for the program.

"The project is set to combine the advantages of the two countries and promote renewable energy development fast and well in China," said Danish Minister of Climate Change and Energy Lykke Friis.

Some Danish companies have already made large financial commitments to China. Vestas, a world leader in wind power equipment manufacturing said last year its investment in China would exceed 3 billion yuan by the end of 2009. The company's rapid growth in the country is in line with the strong growth of China's wind energy sector, according to the company.

China made great progress in renewable energy growth last year. It accounted for 7.5 percent of the country's primary energy consumption in 2009 - or the equivalent of 230 million tons of coal, said Liu Qi, vice-director of the National Energy Administration.

"No matter what happens with international climate change negotiations, reducing fossil fuel consumption and developing renewable energy will be the best way to ensure a secure energy supply," said Liu.

"The target of reducing carbon intensity by 40 to 45 percent in 2020, based on 2005 emissions, will depend more on the development of renewable energy," he said.

China has become the third largest producer of wind power in the world and is responsible for around 40 percent of the output of the world's solar photovoltaics.

Photovoltaics or PVs are arrays of cells containing a solar photovoltaic material that converts solar radiation into electricity.

Renewable energy is helping China complete its economic transformation and achieve energy security, said analysts.

http://www.chinadaily.com.cn/bizchina/2010-02/10/content_9456628.htm

China issues rules on maritime wind energy projects

February 10 (Xinhua) - China has issued regulations on the development and construction of offshore wind power projects in a bid to promote reasonable use of sea space and resources and better protect oceanic environment.

The regulations, jointly issued by the National Energy Administration and the State Oceanic Administration (SOA), include 38 articles in ten chapters, according to a statement released Tuesday by the SOA.

The rules specify procedures and requirements for the planning of offshore wind energy developments, the authorization of such projects, the application and approval of the use of sea space, and construction verification, among others.

The rules stress that projects should be based on the principles of planning before major construction starts.

According to the regulations, energy departments at provincial level will be responsible for drawing up plans for local offshore wind energy development, while oceanic departments at the same level should provide initial opinions on the plans regarding the projects' impact on the ocean environment.

Such projects should be conducted according to reasonable distribution and sparing use of sea areas, the rules said.

In addition, projects may only be started after being verified by authorities and the obtaining of rights for the use of the sea space.

When it comes to uninhabited islands, projects should also receive certificates of island use, according to the procedures set out by the law of island protection.

The rules also require project principals to report on project's environmental impact with submissions to the oceanic administrative department.

http://www.china.org.cn/environment/2010-02/10/content_19402554.htm

China's shining light in the energy challenge

February 22 (China Daily) - XINYU: Entrepreneur believes 60 percent of the world's power will come from the sun 100 years from now.

Peng Xiaofeng is not one to be deterred from his personal mission by the heavy rain pouring down outside his office.

It might be a dreary day in Xinyu but the 34-year-old insists solar energy will provide 60 percent of the world's energy supply in 100 years.

The modest and quietly spoken chairman and chief executive officer of LDK Solar, one of China's leading solar energy companies, insists sun power will eclipse coal, gas and oil in the 22nd century.

One of China's leading young entrepreneurs and listed by Forbes magazine as one of the 500 richest men in the world, he believes people consistently underrate this natural form of new energy.

China's solar power usage currently barely registers above zero as a percentage of total energy sources.

"In 100 years, my view is that 60 percent of the world's energy will come from solar power," he said.

"This is not an optimistic prediction. The European PhotoVoltaic Industry Association (one of the solar energy industry's main trade bodies) puts the figure at 80 percent."

Because of their current marginal status, it is all too easy to dismiss new energy sources as something of a sideshow to ease climate change fears.

Renewable energy target

The Chinese government, however, wants 20 percent of the country's power to be from renewable energy (of which hydro will be a major part) by 2020.

Peng insists people fail to realize existing energy sources, oil in particular, are going to run out.

"Oil, maybe, has 50 years, I don't know. That is because it is not very renewable. It is also going to get more expensive. Even with the background of a financial crisis like now, its price has gone back up to $81 a barrel," he said.

LDK has had something of a torrid time itself recently. Its shares on the New York Stock Exchange initially soared to nearly $70 from their initial flotation price of $27 in 2007 but have since slumped to just a tenth of their peak value at around $7.

With Peng owning around 70 percent of the equity of the company, this has put a considerable dent in his personal fortune, although he still retains major private interests.

In December, the company went back to the NYSE and has raised a further $122 million, using around $90 million of the proceeds to pay back short-term debt as well as develop other aspects of the business.

"The economic crisis has affected everybody and, in particular, solar energy. Many projects have been delayed, mainly because of the problems in getting bank finance," he said.

"The main reason we were impacted was that the decreased price of raw materials brought down the price of silicon products. So, although our sales volume was still increasing, revenues were lower because of the lower unit price."

He points out, however, despite stock market nerves the company is still the world's largest maker of solar wafers and has increased its global market share from 11 percent in 2008 to 18 percent now.

"The company's market share is increasing, our cost leadership is getting stronger and we are placing a great deal of emphasis on technological innovation this year," he said.

You have only got to drive around Xinyu to see how much depends on Peng's efforts.

The city in Jiangxi province is now known as 'Solar Power City'.

Around 80 percent of LDK's 14,000 employees are from the city itself. The presence of LDK has also generated a cluster of other companies from processing raw materials to all other aspects of solar power engineering.

LDK has also established schools to train people to work in the solar power industry and it has also contributed towards the city's infrastructure, including helping fund the main Saiwei Road.

Peng is aware of the important role LDK plays in both local society and the economy. Like many of China's entrepreneurs he sees himself as part philanthropist.

"This is a very small city and we bring a lot of jobs to it. It is my home province and the local government is also very supportive of the solar energy industry," he said.

Peng, who likes to be referred to by his nickname "Light", comes from a rural area of Jiangxi province and is the son of a local doctor.

At school he was interested in science, particularly physics, prescient for his future involvement in new energy.

"When I was at school I was always reading books about light, which is where I got the nickname from," he said.

"My dream was to study physics in the United States. At the time the role model for a lot of young people in China was (Thomas) Edison (the American inventor of the light bulb)."

To achieve his dream, however, he needed to learn English and the only place he could study was at Jiangxi College of Foreign Studies in Nanchang, where he read for for a diploma in international trade.

"There were not many places to learn English and I chose to do this diploma," he said.

While many students often seek such courses as a means to an end, Peng took the qualification literally and on graduating decided to set up his own international trading company with just 20,000 yuan ($2,928) of savings.

In 1997, with China products now in demand throughout the world his timing to start a business couldn't have been better.

His company, Suzhou Liouxin Industrial Group, began to locally manufacture and sell protective products such as safety gloves, jackets and shoes.

"I set up the company by renting an office and buying a fax machine and just learning about international business and how to sell China products overseas. At the time it was very profitable to sell China products."

The business was a spectacular success, soon hitting sales of $7 million and within a few years $200 million.

Instead of having a rented office and a fax machine, he now had a staggering 10,000 employees. He was wealthy.

For many people this would have been enough but Peng felt low-tech manufacturing was somewhat limiting.

He had completed an MBA at the Guanghua School of Management at Peking University on an entrepreneurs program, which had widened his ideas about business.

"It helped me see the bigger picture. It gave me more knowledge about finance, about marketing and about strategy. You also get to know more people from fellow students to professors and so you can bounce ideas off people," he said.

Then came the idea to move into solar power, which was inspired by a trip to Europe.

"I used to travel a lot in Europe at the time and there was a lot of interest in green energy, particularly in Germany. I realized this was a business for the future and a big opportunity to start a business in China," he said.

He spotted there was a shortage in China of companies producing multi-crystalline wafers, the light sensitive tiles which capture light and turn it into usable energy.

"There was a big shortage in the wafer market and at that time wafers were about 70 percent of the cost of producing solar energy," he said.

Private equity investment

He decided to invest $30 million of his own money to launch the business in 2005.

He then had three rounds of private equity investment injecting a further $100 million. The business also had support from the local government.

"It was doing the MBA which taught me about raising capital, whereas my previous business very much generated its own capital," he said.

Two years after starting the business it was floated on the New York Stock Exchange.

"We first targeted a listing on NASDAQ but the NYSE came to us and we were qualified to list on the exchange. We thought strict US company governance would give investors confidence in the business and would be good for long term growth," he said.

"A lot of our investors are now from around the world, from the UK, Frankfurt, Switzerland and Japan."

Having a listing overseas has given Peng a high profile and he is regularly written up as one of China's young billionaires.

Apart from the Forbes listing last year which recorded him as the 462nd richest person on the planet, estimating his personal fortune at $2.5 billion, he has also come to the attention of Fortune magazine.

It listed him as 23rd of 40 of the "hottest business stars" under the age of 40 in the world.

In the same list, Facebook founder Mark Zuckerberg was second, News Corporation's James Murdoch was third and golfer Tiger Woods, before recent tribulations in his life, was placed sixth.

Peng does not think he is part of some new homegrown Chinese business talent that is going to take over the world any time soon.

"If you look at the young entrepreneurs on that list, only two are from China. Most of them are from Russia, the United States and elsewhere. I think people of the younger generation have a similar chance from anywhere," he said.

He acknowledges, however, that the opportunities for young entrepreneurs in China have never been greater.

"We are very lucky in this generation, especially, say, compared with the opportunities my parents had. We have greater access to education, the chance to meet people in Europe, the US and internationally. You also have the benefits of globalization, access to foreign capital and to buy equipment and bring in expertise from such countries as the US, Germany and Japan," he said.

China is now one of the major world centers for solar power.

Apart from LDK, Suntech, based in Wuxi city in Jiangsu province, is a leading player, as is GLC-Poly, which is also based in Jiangsu province.

The future of solar power is still dogged by questions about its cost. Oil, depending on its current price, costs around 5 cents to produce a kilowatt hour (KWh) of energy, coal between 4.8 and 5.5 cents and gas between 3.9 and 4.4 cents, whereas solar power can cost as much as 30 cents per kilowatt hour.

Peng says the cost is being driven down all the time as the technology improves.

"If you go back 50 years it used to cost about $500 per KWh. In China now it is already down to 20 cents," he said.

Still only in his mid-30s, Peng has every intention of being around when the age of solar power finally dawns.

"I want to focus on the solar power industry continuously into the future since the industry is large and emerging. I am sure the sorlar power will be one of the leading future technologies," he said.

http://www.chinadaily.com.cn/bizchina/2010-02/22/content_9483880.htm

China's wind energy industry sees challenges

February 22 (China Daily) - Number of producers has increased from six in 2004 to more than 70 today.

Businessman Xu Zhichun's plans were thrown up in the air when demand for the wind turbine blades his company made suddenly crashed.

The vice-general manager of Tianjin Dongqi Wind Turbine Blade Engineering Co discovered few any longer wanted the 37.5-meter blades that were popular two or three years ago.

"We were caught unprepared," said Xu. "The blades do not work as well as we thought, and we had to step up production of longer blades."

Now the company makes blades that are 40.3 meters long and production rates have been increased to meet demand. "We produced one blade in 36 hours in the past but now we have to make one per day," said an employee in the workshop.

Tianjin Dongqi is a unit under Dongfang Electric Corp (DEC), a major State-owned power equipment manufacturing company. The company is one among many blade-making enterprises, which invested a lot in the 37.5-meter blades but are now faced with a change in demand.

The problem can be traced back to 2007 and 2008 when companies rushed into the wind power industry.

"Many companies didn't have a deep understanding of wind power at that time," said Xu. "And the government, although it drew up favorable policies, didn't come out with a clear plan for the industry."

There were only six wind turbine makers in 2004 across the country. That number increased by more than 10 times to more than 70 last year. Similarly, installed wind power capacity was 760 megawatts (MW) by the end of 2004, and it surged to over 20,000 MW in 2009, making China the third largest wind power market in the world.

Inadequate research and lack of planning has led the industry to expand dramatically but at the expense of quality. Take turbine blades for example. About 70 percent of the blades in the market are 37.5 meters, which are not long enough to generate anticipated electricity levels, according to Xu.

"This echoes what most people call overcapacity," he said. "It's actually excess capacity of products that don't fit the market well."

Radical expansion has brought another problem: makers of both turbines and parts have seen their profits slump in recent years.

"It's like taking a roller coaster: We are falling all the way from the top to the bottom," said Xu.

Prices of turbine blades have decreased by about one third compared with those in 2004. Profit margins in some companies were 25 to 30 percent in 2004, but now the figures are just about 10 percent, said an industry insider.

"We are not losing money, but not making much profit, either," said Liang Xiaobing, deputy- general manager of Dongfang Electric (Tianjin) Wind Power Technology Co, a turbine-making unit under DEC.

For a 1.5-MW wind power turbine, the price for every kilowatt was around 6,000 yuan at the beginning of 2009, but now it has declined to below 5,000 yuan, said Liang. The decrease in price in the wind power industry is partly due to the fact that some companies, especially small ones, sell their products cheaply at the expense of quality, said some insiders.

Technology upgrade

Some leading Chinese equipment makers that have gained an edge in the market are now stepping up efforts to improve the technology in order to fend off the effects of radical expansion in the wind power industry.

Sinovel Wind Group Co, which has the largest share in the domestic wind power equipment market, is one of them. The company is now building a national offshore wind power technology and equipment research and development (R&D) center, which was approved by the National Energy Administration in January.

The center will conduct studies into technical difficulties challenging offshore wind power development in China. Sinovel aims to develop the center into a world leader.

Sinovel started construction of a manufacturing base for its 5-MW wind turbine in Yancheng city in Jiangsu province in January. The project, with a total investment of 1.5 billion yuan, is expected to come on stream at the end of this year. It will involve the production of 5-MW offshore and near-shore wind turbines.

"Improvement in technology is vital to our future," said Han Junliang, president of Sinovel. "The Chinese wind power industry is in urgent need of advanced technology."

At present among the 70 domestic wind power equipment producers, less than 10 have a large-scale R&D capacity. These companies will form the mainstream of the domestic wind power industry, according to Han.

"As for Sinovel, we aim to become among the world's top three in three years," said Han. Last year the company produced 2,400 1.5-MW turbines and 100 3-MW turbines, making it top in terms of output in China.

"I think the so-called overcapacity just refers to those small players with outdated technology. There will be more consolidation in the domestic wind power sector," he said.

Echoing Han's views, Wu Gang, chairman of Goldwind Science & Technology Ltd, another top wind turbine manufacturer in China, said his company would consider acquiring small firms when the industry enters a consolidation phase.

The company is also looking at markets in the US, Australia, Central Europe and Africa, either by investing in local wind farms or by selling products, said Wu.

"We expect overseas markets to account for 20 to 30 percent of our business over the next three to five years," he said. Goldwind is also focusing more on developing larger wind turbines, including 3- and 5-MW wind turbines, he added

Today Chinese wind turbine producers account for around 70 percent of the domestic market. Some foreign companies are now offering more tailor-made technology to the market in order to achieve further success.

Vestas, the world's leading wind energy company, unveiled a new turbine tailored for the Chinese market, the V60-850 kilowatt turbine, last year. It received its first order for the product from China Datang Renewable Power Co last December.

"China is a unique country with great variations in geography and weather conditions," said Jens Tommerup, president of Vestas China.

"This is why we developed a wind turbine which can deal with such challenges. The fact that Datang has chosen the V60-850 kilowatt shows the need for reliable and proven technology to ensure maximum productivity and a scientific approach to harness the most value out of the wind."

China recently dropped a rule stipulating that more than 70 percent of the wind turbines used in the country must be made domestically. Analysts said the move would trigger more competition in the industry.

The move would help the development of the country's wind power industry and establish an open market of rational competition, Chine Business News said in a report, citing a statement sent to local governments by the National Development and Reform Commission, the country's top economic planning agency.

The move will result in fiercer competition between Chinese and foreign companies, but it will also boost cooperation between them, said an analyst who declined to be named.

"This is not a major issue for Vestas," said Andrew Hilton, spokesman for the Danish company in China. "Our global strategy is to produce where we sell, so this development will not have an impact on our production of wind turbines in China."

"Our goal has always been to localize our production as much as possible. The turbines made in our Chinese factories currently consist of more than 80 per cent local content and our goal is to increase this."

http://www.chinadaily.com.cn/china/2010-02/22/content_9481836.htm

'Clean' coal power to go online next year

February 24 (China Daily) - China's first self-developed integrated gasification combined cycle (IGCC) power station is scheduled to go online in Tianjin next year, joining an elite group of such efficient power plants in the world.

Construction on the 2.1 billion yuan facility began last July. When completed, it will be among the most efficient coal-fired power stations globally, with a more than 99 percent rate of desulfurization and much lower emissions of carbon dioxide and nitrogen oxide.

"Compared with an ordinary 300,000 kWh coal-fired power plant, the model IGCC power station with 250,000 kWh capacity reduces coal consumption by 70,000 tons annually, and its carbon dioxide emissions will be just one-tenth of a standard plant," said Wu Ruosi, deputy general manager of China Huaneng Group, which initiated the project.

IGCC technology greatly increases generating efficiency with close to zero pollutant emissions, Wu said.

Seen as the world's most green coal-fired power generation technology, IGCC extracts the maximum energy from fuel by using both gas and steam.

There are currently only 10 IGCC power stations of the same scale globally. Most of them in Europe and the United States.

Wang Yanjun, deputy director of Huaneng Group, said that the green technology will not only be applied to new power plants but also can help nearly 60 domestic existing gas-fired power plants.

The Tianjin IGCC project is a major part of the Green Coal Power Program initiated by Huaneng Group in 2004.

Huaneng Group, in cooperation with other seven large State-owned enterprises involved in power generation, coal resources and investment, jointly founded a company to implement the program.

With leading-edge proprietary technologies, the program is aimed at popularizing clean coal solutions nationwide.

While collecting and treating carbon dioxide, the frontier technologies highlight coal gasification for generating hydrogen, hydrogen gas turbine combined cycle power generation and fuel cell power generation.

The key technologies of the program are listed in national plans for medium and long-term development of science and technology.

One of the key IGCC technologies, use of pulverized dry coal for gasification under pressure, was independently developed by Xi'an Thermal Power Research Institute, whose holding company is Huaneng Group.

In addition to use in domestic coal projects, the proprietary technology has already entered the international market.

The institute signed a coal gasification technology licensing agreement on a 150 mW IGCC project in Pennsylvania with US Future Fuels Co in July 2009, a first for China's self-developed IGCC technology.

http://www.chinadaily.com.cn/cndy/2010-02/24/content_9492520.htm

China runs first sugarcane-leaf power plant

February 28 (Xinhua) NANNING: China's first power plant using sugarcane leaves has been put into operation in south China's Guangxi Zhuang Autonomous Region.

The factory, annually using 200,000 tonnes of agricultural wastes including sugarcane leaves and tree barks to generate electricity every year, started production in Liucheng County Friday.

The station has an annual capacity of 180 million kilowatt hours and can cut the emission of 100,000 tonnes of carbon dioxide, 600 tonnes of sulfur dioxide, and 400 tonnes of dust compared to coal-fired power plants with the same efficiency.

Farmers had been burning straw and sugarcane leaves in the field, causing severe air pollution and causing 70 percent of fire accidents in the county, said Wu Jiguang, the plant manager.

The plant purchases sugarcane leaf from farmers at a price of 120 Yuan per tonne, Wu said.

Guangxi has eight million tonnes of usable sugarcane leaves every year, which can provide materials for about 38 such plants, he said.

http://www.chinadaily.com.cn/china/2010-02/28/content_9514512.htm

Solar thermal plant will serve as a model for future enterprises

February 22 (China Daily) - NEW YORK: Powered by technologies from the United States and manufacturing capacity in China, a solar thermal plant with an installed capacity of 2,000 megawatts (MW) will be up and running soon in northern China.

The first of its type in China, the project also has the potential to serve as a role model for future solar plants in China with its new and cost-effective technologies.

The first 92 MW of the plant, which combines both solar and biomass energy, will be completed by the end of 2011.

The rest will be finished by 2020.

Unlike photovoltaics that convert solar energy directly into electricity, solar thermal plants generate power from operating turbines that are driven by the vaporization of water by solar energy collected through mirrors and lenses.

By integrating biomass energy, the US-China project will be able to generate electricity 24 hours a day, according to Raed Sherif, vice-president of international market development with eSolar, a company based in Pasadena, California, that has agreed to provide core technology and expertise to the plant.

"What we came up with was a way that could really bring down the cost," Sherif said. "It focuses on fundamental cost reduction, such as design and construction, so it (solar energy) can compete with other clean energies without government subsidies."

He said that eSolar was able to offer a modular design with higher efficiency to help lower the cost by about half of other solar thermal plants.

The Chinese partner, Shandong Penglai Electrical Power Equipment Manufacturing Co, will manufacture the majority of eSolar's equipment and manage the construction of the plant.

The company and eSolar will share the intellectual rights to "any new innovations developed while we work together", according to Eric Wang, senior vice-president of international business development at Penglai Electric.

Wang said that in addition to eSolar's unique design, China's manufacturing strength can also help reduce the installation and solar field equipment costs, which usually are the two largest expenditures for building a solar power plant.

Sherif believes this solar thermal plus biomass technology will be the future for solar energy's development worldwide.

Moreover, Sherif envisages that cooperation between Western technology companies and Chinese manufacturing companies could also help companies reduce costs with what technology can furnish.

Both Sherif and Wang think that China is on the trajectory of being one of the world's leaders in solar power.

Not only has the government set a goal of increasing renewable energy by 15 percent by 2020, but it has a huge demand for energy and has been a big exporter of solar power equipment.

http://www.chinadaily.com.cn/bizchina/2010-02/22/content_9482883.htm

^{Automobile and
Transportation}

New policy to encourage China's carmaker consolidation

February 22 (Xinhua) – BEIJING: The Chinese central government plans to implement a new policy in the first half of this year to encourage auto industry consolidation and further the development of Chinese-brand passenger vehicles, an official from the Ministry of Industry and Information Technology said at a recent news conference.

According to sources with knowledge of the new policy, it intends that Chinese-brand passenger vehicles will comprise at least half of vehicle sales by 2015 and sedans made by entirely domestic automakers will have about 40 percent of the nation's car market.

Statistics from the China Association of Automobile Manufacturers (CAAM) show that 4.58 million Chinese-brand passenger vehicles were sold last year, some 44.3 percent of the total.

Sales of domestic sedans hit 2.22 million units, almost 30 percent of the segment.

The new policy will also focus on accelerating consolidation between automakers and could lead to a new round of reshuffling, industry insiders said.

China became the world's largest auto producer and market last year with both production and sales surpassing 13.5 million vehicles due in part to government incentives.

There are now more than 130 carmakers across the country, but most of them are small enterprises with annual production and sales of fewer than 10,000 units.

Only five had sales of more than 1 million units last year as the country's top 10 carmakers moved a total of 11.89 million vehicles to account for 87 percent of overall sales, according to market data.

Consolidation moves

Last year, Chang'an Motor Corp acquired two minivan makers - Hafei and Changhe - as well as engine producer Dong'an Auto from the Aviation Industry Corp of China (AVIC), marking the biggest asset deal ever between State-owned auto companies.

Chang'an is the fourth-largest motor group in China and the local partner of US carmaker Ford Motor and Japan's Mazda and Suzuki. After the acquisition, Chang'an's 2009 sales were only 30,000 units behind Dongfeng, the country's third-largest motor group.

Guangzhou Automobile Group Corp, the country's sixth-biggest automaker, bought a 29 percent stake of Shanghai-listed SUV maker Changfeng Motor Co Ltd for 1 billion yuan in May last year.

Beijing Automobile Industry Holding Corp, China's fifth-largest carmaker, reportedly finalized a deal last month to buy a 40 percent stake in Daimler AG's van joint venture with Fujian Motor Industry Corp.

By 2012 policymakers hope consolidation will result in two to three large-scale auto groups, each with annual production capacity surpassing 2 million units, and four to five companies with annual output of more than 1 million vehicles, according to the national auto industry revitalization plan released in March last year.

The current top-four Chinese motor groups are SAIC Motor Corp, FAW Group, Dongfeng Motor and Chang'an Motor. Carmakers including Beijing Automobile, Guangzhou Automobile, Chery, Geely and Sinotruk form the second tier in the country's auto industry.

Going global

Li Yizhong, minister of Industry and Information Technology, said recently that in addition to fueling industry consolidation, the government will also implement measures to encourage domestic automakers in reaching overseas this year through investment, acquisition of foreign brands, building research and development facilities and developing sales networks.

Industry sources said that the new policy calls for 20 percent of overall sales by major auto groups to be generated overseas in the next few years.

In the wake of the financial crisis, China's vehicle exports fell sharply by 45.7 percent to 369,600 units last year, according to statistics from the General Administration of Customs. Industry analysts generally expect a rebound in car shipments this year as the foreign markets begin to recover.

Despite the poor export performance, Chinese companies were aggressive in acquiring overseas assets in 2009.

Homegrown carmaker Geely's bid for Swedish luxury brand Volvo received a lot of media exposure in 2009. The Zhejiang-based company will reportedly close the deal soon.

Beijing Automotive bought some of Swedish carmaker Saab's core assets and technologies for $200 million last year.

Li noted that along with encouraging acquisitions and consolidation, the government will restrain overcapacity in the auto industry.

Li also said that the ministry will accelerate the development of new energy vehicles, including hybrid, pure electric and fuel battery models.

The new policy will reportedly stipulate that Chinese partners hold at least a 50 percent share in newly built Sino-foreign joint ventures that produce core parts for alternative-energy vehicles.

http://news.xinhuanet.com/english2010/china/2010-02/22/c_13182876.htm

China is now world champion in car production

February 3 (China Daily) - China has overtaken the United States and Japan to become the world's largest car manufacturing country in 2009, the China Business News reported today.

The Japan Association of Automobile Manufacturers (JAAM) said 7.93 million vehicles were produced in Japan in 2009, which was a 31.5-percent decline year-on-year. JAAM said that was caused by the recession, a decline in home consumption and falling exports.

Only 5.7 million vehicles were produced in the US last year. However, vehicle manufacturing in China came to 13.79 million units in 2009. This was the first time that China overtook the US and Japan to become the champion of car production in the past 20 years, the newspaper said.

According to the data released by the China Association of Automobile Manufacturers, 4.57 million vehicles were produced by self-owned brand companies, or 44 percent of the country's automobile sales volume in 2009. But car exports declined 46 percent year-on-year to 332,400.

http://www.chinadaily.com.cn/bizchina/2010-02/03/content_9420521.htm

China January Passenger-Car Sales Surge on Stimulus

February, 9 (Businessweek) BLOOMBERG - China’s passenger-car sales more than doubled in January after the government extended economic stimulus measures, helping boost demand for General Motors Co. minivans and Volkswagen AG sedans.

Sales of cars, multipurpose vehicles and sport-utility vehicles increased to 1.32 million units, the China Association of Automobile Manufacturers said today. Total vehicles sales, which include buses and trucks, more than doubled to a record 1.66 million units.

China extended subsidies for rural residents buying vehicles and increased funding for consumers trading in old models after similar measures last year helped the country surpass the U.S. as the world’s biggest auto market. Full-year sales this year may grow as much as 15 percent, said Ricon Xia, a Daiwa Institute of Research analyst.

“The government policies continue to show effects,” said Hong Kong-based Xia. “The numbers are better than expected.”

GM, the biggest overseas automaker in China, expects to sell about 2 million vehicles in China this year, a level it didn’t expect to reach for at least another two years, Kevin Wale, the company’s top executive in the country, said Jan. 24.

Government Incentives

The Chinese government last year halved the sales tax on new vehicles to 5 percent and offered 5 billion yuan ($732 million) in cash to replace old ones, insulating the country from slumping global demand. China announced plans on Dec.10 to scale back the measures, which included raising the tax on new vehicles with engines of 1.6 liters or smaller to 7.5 percent.

China’s vehicle sales rose 46 percent last year. Rising income in China is benefiting luxury carmakers such as Porsche SE, which expects the Asian nation to replace Germany as its second biggest market by 2012, Helmut Broeker, who heads Porsche’s China unit, said yesterday.

Denway Motors Ltd., the Hong Kong-listed affiliate of Guangzhou Automobile Group Co., rose 0.5 percent today after falling as much as 6.2 percent, ending three days of consecutive declines.

http://www.businessweek.com/news/2010-02-09/china-january-passenger-car-sales-surge-on-stimulus-update1-.html

First gas-electric hybrid buses put into use

February 2 (Xinhua) - CHANGCHUN: China's first 50 gas-electric hybrid buses were put into use Monday in Changchun, capital of northeastern Jilin province.

The 12-meter long CA6120 URH2 type hybrid buses can cut carbon emission by 30 percent, said Cui Shusen, president of Changchun Public Transport Group.

The buses were specially designed and manufactured for Changchun, a city with rich gas resources, by First Automobile Works Group (FAW), one of China's leading automaker, Cui added.

The city will soon launch another 50 gas-electric buses, Cui said.

http://www.chinadaily.com.cn/bizchina/2010-02/02/content_9415453.htm

CLP launches city's 1st EV quick charger

February 2 (China Daily) - HONG KONG: CLP has launched Hong Kong's first electric vehicle (EV) quick charger, which the firm believes will help to promote the wider adoption of the green EVs in the city.

Imported from Japan, the EV quick charger takes about 15 minutes to charge up an EV, which powers a car for 60 km. A 30-minute-charge will give it an 80 percent capacity and extend the range to 120 km, enough for a tour across the city.

Richard Lancaster, managing director of CLP, said yesterday that about 20 quick-charger stations are expected to be established all over the city. Each will be spaced less than 10 km from its nearest neighboring station to serve the EVs, especially in the event of a vehicle power shortage.

"The introduction of the EV quick charger represents a big step forward in the development of infrastructure in promoting the use of EVs in the city," said Lancaster.

Standard chargers for EVs are already available at some public or residential car parks, which require about 6 to 8 hours for a full charge. The quick chargers offer motorists a convenient alternative or backup when the car runs out of power.

CLP launched the first batch of public EV charging stations providing standard charging in town last November. Twenty-one stations are expected to be commissioned by the end of the year.

Lancaster hopes the introduction of the quick charger will increase the market appeal and practicality of EVs.

However, the current EV quick charger is compatible only with EVs manufactured by Mitsubishi, Nissan and Subaru, as well as future EVs that comply with CHAdeMO (Charge and Move) standards. Hong Kong's first home-grown electric vehicle to hit the international market, "mycar", which is priced at only HK$98,000, cannot utilize the quick charger.

The Hong Kong government has announced it will purchase 200 EVs by the end of this year, and the first batch of 30 EVs will arrive in Hong Kong shortly, of which CLP has purchased 10.

Since 1984, CLP has been bringing in EVs for business use. However, immature battery technology and high battery cost hindered the success of the green conveyance until late 2000, when advanced lithium-ion batteries became available for mass use - batteries that are able to provide long life and high power supply at a reasonable cost.

Separately, CLP also announced yesterday it has upped its shares in the Jiangbian Hydro Power Project in Jiulong County, Sichuan province, the largest single renewable energy project of the CLP Group.

CLP now owns a 65 percent stake in CLP Sichuan (Jiangbian) Power, after the blue chip company agreed to buy the 35 percent stake remaining for HK$72 million, to make the unit its wholly-owned entity after the deal, which is expected to be completed by April 30.

http://www.chinadaily.com.cn/hkedition/2010-02/02/content_9410757.htm

German company "betting" on China's electric car market

February 20 (People’s Daily) -"China will lead the development of electric cars, whose electric car market is bound to boost other countries' development in the field," said Portrait of Hanno D. Wentzler - President and CEO of Freudenberg Chemical Specialties, Regional Representative for China recently.

"In the future, China will remain the centre for electric car development. Freudenberg Group will integrate the experiences from its branches all over the world to develop battery saving technology," he said.

By the end of 2011, annual output of China's hybrid and pure electric vehicles would have hit 500,000, equivalent to twice that of U.S. output. Experts expect that by 2020, nearly 100,000 hybrid and pure electric cars will be put into operation in Shanghai alone. Chinese government will offer almost 10 billion yuan capital to support develop of new energy technology for domestic enterprises, and will launch pilot promotions on new energy vehicles in 13 cities including Beijing and Shanghai, which is mainly about testing the subsidy policy for new energy vehicles. By 2030, Chinese electric autos market capital will be in excess of 1.5 trillion yuan, expressed strategy and management consulting experts from McKinsey.

Efforts on mass-produced electric vehicles have reached an initial breakthrough. Last year, Mercedes-Benz's S400 vehicles with lithium battery entered into Chinese market.

http://english.people.com.cn/90001/90778/90861/6897023.html

Diesel Engines - A More Viable Green Solution for China's Auto Industry

February 1 (CRI) - China is eyeing diesel engines as a more viable green solution for its growing auto industry.

A new diesel engine plant has just debuted in North China in a bid to boost the production of diesel engine sedans in the country.

Hybrid cars, ethanol cars, cars that run on fuel cells and solar energy…As Chinese people become increasingly conscious of the environment, this kind of green industry jargon seems to dominate talk of the future prospects for green cars here.

But diesel engines, a highly developed and more fuel efficient solution that delivers quick results in auto emissions reductions is still an unknown in China. As of now, diesel engine sedans can hardly be found anywhere on the Chinese mainland.

To help change the situation, Hawtai Automobile International, based in Beijing, has just opened a sedan diesel engine plant in northern China's Inner Mongolia Autonomous Region that produces 300,000 diesel engines a year.

Xu Hengbing is president of Hawtai Automobile International.

"Under China's energy strategy and national goal to cut carbon dioxide emissions, I believe diesel engines for passenger cars will grow exponentially in China."

Xu Hengbing says scientific data shows a diesel engine consumes 26 percent less fuel than a conventional gasoline engine with the same capacity. And that means a car equipped with a diesel engine can cover 40 percent more distance than a gasoline engine car while burning the same amount of fuel.

Zhao Jingguang is deputy chief of the Foton Auto Company based in Beijing.

"It has become an irreversible trend for us to turn conventional fuels like gasoline and diesel into cleaner power sources. That's because a super majority of the sedans we produce run on conventional fuels, while new energy cars take up a tiny proportion."

But experts also point out that there's long been a shortage of diesel supplies in China. The country needs to increase diesel output if it wants to push for a robust development of diesel engine sedans in China.

http://english.cri.cn/7146/2010/02/01/2361s546949.htm

^{Climate Change}

Tackling climate change 'urgent,' Hu says

February 24 (China Daily) - China's highest leadership yesterday began considering proposals from the country's senior researchers in an attempt to help achieve the country's ambitious goal of cutting carbon intensity by 40 to 45 percent by 2020.

The move is a sign that China will roll out more economic and industrial policies to tackle climate change this year when drawing up the development roadmap for the 12th Five-Year Plan (2011-2015).

The political bureau of the CPC Central Committee has raised climate change as their study topic for the second time during the past two years. The leadership usually holds study meetings every one or two months.

At the study meeting in Beijing, President Hu Jintao said China is committed to fighting climate change, and the leadership will be working hard to mobilize efforts to realize the goal, which China came up with shortly before the Copenhagen summit.

Ever since Nov 26 last year, when China pledged to cut carbon intensity by 40 to 45 percent (from 2005 levels) before 2020, China's leaders, especially Premier Wen Jiabao, have been involved in intensive diplomatic efforts, including wide-ranging telephone talks with world leaders, to move forward the Copenhagen agenda.

However, some countries, including Britain, have accused China of obstructing December's Copenhagen climate summit, which ended with a non-binding accord that set a target of limiting global warming to a maximum 2 C, but was scant on details.

"We must fully recognize the importance, urgency and difficulty of dealing with climate change," Hu said in an address to other high-ranking leaders after listening to lectures by Pan Jiahua, senior researcher with Chinese Academy of Social Sciences, and Xu Huaqing, director of the Energy Research Institute affiliated with the National Development and Reform Commission.

"We must make it an important strategy for our socio-economic development," Hu said.

Energy saving, emissions cuts and environmental awareness must be inculcated into not only every government worker, but Chinese society as a whole, Hu said.

Active role praised

In another development, Danish Prime Minister Lars Loekke Rasmussen recently praised Wen Jiabao for his "important and constructive role" during the Copenhagen climate change summit last December.

In a letter to Wen, Rasmussen agreed with the premier's evaluation that the Copenhagen summit had delivered positive results, a Chinese Foreign Ministry spokesperson said yesterday.

The two leaders also agreed that the upcoming negotiations should be conducted under the United Nations framework. China officials said they hope the two countries will strengthen communication and dialogue in order to address climate change issues.

Rasmussen replied to Wen on Feb 12 after the Chinese Premier wrote separate letters to Rasmussen and UN Secretary-General Ban Ki-moon, informing them that China positively evaluates and supports the Copenhagen Accord, a political agreement achieved last December after 192 UN members met in the Danish capital.

In the letter, Wen pointed out that the Copenhagen Accord reflected the political will of all parties to actively tackle climate change, reaffirmed the principle of "common but differentiated responsibilities" and upheld the dual-track negotiating mechanism of the UN Framework Convention on Climate Change and its Kyoto Protocol.

The letter reaffirmed China's commitment to advancing international cooperation on tackling climate change and the direction for future negotiations.

Wen also said China will do its best to honor its commitments on climate change, including a reduction of carbon dioxide emission intensity per unit of GDP by 40 to 45 percent by 2020 against 2005 levels; increasing to 15 percent the use of non-fossil fuels in the country's total primary energy mix by 2020; and an increase of 40 million hectares of forest and 1.3 billion cubic meters of forest volume by 2020 from 2005 levels.

Wen also confirmed that China will continue to play an active and constructive role and work jointly with the international community for a meaningful conclusion of the Bali Roadmap negotiations at the Mexico Climate Talks, with the aim of achieving a comprehensive, effective and binding outcome that will reinforce the implementation of the convention and the protocol.

http://www.chinadaily.com.cn/bizchina/2010-02/24/content_9494986.htm

Future of climate talks again challenged - Experts

February 5 (Xinhua) - BEIJING: Chinese experts said the future of climate talks was again challenged by the inadequate targets submitted by developed countries to the United Nations Framework Convention on Climate Change (UNFCCC) for cutting their emissions of greenhouse gases.

Chen Ying, a researcher at the Research Center for Sustainable Development under the Chinese Academy of Social Sciences, said the targets were "far from enough," which reaffirmed difficulties facing future talks.

"But it was not surprising as the targets were mostly close to those promised during negotiations in Copenhagen," Chen told Xinhua Thursday.

The UNFCCC Secretariat announced Monday it had received the submissions of national pledges to cut and limit greenhouse gases by 2020 from 55 countries, which together account for 78 percent of global emissions from energy use.

The submissions were required by the Copenhagen Accord reached at the climate conference in December, which asked both developed and developing countries to indicate their support and targets for emissions cut before Jan 31.

Among the 35 industrialized countries that had submitted pledges, the United States promised to cut its emissions by 17 percent by 2020 on the 2005 base. The European Union, as a whole, promised to lower its emissions by 20 to 30 percent over the 1990 level.

China said it would endeavor to lower its carbon dioxide emissions per unit of gross domestic product (GDP) by 40 to 45 percent by 2020 compared with 2005.

Ding Zhongli, vice president of the Chinese Academy of Sciences, said the key to addressing divergences in climate talks is to ensure fair distribution of "emission rights."

Ding said the right to emit greenhouse gases equals the right to develop as emissions mainly come from consumption of energy and production of cement.

"Developed countries have accumulated large amounts of emissions on their way to today's development level," he said. "But many developing nations have not yet finished construction of basic infrastructure."

Therefore, Ding believed the most scientific allocation of emissions quota should be based on a country's per capita emissions throughout history.

He said China's per capita greenhouse gases emissions from 1900 to 2005 was only a third of the world's average, 10 percent that of developed countries and five percent that of the US.

"In more than a century from 1900 to 2005, the per capita emissions for developed countries were 7.54 times those of developing countries," Ding said.

As required by some international proposals, industrialized countries should gradually reduce their emissions levels from the current base and developing economies should only slow down their emissions.

Ding said despite the differentiated treatment, developed countries still had an advantage in terms of absolute amount of emissions due to their higher current bases.

If a target is set to limit the atmospheric density of carbon dioxide to, say, 450 parts per million (ppm) as proposed by the Intergovernmental Panel on Climate Change (IPCC), the world is left with only 800 billion tons of carbon dioxide to emit by 2050 and based on the IPCC's distribution method, the per capita emissions for developed countries from 2006 to 2050 would be 2.3 times those of developing nations, he said.

http://www.chinadaily.com.cn/bizchina/2010-02/05/content_9436565.htm

EU's Ashton to engage China on climate change

February 11 (Reuters) – BRUSSELS: The European Union's new foreign policy chief wants the EU to work more closely with China on climate issues and search for trade-offs with other policy areas, an EU official said on Thursday.

Catherine Ashton will brief a summit of EU leaders on Thursday about her policy vision in areas such as climate, trade and security.

"She won't be saying that we're flexible on everything, but she doesn't want climate change to be seen as an isolated issue," the official said on condition of anonymity.

Most EU leaders were disappointed by the outcome of United Nations climate talks in Copenhagen in December, which failed to set emissions reduction targets.

Some pointed the finger at China, the world's largest climate polluter, for missing an opportunity to break the deadlock.

"She'll say let's not fall into the trap of bashing China -- what is much more interesting now is to look much more strategically at how we can deal with China on those issues, look at what they want ... what is the room for maneuver."

An example of something China wants from Europe is "market economy status," which would help in trade talks.

"One thing that springs to mind is that the Chinese are important partners on issues like Iran and other issues," he added.

The Copenhagen talks ended with a weak accord, which puts the world on track for global temperature rises to around 3.5 degrees Celsius above pre-industrial levels, climatologists say.

Further U.N. discussions are planned for Bonn, Germany in May and for Mexico in November.

But recent setbacks to climate policy in the world's second-largest emitter, the United States, make international climate progress increasingly difficult. EU negotiators say they will make the most of 2010 by pushing bilateral talks.

Ashton also wants to propose a more coherent approach to other big economies such as Brazil, India and South Africa on issues including climate, the official said.

"Nobody has defined how we can build something that leads to results with countries like Brazil and South Africa," he said.

http://www.reuters.com/article/idUSTRE61A2YR20100211

China's fears of rich nation 'climate conspiracy' at Copenhagen revealed

February 11 (Guardian) - Xie Zhenhua at the UN talks in Copenhagen, December 2009. He said recently that 'rich nations were completely trying to make conflict among developing countries.' Photograph: KPA/Zuma/Rex Features

Rich nations furthered their "conspiracy to divide the developing world" at December's UN climate summit in Copenhagen, while Canada "connived" and the EU acted "to please the United States", according to an internal document from a Chinese government thinktank obtained by the Guardian.

The document, which was written in the immediate aftermath of Copenhagen but has only now come to light, provides the most candid insight yet into Chinese thinking on the fraught summit.

"It was unprecedented for a conference negotiating process to be so complicated, for the arguments to be so intense, for the disputes to be so wide and for progress to be so slow," notes the special report. "There was criticism and praise from all sides, but future negotiations will be more difficult."

The authors - all members of a government environmental research institute - were not part of the Chinese negotiating team, but their paper was commissioned by the environment ministry and circulated internally to the minister, vice-ministers and department chiefs in the days after the conference. The ministry currently plays only a marginal role in climate policy making but many of the paper's observations were echoed by China's chief climate negotiator, Xie Zhenhua, in a recent speech given at Beijing University.

The authors were downbeat about the prospects for international talks and China's position within them. "China, which was in the conference spotlight, played an active and constructive role, but was also under huge international pressure. It is predictable that our country will face a tougher challenge in future climate talks," it says.

Analysing international reaction to Copenhagen, the paper lists a selection of responses from the UN secretary-general, the Chinese foreign minister, the European commissioner, prominent NGOs and major media organisations, including the Guardian. It was written before the publication of the most strident criticisms of China's tactics by Mark Lynas, climate change adviser to the Maldives, and the UK climate and energy secretary, Ed Miliband.

Contrary to those views, the paper argues that the primary goal of China's negotiators was not to spoil the summit, but to resist a deal from rich nations that would put an unacceptable burden on China and other developing countries.

In their evaluation of the outcome, the officials' top point is that "the overall interests of developing countries have been defended" by resisting a rich nation "conspiracy" to abandon the Kyoto protocol, and with it the legal distinction between rich nations that must cut carbon emissions and developing nations for whom action is not compulsory.

The internal report acknowledges that unity among China's traditional allies in the developing world became harder to maintain in Copenhagen. "A conspiracy by developed nations to divide the camp of developing nations [was] a success," it said, citing the Small Island States' demand that the Basic group of nations - Brazil, South Africa, India, China - impose mandatory emission reductions.

The paper is scathing about the US-led "umbrella group", which it says adopted a position of inaction. Canada, it says, "was devoted to conniving" to convince the world that its pledge of a 3% emissions reduction between 1990 and 2020 is significant, while having no intention of meeting its Kyoto protocol target of 6%.

There are no comforting words for the European Union, which used to pride itself on playing a leadership role in climate talks. "Copenhagen was a setback for the EU", the authors say, in part because Europe "suggested the abandonment of the Kyoto protocol in order to please the US." The ministry has not responded to the Guardian's request for a comment on the leaked paper.

The authors note that the Copenhagen accord which emerged from the summit was not legally binding and lacked a global target for emissions. But it says that overall the accord was a "step forward", noting progress on a consensus to limit global warming within 2C, progress on the funding by rich nations of climate change adaptation measures in poorer nations and a "last minute" compromise by developing nations on the verification of their carbon pledges.

Lynas, who was present at many of the key negotiating sessions, said: "It's astonishing that this document suggests the Chinese really believes the absurd conspiracy theory that small island states were being played like puppets by rich countries. The truth is that the small island states and most vulnerable countries want China and its allies to cut their emissions because without these cuts they will not survive. Bluntly put, China is the world's No1 emitter, and if China does not reduce its emissions by at least half by mid-century, then countries like the Maldives will go under."

He added: "I think these claims of conspiracy are just a bullying tactic, to force more progressive developing countries back into line in case they too start demanding more serious action by China."

Speaking last month, China's chief climate negotiator, Xie - who also serves as vice-minister of the National Development and Reform commission which controls China's climate policy - also referred to the pressure from small island nations. "The rich nations were completely trying to make conflict among developing countries," he said.

He also described the "international fight on climate change" as a contest for economic development space and stressed that the way forward for China was to put more effort into building a low-carbon economy. "Countries with low-carbon industries will have a developmental advantage," said Xie. "Some people believe this is a global competition as significant as the space race in the cold war. "

The concluding section of the leaked document proposes a series of constructive initiatives. In what appears to be a bid by the environment ministry to play a greater role in carrying out climate-related policy, the report suggests amending air pollution control laws to include greenhouse gas emissions.

The official US version about what happened at Copenhagen is also harsh. Todd Stern, the state department climate change envoy, said this week that the summit "a snarling, aggravated, chaotic event." But America attributes the difficulties to a central divide between those countries - led by China - insisting rich countries bear the entire burden of reducing greenhouse gas emissions and the position held by the US that rapidly emerging countries must also take action. Stern suggested the divide had not been bridged. China, along with India, South Africa and Brazil, had been "ambiguous" in its follow-up commitments to the accord.

Tom Burke, the influential environmentalist and a founder of E3G consultants, said: "There was indeed a lot of work done to get developing nations to put pressure on China. [But] it was not a conspiracy of any kind unfortunately as Britain was acting entirely alone on this front. Neither our EU allies nor the US mounted any kind of diplomatic effort. Pretty well everyone in Copenhagen, not just the developed countries, complained about China's blocking tactics."

http://www.guardian.co.uk/environment/2010/feb/11/chinese-thinktank-copenhagen-document

'No intention' of capping emissions

February 25 (China Daily) - China has no intention of capping its greenhouse gas emissions even as authorities are committed to realizing the nation's target to reduce carbon intensity through new policies and measures, the country's top climate change negotiators said yesterday.

The negotiators also warned that rich and developing countries have little hope of overcoming key disagreements over how to fight global warming.

China "could not and should not" set an upper limit on greenhouse gas emissions at the current phase, said Su Wei, the chief negotiator of China for climate change talks in Copenhagen, at a meeting in Beijing on China's climate change policies in the post-Copenhagen era.

Su, who is also director of the department of combating climate change under the National Development and Reform Commission, said that China's greenhouse gas emissions have to grow correspondingly as the country still has a long way to go in improving people's livelihoods and eradicating poverty.

The country's carbon dioxide emissions per capita is also relatively low compared to developed countries and China has not contributed much to climate change because of its short history as an industrial nation, he said.

However, China will spare no effort to adopt proactive measures to fight the negative effects caused by global warming and achieve the country's ambitious goal of cutting carbon intensity per GDP unit by 40 to 45 percent by 2020, a voluntary target China pledged last November, he said.

"The targets for carbon intensity reduction will be included in the 12th and 13th five-year plans (2011-15; 2016-20) as a binding index," he said.

The targets remain a very challenging task for China, as its secondary industry comprises a large part of the country's industrial structure, said Ma Zhong, a professor at the Renmin University of China.

The secondary industry accounted for 46.8 percent of China's 2009 general domestic income, official statistics showed.

Carbon emissions caused by manufacturing sectors account for about two-thirds of total emissions in developing countries, while emissions of the service sector have the same ratio in developed countries, researchers have said.

China will introduce a carbon emissions check system for the steel industry and a fuel efficiency management system for automotive products, as well as initiate demonstration projects in the petrochemical industry, Premier Wen Jiabao said at an executive meeting of the State Council, China's Cabinet, yesterday.

Similarly, fighting climate change was highlighted as a major national strategy as well as an important opportunity for economic structure adjustment by the country's top leadership at a meeting on Tuesday.

Many hope a legally binding climate change treaty, which failed to be signed at the Copenhagen conference, will be finalized at a UN meeting in Mexico in December.

Yu Qingtai, China's special representative for climate change negotiations, said yesterday that players could face hard times in this year's climate negotiations.

Developed countries are unlikely to change their tune and will continue to be reluctant in promising emission cuts and utilizing green funds, he said. They will also pressure developing countries into shouldering unreasonable responsibilities and the so-called new emerging big countries will remain their main targets, he said.

Yu said China will stick to the principle of "common but differentiated responsibilities" and work together with international communities, though a divergence of views on vital issues will be a long-standing problem.

A vast majority of developing countries are in the initial or middle stage of industrialization, which is characterized by high carbon intensity, while rich countries have completed industrialization and transferred a large part of manufacturing functions to developing countries, said Qi Ye, a professor of Tsinghua University.

"Both developed and developing countries are facing heavy costs in efforts of cutting emissions. Developed countries are striving to sustain their vested interests while developing countries are seeking the rights for development," said Pan Jiahua, a senior researcher with the Chinese Academy of Social Sciences.

Developing countries will lose their future edge in terms of development speed, scale and level if they have no space for emissions, Pan said.

http://www.chinadaily.com.cn/cndy/2010-02/25/content_9499372.htm

Equal plan of emissions rights

February 1 (China Daily) - The most crucial task for China in international climate talks is to seek an equal arrangement of emission rights that could guarantee its development interests and basic human rights, says Ding Zhongli, a renowned geologist and vice-president of the Chinese Academy of Sciences in an interview with China Daily.

While in allocating emissions rights - or the quota of emissions - for different countries, the reduction proposals of the IPCC (United Nations' Intergovernmental Panel on Climate Change), the G8 and the OECD (Organization of Economic Cooperation and Development) did not consider that the cumulative emissions per capita of developed countries throughout modern history (from 1900 to 2005) has been 7.54 times that of developing countries.

They assigned developed countries 2.3-6.7 times the future emissions quota per capita more than developing countries, which would remarkably deprive the development and interests of poor countries.

Due to the gigantic differences in the historically cumulative emissions amounts and the current emissions base quota, if considering how much different countries have reduced in emissions in a bid to control atmospheric CO2 concentration, it would screen the differences in emissions in history and per capita, resulting in an unjustified outcome, Ding says.

In his paper on the major proposals for carbon emissions reduction and some related issues, published on February issue of "Science in China", Ding analyzed the trap hidden in the dialogue on emissions reduction.

The "trap" consists of: First, demonstrating the high sensitivity of global temperatures to atmospheric CO2 concentration; second, emphasizing the catastrophic impacts of global warming on the biosphere and on humans; third, making the value judgment that the extent of temperature increases since the Industrial Revolution should be controlled under 2 C within this century; fourth, calculating that the atmospheric CO2 equivalent concentration should not exceed 450 parts per million by volume within the 2 C model; fifth, defining the responsibilities of developing countries in terms of long-term emissions reductions; sixth, fixing the quota of developing countries in long-term emissions reduction.

The key point here is that once the concentration target of 450 ppmv is established, the permitted emissions from fossil fuel combustion and cement production from 2006 to 2050 are fixed accordingly.

Even though the ocean and land continue to absorb 45 percent of carbon emissions, the total amount of emissions that people all over the world could discharge is at about 255.11 GtC. In the total amount of emissions, however, after developed countries determine their proportion of how much they should reduce, there is not much vacancy left for developing countries to exercise emissions freedom.

Developing countries may not be fully aware of the "trap". For example, some negotiators from developing countries have long been stressing that developed countries should cut it by 40 percent by 2020 from the 1990 levels. In fact, regardless of whether developed countries can make that target or even though they reach that target, the emissions quota left to developing countries is very limited, Ding said.

Therefore, these proposals (including those of the IPCC, the G8 and the OECD) have violated the international principles of justice and fairness and also go against the principle of "common but different responsibilities" endorsed by the United Nations Framework Convention on Climate Change and the Kyoto Protocol. These proposals have no legitimacy to be taken as the basis of further international climate change negotiations.

As the world's most populous country, it is normal that China's emissions amount and methods are of great concern worldwide. But it goes without saying that China strives for emissions equality, given its huge development gaps among regions, its large impoverished population, high-speed industrialization and current urbanization rate of about 45 percent.

According to the three proposals, however, China should receive an emissions quota of less than 20 years, which means that no later than 2026 China has to buy emission rights from other countries. Certainly, China can't accept this. This is the crux that concerns the impartiality of emissions rights distribution.

The world undoubtedly is mankind's common system and the atmosphere is a public resource shared by everybody. It is men's natural right in the use or distribution of any substance, including the composition emitted by anthropic activity that also should reflect the principle of impartiality. So, in discussion of future emissions rights, the historically cumulative emissions per capita of each country that has already emitted CO2 should be considered, and then the future emissions quota of each country should be calculated.

As a world power with responsibility, China could resort to the subject of "cumulative emissions per capita" in negotiations. If the international community could truly adhere to the principles of fairness and justice and control carbon emissions through cumulative quotas, China could not only strive for more emissions rights but also break the chains imposed on China by some countries, establishing an image of confident and responsible power in international affairs.

http://www.chinadaily.com.cn/cndy/2010-02/01/content_9404623.htm

^{Low Carbon Development}

Shift to green growth in place

February 4 (China Daily) - China's switch to low-carbon growth will be outlined this year, as the nation informed the United Nations of its domestic emission reduction targets for 2020.

The year 2010 will be crucial for the country's thorough shift to a low-emission economy, experts have said.

As the 11th Five-Year Plan period (2006-10) is set to expire, work must begin to further detail the roadmap to realize carbon-intensity cuts in the 12th and 13th five-year plan period (2011-20), despite the set target being voluntary.

"China will endeavor to lower its carbon dioxide emissions per unit of GDP by 40-45 percent by 2020 compared to the 2005 level," said the National Development and Reform Commission (NDRC), the country's top economic planning agency, in a letter to the United Nations Framework Convention on Climate Change.

In the letter, the NDRC also said China will "increase the share of non-fossil fuels in primary energy consumption to around 15 percent by 2020 and increase forest coverage by 40 million hectares and forest stock volume by 1.3 billion cu m by 2020 from the 2005 levels".

"The carbon-intensity cut will see far-reaching influence on China's economic growth," said Jiang Kejun, a researcher with the Energy Research Institute under the NDRC.

"Energy-related industries will have to prepare for incremental costs to improve their energy efficiency. They have to take the political signal seriously and be prepared as soon as possible."

As the national mid-term target has been set up clearly, experts on climate and energy are working on allocating the mid-term carbon emission cuts to different regions.

"Making regions shoulder fair and reasonable shares in emission reduction, not yet a uniform target during the 11th Five-Year Plan period, is a challenge that demands mountains of work," Jiang said.

The mid-term carbon intensity cut target will be a domestic, legally binding guideline for its economic and social development, the country's top energy expert said.

He Jiankun, vice-chairman of the China expert panel on climate change, has been leading his research team to map a energy and greenhouse gas emission control blueprint in 2020 for the Chinese government's policies.

"To ensure the target, China will set up a set of transparent and fair systems on statistics, monitoring and assessment," He said.

"This is China's initiative, to realize a sustainable development and mitigate climate change," He said. "It is in line with the country's basic conditions, which is in the process of industrialization."

He said setting up the target will help China, the world's biggest greenhouse gas emitter, further depart from an unsustainable development mode onto an energy-saving and sustainable green track.

He said it is a breakthrough for China, a country in the middle of the industrialization process, not to follow the development path of rich countries.

The shift, He said, is estimated to cost China an additional investment of 1 trillion yuan ($147 billion) every year.

"Compared with developed countries which have finished their process of industrialization, China's target is really ambitious and challenging," He said.

http://www.chinadaily.com.cn/china/2010-02/04/content_9424347.htm

Protection, incentives to boost environmental businesses

February 24 (China Daily) - Enhanced protection of intellectual property and innovation are crucial to sustainable growth in the environmental industry, said Xie Zhenhua, deputy director of the National Development and Reform Commission (NDRC), China's top economic planning agency.

In comments to the Xinhua news agency, Xie said breakthroughs are needed to improve energy efficiency, the use of cleaner coal and control of pollution.

The nation's environmental industry is expected to generate 2.8 trillion yuan in revenues in 2012, he said.

Xie's views were echoed by Mao Rubai, president of the China Environment Service Industry Association, who added that shortfalls in research and development hinder the industry's growth.

"Without its own core technologies, a company is no doubt weak in competition," Mao said. "Chinese companies need to sharpen their edge in technological innovation and build up their own brands to position themselves better in the market."

Xie said ways to help the healthy development of the industry include increased investment in key environmental projects, policies to encourage use of energy-efficient products and creating a fair market for eco-friendly businesses.

Higher costs are a major obstacle to widespread use of eco-friendly products. Many businesses with huge potential are unable to compete in price, especially in their startup phase, industry insiders said.

Zhao Yingmin, an official with the Ministry of Environmental Protection, said the environmental industry needs more governmental support, according to a story in the 21st Century Business Herald.

There will be more government spending in the environmental industry during the next five-year plan (2011-15) than in present planning period, Zhao said.

Investment in environmental projects is projected to surpass 3 trillion yuan in the next five years, about 1.5 percent of the nation's gross domestic product, which is expected to offer enormous incentive to the industry, said Wang Jinnan, deputy president of the Chinese Academy for Environmental Planning, a participant in drafting the upcoming plan.

Environmental investment totaled about 2.3 trillion yuan between 2009 and 2012, Wang added.

Spurred by favorable policies, environmental-related business is expected to grow annually at 15 to 20 percent in the next few years, Wang estimated. The annual industrial output was 480 billion yuan in 2008.

Wang said policymakers are considering imposition of taxes on pollutants and carbon emissions. An environmental tax plan jointly proposed by the ministries of finance, taxation and environmental protection has been submitted to the State Council for final approval.

If the plan is adopted, one or two provinces are expected to be named as pilot sites for green taxation this year.

The tax would join a series of other measures - including bank loans, securities and insurance - as part of a policy package to boost a green economy, experts said.

http://www.chinadaily.com.cn/cndy/2010-02/24/content_9492515.htm

GE China capitalizes on environmentally-efficient products

February 8 (China Daily) - SHANGHAI: According to GE China President and Chief Executive Officer Mark Norbom, China is in the process of evolving from a low-quality product manufacturing center into a high-quality one, in which he sees vast market potential by bringing into the nation his company's environmentally-efficient products and services.

"If you look at some of the measurements, such as the purchasing managers' index, they are all heading in the right direction, with China's exports rising for the first time in December. So now I can absolutely see a recovery starting to happen in the manufacturing sector of China," he said in an exclusive interview with China Daily.

"Like Japan, which started initially as a low-cost product base globally, China is moving towards better and higher quality product manufacturing a leader in technology development and research."

US conglomerate GE is viewing China not only as a manufacturing hub and sourcing center but also as a base for product innovation and research and development (R&D). Last year it spent $4.5 billion on product sourcing in China.

So far, among the 13,000 people GE employs in China, 2,000 are focused on R&D and product innovation.

For example, the company developed a new near-shore wind turbine specially for the Chinese market.

Norbom hailed China's 4-trillion yuan economic stimulus plan as "well-targeted" and "fast to the market".

He said: "You can judge it from the annual GDP growth of 8.7 percent China obtained last year. That speaks for a success." He forecast the nation's economy could grow faster at 9 to 10 percent in 2010.

He said all of GE's infrastructure business in China had seen an increase in opportunities.

In addition, because part of the stimulus program was targeted towards technology, particularly in environmental areas, it benefited Ecomagination, a business initiative GE launched in May 2005, to address worldwide environmental challenges. This involved launching more than 80 products and services focused on being environmentally efficient in areas such as clean coal, water treatment and the wind business.

GE pledged to increase the revenues in its Ecomagination drive to more than $25 billion by 2012, and double its R&D spending to $1.5 billion per year on environmental projects.

It also vowed to reduce greenhouse gas emissions, make water usage in its internal business operations more efficient, and help improve public awareness "to make sure everybody becomes more aware of the need for environmentally-efficient products".

Last year, revenues from Ecomagination products sold in China reached $953 million, ranging across products such as the world's most environmentally efficient aircraft engines to energy and water treatment equipment.

In his view, there is no "offsetting" between obtaining higher GDP growth and cutting pollution because of the tremendous economic boost globally in the area of green technology development.

"I think the biggest way to balance these two goals is to put a big focus on developing environmental technology and products. Entering into partnership with GE will help accelerate such efforts," he said.

"We have a lot of technologies and we are ready to bring them in by working with industry-leading Chinese companies. It's our objective to work with them to go after the China market and go global together," he said.

For example, the company is working with the China South Rail Group and China's Ministry of Railways to go after locomotive engine production, and tapping potentially high-speed rail opportunities in the US.

It has also worked with China's State Grid Corp on the transmission and distribution side of Smart Grid applications.

GE also signed an agreement with Shenhua Group to work on clean coal projects together.

In the aviation sector, GE signed an agreement in December last year with AVIC to build avionic products, potentially targeting China's C919 jumbo jets.

It is also working with Shenyang Blower Works Group (SBW) in the area of oil, gas and pipeline compression equipment.

Clean coal is one area GE is interested in. Currently more than three-quarters of China's energy consumption is coal-based and it is the biggest cause of greenhouse gas emissions in the country.

With China not moving away from coal any time soon, how to address the problem of emissions is posing a big problem for the nation.

GE offers a "gasfication" technology, which turns coal into gases and burns them in an efficient manner, rather than just burning the coal. With its leading technology in clean coal, GE has applied gasfication technology through licensing agreements with 40 power and coal-chemical facilities in China.

Looking forward, Norbom said there was one exciting area that he wanted to promote in China. It involves bundling all the GE products and services together and providing integrated packages to cities seeking greener, more sustainable development, instead of going after individual industrial projects.

Through all these innovative products and services, the business for GE in China may grow at a range between 20 to 25 percent in 2010 because "our portfolio of products fits well with what China needs today".

GE obtained a sales growth of 18 percent last year in China, with its mainstream infrastructure business rising by 26 percent.

http://www.chinadaily.com.cn/bizchina/2010-02/08/content_9443330.htm

China's coal mining hub urged to adopt low-carbon technologies

February 1 (People Daily) - Chinese State Councilor Liu Yandong has urged northern Shanxi Province, China's main coal mining hub, to adopt low-carbon technologies.

Liu made the remarks during a recent investigation and study tour to Shanxi.

The province should make more efforts in developing environment-friendly and energy-efficient technologies in coal industry, such as technologies of coal liquefaction and gasification, Liu said.

Shanxi should apply more low-carbon technologies in industrial sector, infrastructure and transport service, she said.

Liu said the province could also develop clean energy technologies such as solar and wind power generation, while promoting the development of energy-saving and new energy vehicles.

Through the smooth application of low-carbon technologies, the province should transform its economic development into a pattern of high energy efficiency and low carbon emission, she said.

http://english.peopledaily.com.cn/90001/90776/90785/6883671.html

Sowing the seeds for a truly green revolution

February 22 (China Daily) BEIJING: Poisonous shrub can help to produce biodiesel for cars with residue used as biomass to power electricity plants

Farmer Li Guangrong was overjoyed last year when he received a red envelope filled with 3,000 yuan ($439) in cash.

The 59-year-old man from Southwest China's Yunnan province had not expected to earn the extra money from looking after a jatropha plantation during his spare time.

After all, planting rice and corn on 5-mu (0.33 hectares) of land contracted to his family has been his top priority.

The Li family is one of more than 320 households in Yongxing town, some 260 km north of the provincial capital of Kunming, who help plant 20,040 mu (1,337 hectares) of jatropha for Yunnan Shenyu New Energy Co Ltd.

Jatropha, a perennial poisonous shrub, was previously never regarded by local farmers in Yunnan as an industrial crop that could generate economic benefit.

It was at most used as a living fence to protect fields from animals.

But in the eyes of Gou Ping, Shenyu New Energy's general manager, the lush green shrub is a goldmine that could generate 400 million yuan in annual sales for her company in the near future.

When jatropha seeds are crushed, the resulting oil can be processed to produce biodiesel that can be used in a diesel car.

The residue can also be processed and used as biomass feedstock to power electricity plants or used as fertilizer.

Each jatropha seed produces 30 percent to 40 percent of its mass in oil. Jatropha can be grown in a range of difficult soil conditions, including arid and non-arable areas.

"We are very confident about the biofuel industry. Many countries, including China, have realized the renewable energy industry would become a new engine for economic growth," Gou said.

Gou's ambition is in line with Yunnan province's plan to develop renewable energy projects.

The mountainous province, which boasts the largest diversity of plants in China, plans to build itself into a major biofuel production base for China.

The province plans to be able to produce 500,000 tons of biodiesel annually by 2015, according to a development plan for 10 key industries issued by the provincial government in September last year.

Planting jatropha has been a focus for the local government's biofuel development plans since 2007.

Yunnan currently has about 1.39 million mu (92,713 hectares) of jatropha and plans to develop 3 million mu (200,100 hectares) of jatropha by 2015, said Wang Weibin, director of the afforestation division of the provincial forestry department.

Increasing environmental concerns and rising crude oil prices are forcing countries including the United States and China to look for alternative energy resources.

BP Plc, the largest oil and gas producer in the US, said in September that biofuels would replace about 25 percent of gasoline and 8 percent of diesel in the US in 2030.

US biofuel production will rise more than fourfold to about 2.3 million barrels a day in 2030 from less than 500,000 barrels a day in 2007, Katrina Landis, head of BP's alternative-energy unit, said in a speech posted on the company's website in September.

Carbon dioxide

As the world's second largest oil importer, China is also promoting the development of biofuel to reduce its dependency on imported crude oil.

The country plans to be able to blend 2 million tons of biodiesel into its annual fuel consumption by 2020.

China's annual crude oil demand is expected to exceed 400 million tons this year and reach 563 million tons by 2020, according to a report issued by the Chinese Academy of Social Sciences.

The Chinese government declared at the end of November that China plans to reduce the carbon dioxide emission per unit of gross domestic product (GDP) by 40 to 45 percent in 2020 from the baseline of 2005.

In order to realize such a target, non-fossil fuel consumption is expected to account for 15 percent of the country's annual energy consumption, up from the current 3 percent level.

"China has tremendous resources and could be a very important player in the world's research and commercialization of biofuels," David Wang, president of Boeing China, said at the World Route Conference in Beijing in mid-September.

Wang said that if China could achieve the target of turning 75 million mu (5 million hectares) of wasteland into jatropha plantation by 2020, biofuel produced by China could replace 40 percent of the current global aviation jet fuel demand. Currently the global aviation industry consumes 1.5 to 1.7 billion barrels of jet fuel annually.

http://www.chinadaily.com.cn/bizchina/2010-02/22/content_9482697.htm