April
29 (China.org.cn) -- In the data published by National Bureau of Statistics,
the country's energy supply and consumption are both seen to have increased in
the first quarter of this year. Meanwhile, the rate of decrease in energy
consumption in major enterprises is slowing down month by month.
Preliminary
statistics show that China's Q1 gross energy supply (energy production plus net
imports) reached 655 million tons of standard coal, growing 3.45 percent over
last year, and the increase rate is up 1.65 percent compared with Q4 last year,
in which energy production amounted to 585 million tons of standard coal and
imports registered 69.8 million tons, respectively up 4.31 percent and down
3.28 percent, both year on year.
Additionally,
during the first three months of 2009 China's gross energy consumption reached
664 million tons of standard coal, increasing 3.04 percent compared with last
year, and up by 2.25 percent over Q4 of 2008.
Consumption
of coal and electricity are both recovering whereas an accelerated drop has hit
petroleum. In Q1, the entire country consumed approximately 649 million tons of
coal, up by 2.69 percent, 781 billion KWh of electricity and 57.35 million tons
of oil, or a decline of 4.02 percent and 6.35 percent, respectively.
Recovery
is also seen from infrastructural business and major energy consuming
industries, which either report consumption growth or a slowing pace of
decrease. The upward trend in these industries has been steady over the past 4
months, growing by 2.34 percent on monthly average.
The
drastic drop in industrial production has now halted. Though it's still too
early to say that the economy bottomed out in Q1, it seems not too far from
that point.
Meanwhile,
compared with last quarter of 2008, many indexes such as Q1 increased bank
loans are flagging economic recovery, while the rising PMI, accompanied by the
robust rebound of A Shares, is an economic highlight amid international gloom.
(http://www.china.org.cn/business/highlights/2009-04/30/content_17702549.htm )
China
won't copy US and EU in bioenergy development
April 21 (Xinhua News Agency) -- Rigid domestic demand
for grain crops has forced
China
to turn its back on corn and rapeseed, the traditional raw materials used by
the West for bioenergy production, and focus on crops whose annual output
stands much higher, said an agricultural legislator Monday.
At a rural economic forum closed here on Monday, Vice Chairman Yin
Chengjie of the Agriculture and Rural Affairs Committee of the National
People's
Congress
,
China
's
top legislature, said the premise of
China
's bioenergy development
strategy was "not to jeopardize food safety."
"The
United
States
and the European Union have been
grain-crop exporters for a long time. With the acceleration of their bioenergy
production, however, they not only reduced exports but even imported more corn
and rapeseed. That helped tilt the supply-demand balance and jack up the grain
prices on international markets," said Yin.
"
China
must, and has the conditions to, explore a different road in biofuel
production," he said.
For
China
,
the bottleneck was not in processing technology but the country's limited
farmland resources and grain crop shortage. Growing population and the
accelerating produce-processing industries would also raise grain crop
consumption, said Yin.
Yin said a viable way out was to use non-grain raw materials --
especially wheat or rice stalks.
China
produces 700 million tons of
wheat stalks each year, compared to only five million tons of grain crops.
Under traditional farming, when people were less aware of recycling
and clean energy, farmers would normally let stalks rot away in the fields or
simply set a fire for a quick cleanup. More than 500 million tons of stalks
were estimated to have been wasted each year.
State Energy Bureau chief Zhang Guobao has said in the year's
national legislature meeting in March that
China
should learn from past
experiences and put new energy development onto "an important strategic
position."
An increasing number of rural households have learned to recycle
stalks by adding them to livestock manure into methane pools for power
generation. By the end of 2008, some 30 million households have built their own
methane pools with an aggregated yearly methane output of 12 billion cubic
meters, equivalent to 17 million standard coal.
Another 67 stalk power plants were built as of June 2008,
transmitting 2.613 billion kilowatt hours into the national power grid.
(http://news.xinhuanet.com/english/2009-04/21/content_11228046.htm )
April 23 (Xinhua.net) –
Beijing--
NANCHANG -- A Chinese power equipment
manufacturer is expanding production of a new type of power generator that can
recover waste heat from industrial exhausts for power generation.
The Jiangxi Huadian Power Corp.
Ltd. is building a production line that is capable of turning out 500 such
screw expansion power generators a year,said Hu Da, chairman of the board of
the company, on Thursday.
The facility will enter
production by the end of this year, he said.
The generators put on show at the
2009 Beijing International Energy-saving and New Energy Technology Expo in
March attracted attention from
China
's
state leaders.
"Both President Hu Jintao
and Vice Present Xi Jinping stopped at our booth and listened to my
presentation," said the manager.
He told the leaders that a
nationwide popularization of the power generators can recover industrial
exhaust from industrial boilers, and generate power several times larger than
that generated by the world's largest hydropower station at Three Gorges.
The company based in east
China
's
Jiangxi
Province
has developed four types of generators with power ranging from 50 kilowatts to
1,500 kilowatts. The averaged price is set at 1 million yuan (US$146,433).
The generator was applied in
Tibet
to make use of local terrestrial heat in 2007.
"A generator of 100-200
kilowatts can supply enough electricity for a village," said Wu Fangzhi, a
member of the Terrestrial Heat Division of the China Energy Research Society.
He said that besides terrestrial
heat,
China
has more than 400,000 industrial boilers. Those in cement and porcelain plants
produce industrial vapor with temperature as high as 400 degree Celsius, which
can be recycled into a powerful energy through the screw expansion generator.
While the generator collects the
energy for power generation, it also purifies soot in the vapor discharge, he
said.
The technology was developed by
Hu Liangguang, a professor with
Tianjin
University
. He said he
used the screw expansion motion as power to start the engine.
He said the generator demands
high-precision equipment to control the heat expansion in order to guarantee
stable power generating.
The company has so far installed
more than 40 screw expansion generators in steel, petro refining, thermal power
plants in pilot production. The generators can work non-stop for up to 6,000
hours.
The company chairman said the
company has invested 300 million yuan in the first phase production this year.
If the market responds well, the company hopes to expand the annual production
to 10,000 units by 2012.
(http://www.chinadaily.net/china/2009-04/23/content_7709611.htm )
April 28
(China Daily) -- Energy is becoming an important attribute for world financing
circles.
China
,
as a fast-growing economy with increasing energy demands, should raise its
awareness of energy financing to the national level and take concrete measures.
The
development of energy's attribute of finance has helped those countries
dominating the world's energy finance gain a huge profit in a restructured
global labor division system. To reduce the impact brought by a devalued dollar
and global financial bubbles on its foreign return,
China
should convert a major part
of its mammoth foreign reserves into energy resources or into a strategic
reserve stockpile. For an economy like
China
, the establishment of a solid
reserve of energy in kind remains a critical step toward promoting an
integrated energy finance system.
To
promote the move's smooth implementation,
China
should first work out a set
of integrated energy finance policies. Currently, the country's overseas energy
development strategy is encountering a range of risks, from the booming
inter-continental resources cooperation, geopolitical interests, unfair
international financial order, to an imbalanced exploration of global
resources. The integrated energy finance policies aim to take into
consideration financial security and energy security, divide the country's huge
foreign reserves into ones of currency, resources and futures to help domestic
energy companies gain a stable return in the fluctuating international markets
and then shirk risks.
To
this end, a special energy fund should be set up. The establishment of such a
fund, which serves as the core of the energy finance system, is expected to
help promote an effective combination of the energy industry and financial
capital. Also, the foundation, which comprises the funds for overseas
acquisition, industrial development and risk investment, should be used to
financially support domestic resources enterprises in their overseas moves
ranging from energy prospecting, to purchase of the right for oil fields
exploitation, investment into fine chemical industry and evaluation of major
projects.
Besides,
a special bank for energy investment and reserves should be set up as soon as
possible. According to predictions by the International Energy Agency, a total
of $2.3 trillion are to be invested by
China
's energy departments from
2001 to 2030. The country's common banks are obviously inadequate to meet such
an enormous investment demand. To advance the development of the country's
fledging energy sector, a special energy investment and reserve bank is thus
badly needed.
In
addition, greater effort should be made to promote innovation of domestic
energy enterprises.
China
has entered a stage of energy insufficiency, technological upgrading and rising
energy demand. This makes it necessary for the country's oil and petrochemical
enterprises to get well prepared to export capital and import resources for
further development. In the first two months, China's import of primary
products suffered a negative 10.6 percent growth rate from the same period a
year earlier, of which the import of crude oil declined by 13 percent and
refined oil declined by 6.4 percent. Along with a dwindling demand, the
aggravating difficulty in trade financing has also contributed much to the
drastic import decline. Under these circumstances, the country's enormous
foreign reserves should be used to fund domestic enterprises in their
"go-abroad" campaign. Energy sectors could be allowed to issue
convertible securities, bond financing and long and short-term liabilities
financing. Multilayer financing channel should be set up to control risk.
Also,
substantive efforts should be made to step up the process of
China
's renminbi as an
international currency for oil trading. According to statistics, about $800
billion to $1 trillion-worth oil dollar is being circulated, brewing a huge
risk for exchange rate risk and devaluation of the dollar. As the dollar's
dominant status as a global reserve currency now lacks strength in the face of
new challenges, the creation of a diversified oil pricing system and
transaction currency will be irreversible in the future.
China
should try to step up and
expand yuan-denominated trade with neighboring countries to expedite the
process of the yuan toward becoming a regional reserve and settlement currency.
This is the first and inalienable step to develop yuan into an international
currency.
Currently,
the world's oil demand is roughly 84.30 million barrels per day, out of which
China
consumes 7.5 million barrels or 9 percent of the global total. The growing oil
consumption makes it necessary for it to set up its own oil finance strategy
and thus form the "
China
's
market prices" in global oil deals.
For
this purpose, the country should encourage more domestic oil firms to enter the
world's oil market and actively push for settlement of oil deals in renminbi,
in an effort to offset the impacts brought by fluctuating international oil
prices.
Also,
the implementation of an agreement recently signed between
China
and some neighbors on the use
of yuan as their trade settlement currency will inevitably help the yuan go
international and lay a solid foundation for the Chinese currency to become an
oil trade currency.
Author: Zhang Monan, who is an economics
researcher with the
State
Information
Center
.
(http://www.chinadaily.com.cn/bizchina/2009-04/28/content_7724195.htm )
April 22 (China.org.cn) -- The Chinese government is planning to impose
carbon tax, according to a high ranking official in the Ministry of Finance. Su
Ming, deputy director of the
Institute
of
Financial Science
in
the Ministry of Finance, said the government is working on plans to impose an
environment tax, an energy tax and a carbon tax.
At the 2009 High-level Forum on Sustainable Development of China's
Energy Resources, Su Ming said the government's basic approach is to tax emissions
of carbon dioxide, sulfur dioxide, nitrogen oxide and industrial wastewater.
The carbon tax is the key element of the plan so it will be given detailed
consideration first.
The carbon tax is aimed at protecting the environment and slowing global
warming by reducing carbon dioxide emissions. The tax will be levied pro rata
on coal and petrochemical products such as gasoline, aircraft fuel and natural
gas.
A panel of 20 experts from seven government departments, sponsored by
the US Environmental Foundation, and led by Su Ming, has been studying the
implementation of a carbon tax for over a year. Su said their research findings
will be published in the next 2-3 months, but added that as yet the exact date
for the implementation of the tax has not yet been decided. A plan for an
energy tax has been drafted, and several departments are working together on a
plan for an environment tax. When the new taxes are implemented, current levies
on effluent discharges will be abolished.
The carbon tax will directly affect coal, petroleum and natural gas
companies. It is hard to estimate how great the impact will be since the tax
rate has not yet been fixed. But Su said that the initial rate would not be set
so high as to impose too great a burden on companies.
Director of Global Climate Change Solutions for the World Wildlife Yang
Fuqiang told reporters that the energy tax would mainly target the coal
industry because the petroleum industry already pays consumption tax. According
to Yang, when the energy tax is put into practice, companies will pay at least
40 yuan per ton of carbon dioxide emitted.
Background:
Carbon was identified as a key index for monitoring and regulating the
economy in the China Carbon Balance Trade Framework, a report jointly produced
last year by the China Environmental Culture Promotion Association and the
China Institute of Development Strategy Studies.
(http://www.china.org.cn/environment/policies_announcements/2009-04/22/content_17652059.htm )
China
's wind-power boom to outpace nuclear by 2020
April 20 (Reuters) - China will have 100 gigawatts of wind-power
capacity by 2020, a senior energy official said on Monday, more than three times
the 30 GW target the government laid down in an energy strategy drawn up just
18 months ago.
"Installed wind-power capacity is expected to reach 100 million
kilowatts in 2020. That will be eight times more than in 2008," Fang
Junshi, head of the coal department of the National Energy Administration, told
a Coaltrans conference in
Beijing
.
"The annual growth rate will be about 20 percent."
Fang's remarks confirm what industry experts have long maintained --
wind power has the potential to take a much bigger share of China's power mix
than the government had planned.
China, the world's second-largest energy user, has around 12 GW of
wind-power capacity and has already said it wants to raise that to around 20 GW
by next year, suggesting it was on course to smash the 2020 target, which was
set in 2007.
That means wind is set to be a bigger source of power than nuclear,
despite a construction boom in nuclear power plants, and far bigger than solar,
which is expected to hit 1.8 GW by 2020, according to the 2007 plan.
Suppliers to
China
's
wind sector include China Wind Systems, China High, Hansen Transmissions,
Siemens, Vestas, Suzlon and local leader Goldwind Science & Technology Co
Ltd.
The original 2020 target for nuclear was set at 40 GW, but
China
is now aiming for 60 GW and officials have spoken of 70 GW.
China
had 9.1 GW of nuclear power
capacity at the end of last year and is building 24 reactors with a further
25.4 GW. At least five more are planned but not yet approved for construction.
Both wind and nuclear have got a shot in the arm from the economic
crisis, since China's 4 trillion yuan ($585 billion) stimulus plan promised
more nuclear spending and upgrades to the power grid, which should help
stranded wind farms get connected.
Coal will continue to dominate
China
's power mix, although it is
likely to slip from its 80 percent share.
China
was aiming at 1,400-1,500 GW
total capacity by 2020, Fang said. Hydropower would account for 300 GW, while
coal-fired power capacity would need to reach 900-1,000 GW to ensure a
supply-demand balance of energy.
That meant
China
's
annual coal demand would increase by 600 million tons to 3.4 billion tons, he
said.
The economic slowdown has cut power consumption in
China
and a new fuel pricing regime
has stopped some of the oil price slump filtering straight through to pump
prices.
Since
China
's
gross domestic product (GDP) has kept growing, although at a much reduced rate,
the overall energy intensity of the economy could show a sharp decline.
"It's very likely that
China
will be able to achieve the
goal of reducing energy consumption per unit of GDP by 20 percent by the end of
the eleventh five-year plan (in 2010)," said Fang.
(http://uk.reuters.com/article/oilRpt/idUKPEK33615120090420 )
April 1 (China Daily) --
Guangdong
province is taking a leading role in
China
in developing LED for public
lighting systems.
LED (light-emitting diode) is an electronic light source. It has lower
energy consumption and a longer lifespan than traditional light sources.
Dongguan, a
Guangdong
city an hour's
drive north of
Hong Kong
, plans to outfit its
municipal lighting system with LED road lamps over the next three years. The
city will start by replacing 22,000 old road lamps with LED ones this year,
according to deputy mayor Liang Guoying.
The new LED lamp will save about 60 percent of power consumption
compared to the currently-used high-pressure sodium lamps.
"Dongguan is a big electricity consumer," Liang said.
"The LED lighting system will help reduce power consumption per unit of
GDP."
The municipal government estimates that when its entire lighting system
is upgraded, the city will save one billion yuan on power spending every year.
But LED lamps are expensive, costing almost 10 times as much as common
lamps. The Dongguan municipal government said it will subsidize 30 percent of
the equipment purchase cost, to offset the new lighting's higher price. The
rest will be covered by construction contractors. The city government will
spend more than 110 million yuan on the project
The city also wants to establish China's largest LED production base,
which could prove a smart business decision since Guandong plans to upgrade
1,500 kilometers worth of road (or about 100,000 road lamps) with LED
technology from 2009 to 2015, across the province (this figure includes the
Dongguan municipal project).
Shenzhen, a
Guangdong
city neighboring Dongguan, also plans to develop a LED production industry.
DSD Lighting and Electronics Technology Corp, a company based in
Shenzhen and focusing on LED lamp production and other alternative technology
development, is a benefiting from these plans.
"DSD will probably see a significant profit increase this year
thanks to various municipal government efforts to promote large-scale LED
lighting systems," said Tony Yingxiang Hsiung, general manager of DSD.
Hsiung said his company has focused on the LED business for more than
three years and that their products have been used in sports venues at the
Beijing Paralympic Games, in
Shanghai
's downtown
area and in
Jiangxi
,
Anhui
and
Guangdong
provinces.
The company is examining the commercial possibilities of residential use
of LED lighting.
DSD signed a contract this month with
Peking
University
Shenzhen
Graduate
School
to jointly set up
a LED research institute. DSD plans to invest $12.5 million in the institute.
Promoting energy-smart lighting systems is one of the country's ten key
energy-saving projects during the 11th Five-Year Plan (2006-10).
National Development and Reform Committee (NDRC) figures show that from
the beginning of 2008 to January 2009,
China
has subsidized the use of 62
million energy-efficient light bulbs with 280 million yuan.
The move will save 3.2 billion kilowatt-hours of power consumption, 3.2
million tons of carbon dioxide emissions and 32,000 tons of sulfur dioxide
emissions every year, said the NDRC.
(http://www.chinadaily.com.cn/bizchina/2009-03/30/content_7628152.htm )
April 20 (Xinhua) -- In many cultures, families hold a celebration
signaling that a teenager is ready to transition into adulthood - a coming of
age. Many global observers look to last year's Beijing Auto Show as a sign that
China
's
vehicle manufacturers are ready to take a similar step toward maturity on the
discerning and competitive global stage.
With a newly expanded venue in
Beijing
,
several manufacturers took the opportunity to show a range of offerings
seemingly engineered with global exports in mind.
Chery, Geely, FAW and SAIC all raised their game significantly last
year, as did several other smaller China-based auto producers.
Each used
Beijing
as a launching point to
debut vehicles and technologies to prepare for expansion in
China
and other markets.
Possibly the most important introduction last year was the Roewe 550
compact sedan - designed completely by SAIC with its big brother the Roewe 750
as a starting point.
Not shared with either of its partners General Motors and Volkswagen,
the 550 is crucial to SAIC's ability to expand in
China
and abroad on its own terms.
The sedan's level of technology integration, fit and finish as well as styling
signaled to the world that
China
is ready to truly become a global force in the highly competitive industry.
The Roewe 550, as well as other China-designed offerings, impressed many
foreign vehicle makers.
They surely took notice of the tremendous progress and, more
importantly, the looming competitive threat from
China
. This year's Shanghai Auto
Show will be part of continuing this maturation, especially amid global
economic turmoil that has placed the automotive industry flat on its back.
Impressing global visitors with a display of substantial progress in
vehicle design, value, content, technology and build quality is the number one
priority for the
Shanghai
show.
Despite the financial condition
Detroit
's
Big Three and poor output driven by the massive inventory correction underway
in
Japan
and Europe,
China
's
players face a changing competitive future. The current economic downturn, the
focus on lower global dependence on fossil fuels and the importance of a
vibrant domestic automotive industry for most industrialized economies adds to
the challenge of future market success for the Chinese.
Protectionism emerges
The prospect of automotive protectionism lurking within various Western
economies' domestically focused policies should concern everyone in the
industry. For over three decades, substantial bilateral and multilateral trade
agreements have increased economies of scale and vehicle build quality, lowered
overall costs and placed today's vehicles within reach of more consumers than
ever before.
Breaking down tariff walls has been one of the driving forces behind
expansion of the global automotive industry. Poorly conceived nationalistic
policies seeking to inefficiently protect employment could sacrifice the long
term for short-term political gains.
Global leaders need not make the same protectionist mistakes from past
economic downturns. The industry's globalization is real, substantial and
cannot be shifted into reverse. The best option is to forge ahead as one
industry, seeking the most efficient solutions to our myriad of complex issues.
New technologies
Another challenge facing all industry participants includes technology
access, implementation and integration. Today's discerning consumer is
expecting more from less. More content in the form of in-car communications,
audio capability, passenger comfort and occupant safety is critical. Consumers
will also be expecting less, such as vehicles with smaller mass that consume
less fuel with lower carbon footprints.
China
's vehicle manufacturers knew
long ago that beyond fruitful associations with global vehicle makers to
understand how to design and build the vehicle, the key to success abroad is
the seamless integration of state-of-the-art technology through relationships
with Western component suppliers.
Demands from the ever-discerning global consumer coupled with stiffening
safety, fuel economy and emissions regulations from various governments create
additional hurdles for success in tomorrow's market.
Rising Corporate Average Fuel Economy (CAFE) standards in the
US
,
preparation for Euro VI emissions standards midway through the next decade and
the implementation of new emission standards in other jurisdictions place new
importance on powertrain technology and efficiency.
No longer can vehicle manufacturers build outdated products for several
years without a substantial update.
Globalization
Several factors are propelling the shift to high-volume global
platforms. A platform is the structural basis that can support several body
styles and nameplates.
A single platform can form the basis of a sedan, coupe, crossover
utility, a tall wagon and even a convertible.
The ability for a company such as
Toyota
to share component sets and build formats between the Camry sedan and the RAV4
CUV is invaluable.
Better known as global platforms and component sets, virtually every
successful manufacturer utilizes global platforms to react to consumer shifts,
maximize fixed production capacity and lower the cost per vehicle.
The secret to the success of the Japanese manufacturers and Volkswagen
is imbedded in the ability to build several different types of vehicles from
few platforms globally.
Several vehicle manufacturers are learning the lesson underscored by
Chrysler in
North America
: do not focus on one
region and spread yourself too thin between too many segments.
A major driver behind the Chinese government's recent proclamation to
reduce the number of vehicle manufacturers is the goal to build strong globally
competitive vehicle makers that someday will be able to effectively extend
their reach beyond
China
.
This must extend beyond exports - localization of production to key markets is
part of a successful strategy.
Lessons from the past
Tomorrow's vehicle manufacturers and parts makers can benefit from the
years of case studies on automotive expansion strategies, some successful, some
not.
Back in the early 1970s, Japanese vehicle manufacturers focused on
expanding beyond their own market with a couple of key vehicles, choosing to
lower costs and enhance quality as each model was revised, known as the kaizen
approach to continuous improvement.
In the 1980s, these same makers knew that real success stemmed from
manufacturing locally in key export markets, moving closer to the consumer and
eliminating currency as a variable in the cost of a vehicle.
Through that decade, new Japanese factories popped up in the
US
,
Canada
and the
United Kingdom
.
These same manufacturers simplified the process by bringing their suppliers
with them and building products already being built back in
Japan
- the secret was to build
upon lessons learned at the new factories.
Hyundai/Kia also learned from
Toyota
,
Honda, Nissan and others' experiences. The company learned to emulate the
successful strategies and be careful not to duplicate those that the Japanese
regretted. Chinese automakers destined to be successful in
China
and beyond have the benefit
of Japanese hindsight but must make their own mark on the global industry as
they expand.
Best expansion routes
Undoubtedly, two or three China-based vehicle manufacturers will be
successful on the global scene by the middle of the next decade. Their success
will hinge on their ability to adapt to a changing market, not expand their
vehicle portfolio beyond their efficient capability and integrate appropriate
technologies required for success against extremely competitive players.
Success is neither simple nor assured. They will face many hurdles as
global players strengthen their competitive game and raise the stakes. Chinese
makers have a sizeable internal market, the right industry relationships and
the benefit of hindsight to make their mark on the world's vehicle market.
Michael Robinet is vice president
of Global Vehicle Forecasts for US automotive consultancy CSM Worldwide Corp
(http://news.xinhuanet.com/english/2009-04/20/content_11221460.htm )
China
aims to be world pacemaker of new-energy auto production
April 15 (Xinhua) --- April's Auto Shanghai
2009 show highlights the use of energy-saving automobiles, with several
well-known auto-makers, including GM and Ford, set to announce new products.
For many Chinese exhibitors this will also
be a good platform to show new-energy products. Domestic carmakers including
Geely and BYD announced earlier that they would unveil new-energy vehicles,
while the country's first hybrid sport utility vehicle (SUV) CS7 is expected to
make its debut.
New-energy autos mainly refer to electric
vehicles (EV) -- driven by an onboard power generator; hybrid electric vehicles
(HEV) -- which combine two or more propulsion system and can save as much as 40
percent of the fuel, and hydrogen or solar energy cars.
These automobiles, which features less
reliance on gasoline and diesel, energy-saving and environment protection have
attracted many countries worldwide to set foot in research and development in
the hope of saving energy.
Industry insiders expect
China
to become the pacemaker of a
new-energy automobile industry in the future thanks to strong policies from the
government and a full industrial chain.
On March 20,
China
unveiled a revitalization
plan for the domestic automobile industry, which outlines the details of
enlarging new-energy auto production, and developing spare parts and
components.
The plan said the country would channel
"special funds" from the central budget to encourage use of
new-energy autos. Government or companies that purchase the cars are expected
to get a compensation of 4,000 yuan (585.6 U.S. dollars) to 25,000 yuan per
car.
By 2011, annual production capacity of
new-energy autos should stand at 500,000, and 5 percent of new vehicles,
including lorries and buses, should be new-energy ones, according to the plan.
Li Chunbo, the CITIC Securities analyst,
told Xinhua on Wednesday:"
China
doesn't occupy a leading position in developing traditional oil-fueled
vehicles, but it has great potential in new-energy car production, if it takes
advantage of policies."
Pei Pucheng,
China
's Society of Automobile
Engineers praised the measures as a "positive signal" at the same
time, saying favorable policies would guide more enterprises to engage in the
industry, attract more talents and encourage consumption.
Worsening air conditions and energy
shortages have been big risks to
China
's economic development and
environmental protection.
China
had 50 million automobiles in
2008, and it is estimated that the figure will hit 150 million by 2020, and
fuel consumption is expected to top 250 million tonnes of oil.
China
ranks the third largest auto
producer worldwide in terms of production capacity, only behind the
United States
and
Japan
. Last year, the country
produced 9.35 million automobiles, an increase of 5.21 percent year on year.
Wan Gang, minister of science and
technology, underscored that it was a very good opportunity for
China
to develop self-made new energy autos.
The country is very likely to shift from the
status of a "large producer" to "leading producer" of autos
gradually, he said.
Expert
Pei
said, although
China
had been developing new-energy autos for a very short period of time, the
country was playing an important role in battery production, one of the most
important parts of a new-energy auto.
"The most widely-used auto batteries
are lithium batteries. The performance of batteries directly decides the
quality of new-energy automobiles,"
Pei
noted.
CITIC Securities issued a report in March,
which said "It appears that more and more lithium battery producers are
moving to
China
.
This will help
China
to occupy more market share in the new-energy auto market."
China
has about 200 lithium battery
enterprises, accounting for 40 percent of the world battery production. BYD
company limited is not only an auto producer but also the leading enterprise in
lithium battery production.
Last December, BYD unveiled F3DM hybrid
automobile, which was driven by a lithium iron phosphate battery. This battery
established its name for low-cost and high-efficiency.
Another domestic auto-maker, Chery Automatic
Company, announced in February a new vehicle with a maximum speed of
120 km
per hour.
Chen Quanshi, an expert with automobile
engineering
school
of
Tsinghua
University,
told the reporter on Wednesday that the country's auto industry was expected to
enter a "golden era" with the support of government policies and a
developed industry.
"The government should make more
efforts to make new-energy automobiles popular, and further reduce production
costs," Chen added.
The 13th Shanghai International Automobile
Industry Exhibition, also known as Auto Shanghai 2009, will be held between
April 20 and
28 in
Shanghai
.
(http://news.xinhuanet.com/english/2009-04/15/content_11190981.htm )
April
25 (CCTV.com) -- Auto makers from around the world are showing off new energy
and hybrid cars at Auto Shanghai 2009, but few of the vehicles are actually for
sale. As CCTV reporter reports, it could be a long time before alternative
energy vehicles account for a large slice of
China
's car market.
One
of the more interesting companies at this year's show is Build Your Dreams, or
BYD from Shenzhen. It is showing off 3 new alternative-energy models. The most
exciting of which is the fully electric E6. It can run 400 kilometers on a 20
minute recharge. Last October, investment legend Warren Buffett purchased a 10
percent stake in BYD, based on the huge potential of electric cars.
Xu
An, PR Manager of BYD Auto Sales Company said "We're the world's top
producer of cell phone batteries, so batteries are our core competence. We have
advantages in developing electric cars, which we think will be a huge trend in
the future."
BYD
isn't the only company showing off greener cars. Just about every company at
the event has an electric concept car, with BMW even putting its hybrid model
at the center of its display.
Automakers
are boasting about their commitment to alternative energies, but Chinese
consumers say the cars are a long way from being practical. For most buyers of
new energy vehicles, the added value isn't better mileage or reduced emission,
it is gaining face by proving they are concerned about the environment.
Being
green isn't cheap, however. The
Toyota
's Pirus
was the first fuel-cell hybrid vehicle to go on sale in
China
, back in 2006. About 1,200 of
the cars are sold every year on the mainland, less than 2% of the model's
global sales. That is probably due to its 250,000 yuan price tag. Even BYD's
cheaper hybirds cost twice as much as a normal car.
Mr
Jin,
Shanghai
resident said "I won't buy a new energy vehicle as my first family car,
only as my second or third family car. They are kind of like a big toy, but not
reliable enough for the road."
Automakers
say there are several issues hindering the development of new energy vehicles,
with convenience and policy topping the list.
Chen
Wenkai, President of Gasgoo.com said "For new energy cars to get around,
there must be a very complete network for battery recharging or hydrogen
refilling. Even if there is such a network, all new energy cars must have very
good battery life. Take the Prius for example, its fully charged battery can
only run for 13 kilometers."
Jia
Yaquan, Vice President of Great Wall Motor Company said "The country is
giving more policy support to cars with smaller engines than those with new
energy solutions. Naturally, it's better for us to focus on smaller cars."
For
now, policy to encourage new energy vehicles is limited in
China
. While the Ministry of
Finance in February offered a maximum 250 thousand yuan subsidy each to buyers
of new energy sedans, that money is mainly aimed at government buyers, rather
than individuals. Analysts say that won't help much if
China
truly hopes new energy
vehicles will account for 5 percent of annual automobile production within 3
years.
(http://vod.cctv.com/html/media/bizchina/2009/04/bizchina_300_20090425_5.shtml ,
http://www.china.org.cn/video/2009-04/25/content_17670925.htm )
China
drives sales for global majors
April 21 (China Daily) -- The China market
beckons as a bright beacon for global automakers floundering in other choppy
vehicle markets hit hard by the global financial crisis.
Overseas and domestic carmakers are showing
off more than 900 models at the 13th Shanghai International Automobile Industry
Exhibition, which has a total floor of 170,000 sq m - a fifth more than the
previous event in 2007.
First-quarter vehicle sales in
China
grew by 3.8 percent year-on-year to 2.68
million units, enabling the country to outstrip the
US
as the world's biggest vehicle
market, according to latest industry data.
The China Association of Automobile
Manufacturers forecasts full-year vehicle sales to reach 10.2 million units, up
almost 9 percent from last year.
Passenger car sales in the country will grow
7 percent to 6.1 million units, Yale Zhang, director of Greater China Vehicle
Forecasts for
US
consultancy CSM Worldwide Corp, said on Monday.
His predictions are backed by auto majors.
"
China
's overall auto market may
grow by 6 percent this year while the luxury segment will be double the
growth," said Dieter Zetsche, chairman of Daimler AG and Mercedes-Benz.
The premium brand's
China
sales jumped 30 percent to
more than 11,000 vehicles in the first quarter.
Nick Reilly, General Motors' Asia-Pacific
president, on Monday said the group expects the
China
vehicle market to rise
between 5 and 10 percent this year.
"From a long-term perspective, the
local market will continue to grow by between 7 and 9 percent over the next
five years," he added.
The Detroit-based company, which is
struggling to avoid bankruptcy, sold 363,701 vehicles in
China
in the first three months of
this year, an increase of 16.8 percent from a year ago.
Earlier this month, GM announced plans to
double its
China
sales to more than 2 million units in the next five years from last year's
figure. It is displaying 37 models at the motor show, including one making its
global premiere and five making their Asian debuts.
Katsuaki Watanabe, global president of
Toyota Motor Corp, said
China
's
economy and the auto industry are continuing to grow steadily amid a global
downturn.
"This should be attributed to
China
's
sound economic fundamentals and the government's stimulus policies,"
Watanabe said.
China
's GDP grew 6.1 percent in the
first quarter of this year, the slowest quarterly pace since 1992. However,
analysts said the country's economy has hit the bottom and will start to
rebound in the second quarter as a result of the government's pro-active
measures.
Andy Palmer, senior vice-president of Nissan
Motor Co, on Monday told reporters that the Japanese carmaker plans to launch
10 passenger car models and five light commercial vehicles in
China
before 2012.
The company's sales in
China
are
expected to grow 5 percent year on year to 570,000 vehicles this year, Palmer
said.
(http://www.chinadaily.com.cn/bizchina/2009-04/21/content_7728033.htm )
April 23 (China Daily) –
SHANGHAI
- With concern
of a green future and in answer to the Chinese government's appeal for
energy-efficiency, global and domestic automobile manufacturers are showcasing
their electric car models at the ongoing
Shanghai
auto show.
Troubled carmaker General Motors is
displaying the production version of its Chevrolet Volt - a vehicle that
delivers up to
64 km
of gasoline and emission-free electric driving.
The Volt, expected to be introduced in
China
by 2011, uses electricity stored in its 16-kWh, lithium-ion battery to move the
wheels at all times and speeds.
"Bringing the Volt to
China
shortly after its debut in the
United States
in 2010 is part of GM's commitment to sharing our latest achievements in energy
diversity with our second-largest market," said Kevin Wale, president and
managing director of GM China. "It will take
China
one step closer to its goals
of clean transportation and energy freedom."
Battery and car supplier BYD Auto, backed by
US
billionaire investor Warren Buffett, has three electric models - F3DM, F6DM and
e6 on display at the show.
The company has sold more than
80 F
3DM electric cars, the first
mass-produced model in the world, priced at around $22,000 each, to the
Shenzhen government for tests before public use.
"We have cooperated with local
government to set up around twenty 220V-charger pillars in parking lots around
offices and residential areas," said Yang.
"The next step is to establish a
charging station with 380V input. This will provide quick charging in 10
minutes and make the battery 70 percent full, enabling driving the car up to
70 km
."
Hebei-based Great Wall Motor unveiled its
GWKulla all-electric car, with plans to enter the market next year, while Chery
debuted its concept battery car - the Riichi M1.
China
relies on imports for nearly
half of its oil. "If
China
continues current growth rates it will almost double oil imports by 2030,"
said a McKinsey report released at the end of last year. "But greater use
of electric cars would cut this growth by around a quarter."
Considering the huge green potential in
China
,
German luxury carmaker Mercedes-Benz is showcasing its electric concept car
BlueZERO, which can run on batteries or fuel cells.
"The flexible BlueZERO concept allows
electro-mobility for every requirement, and highlights the fact that
Mercedes-Benz is the world's only car manufacturer to already have in place all
the key technologies for electric cars offering full everyday
practicality," said Dieter Zetsche, chairman of Daimler AG and head of
Mercedes-Benz.
Another German carmaker BMW is exhibiting
its near-zero emission electric car Mini Cooper E at the show, slated for
mass-production in 2010.
Japanese automaker Nissan and
Toyota
are also displaying their electric concept cars at
the
Shanghai
auto show.
(http://www.chinadaily.com.cn/bizchina/2009-04/23/content_7706812.htm )
April 20 (China Daily) -- China's
campaign to bring cleaner, low-emission vehicles to its roads may take a back
seat as the government first tries to stimulate growth and counter dwindling
sales in the world's largest car market.
Battery
and car maker BYD Ltd and other Chinese auto manufacturers with
ambitions to be among the first to globally market all-electric vehicles are
pinning their hopes on regulatory support to spur demand.
But creating an
emission-free vehicle market is unlikely to be a priority for
China
. While
China
has made much progress in
setting standards regulating vehicle emissions, it has not gone as far as
providing incentives for individual buyers of the expensive but low-polluting
cars.
"I hope government
subsidies can help boost demand, because this is good technology, though
expensive compared to conventional cars," Henry Li, general manager for
BYD's auto unit, said in an interview at the firm's Shenzhen headquarters.
China
, the fastest growing major market for vehicles, is also the world's
largest emitter of greenhouse gases.
Car sales growth in
China
, which overtook the
United States
in January to become
the world's largest auto market, slowed to a single-digit rate in 2008 for the
first time in at least 10 years as consumer confidence waned in a slowing
economy, spurring government steps to bolster demand.
Beijing
unveiled a
raft of policies in January to lure buyers back into showrooms, including
halving the auto purchase tax for cars with engine sizes below 1.6 liters. The
government also scrapped some road fees and offered subsidies for farmers to
boost demand for fuel-efficient vehicles in rural areas.
But given the high cost of
developing hybrid and all-electric cars, automakers require more than the
lifting of road fees and tax breaks to stimulate demand, experts said.
"There should be some
incentives in place to convince consumers to switch to electric cars,"
said Sinling Chung, chief executive officer of Hong Kong-based EuAuto
Technology Ltd, which recently began marketing a China-made microcar in
Europe
.
"There is also the
issue of infrastructure. At some point car owners will need juice points where
they can park and plug in the cars," said Chung in an interview at
EuAuto's Shenzhen plant.
EuAuto plans to sell its
two-door micro cars in
China
within three years, but has turned first to
Europe
,
where subsidies for consumers help drive demand for electric cars.
Hybrid cars
BYD started selling a
plug-in electric hybrid car in December, called the F3 dual-mode or F3DM, which
charges through a conventional home outlet and is supported by a small petrol
engine. BYD, known for its cell phone batteries and its investor, Warren
Buffett, plans to roll out its all-electric car, the e6, later this year. That
could make it the world's first
commercially-distributed electric car.
More established Chinese
carmakers have also been developing hybrid and all-electric cars.
Wuhu-based Chery Automobile
built a hybrid model, the A5, and unveiled a prototype of its pure electric
car, the S
18 in
February, while
Shanghai General Motors Ltd, the 50-50 joint venture between General Motors
Corp and SAIC Motor Corp, introduced the Buick LaCrosse Eco-hybrid in
China
last July.
The expensive cars,
however, have not been flying out of showrooms.
BYD's F3DM sells for about
150,000 yuan, which is 30-40 percent cheaper than
Toyota
's
Prius in
China
but still double the cost of a comparable gasoline-powered car.
Toyota's Prius, with
batteries that store energy from the engine to help power the car, sold 3,465
units from 2006 to
2008 in
China - fewer than expected, according to Daiwai analyst Ricon Xia.
Green car program
China
stepped up its support of green vehicles in January, offering up to
500,000 yuan in subsidies for companies and agencies purchasing electric
vehicles for fleet use.
While the move was seen as
positive for makers of green cars, experts say it will do very little to create
demand unless subsidies are extended to individual car buyers.
"Extending a subsidy
to a mass market will be a powerful incentive, but requires a lot of
money," said JP Morgan analyst Charles Guo.
"There may be some
debate whether this is necessary, so it's unlikely for the program to be
expanded near term," he said.
For now,
Beijing
is more focused on driving
consolidation in its fragmented and overcrowded car industry.
Beijing
is widely
expected to soon issue a detailed plan allowing big state-run companies to take
over smaller rivals.
(http://www.chinadaily.com.cn/china/2009-04/20/content_7695337.htm )
April 29 (China Daily) --
China
's emerging carmaker Chery
Automobile Co is moving closer to a domestic listing to fuel its rapid
expansion, according to a top executive from the company.
Yin Tongyao, chairman and general manager of Chery, said the company has
submitted necessary documents to the China Securities Regulatory Commission to
issue stock in
Shanghai
.
The company, based in the city of
Wuhu
in
Anhui
province, is now undertaking shareholding reform in preparation for the
listing, Yin said.
"Many domestic automakers are queuing up for a full listing and we
hope to jump the queue," he said.
He did not reveal the timeframe for Chery's floatation and how much it
plans to raise.
The company had total assets of more than 22 billion yuan by the end of
2007.
Other Chinese auto groups, such as FAW Group Corp and Guangzhou
Automobile Group Corp, are also preparing for A-share listings.
The benchmark Shanghai Composite Index now hovers around 2,400 points,
up one-third from the beginning of the year.
Analysts said Chery needs tens of billions of yuan to feed its
independent research and development, joint projects with foreign partners and
overseas expansion in the next couple of years. Public listing is one of the
best ways to raise the needed capital, they said.
At the
Shanghai
motor show, which closed yesterday, the company displayed a record number of 32
new models under its four badges - Chery, Riich, Rely and Kerry - including a
range of electric and petrol-electric hybrid vehicles.
The carmaker aims to boost sales to 419,000 vehicles this year from
356,000 units in 2008. It moved more than 100,000 vehicles in the first quarter
of this year, a record quarterly high since it began production 10 years ago.
Chery is also
China
's
biggest car exporter. It plans to ship 156,000 cars overseas this year, up from
135,000 units in 2008.
"However, the international market is plunging as a result of the
financial crisis and appreciation of renminbi," Yin said.
The group now has overseas plants in
Russia
,
Ukraine
,
Iran
,
Egypt
,
Indonesia
,
Uruguay
,
Thailand
and
Malaysia
.
It has plans for another seven factories abroad.
Chery's joint venture with US firm Quantum LLC will begin production of
Chery high-end cars at the end of this year for domestic and overseas markets.
The joint venture in
Wuhu
,
with a registered capital of $500 million, will have an annual manufacturing
capacity of 150,000 units in the first stage. Chery has a 55 percent stake in
the tie-up, with Quantum holding the rest.
Responding to reports that Chery will buy Swedish brand Volvo from Ford,
Yin said: "Must we buy Volvo? Why don't we build a brand better than it?
We will do our utmost to build our own brands."
Ford said last month that it had started detailed discussions with parties
to sell Volvo for between $1 and $2 billion.
A phalanx of Chinese automakers, such as Chery, Chang'an and Dongfeng,
are reportedly interested in Volvo.
Auto financing
Chery officially opened its auto financing joint venture last week with
Huishang Bank, a commercial lender in
Anhui
,
one year after the project was approved by Chinese regulators.
The carmaker holds an 80 percent stake of the auto financing venture
which has a registered capital of 500 million yuan. Huishang Bank has the
remaining stake.
The venture will provide loans to individual car buyers, Chery
dealerships and renters. It has started business in
Wuhu
and will expand into 10 big cities in
China
such as
Beijing
,
Shanghai
and
Chengdu
in
the second half of this year.
Many global automakers, such as General Motors, Ford,
Toyota
and Daimler, have already begun to offer auto loans in
China
to cash in on the burgeoning
business.
At present, less than 10 percent of new vehicle sales are financed in
China
,
compared with more than 70 percent in developed markets.
Analysts said the lower lending rate is due to the lack of a sound
credit system in
China
and the fact that local customers are not accustomed to buying cars on
installment.
(http://www.chinadaily.com.cn/bizchina/2009-04/29/content_7726871.htm )
China
Gas forges deal with Canadian firm in growth bid
April 17 (HK edition) -- China Gas Holdings
Ltd, a leading natural gas services operator on the mainland, said yesterday it
will purchase $20 million worth of equipment and services from a Canadian firm
in line with plans to triple the number of its transport gas refilling stations
over the next few years.
China Gas and IMW Industries Ltd, a Canada-based
natural gas compressor and related service provider, yesterday signed a
partnership agreement.
Under the joint venture, the two parties
will undertake a search and development of memorandum compressed natural gas
(CNG) projects.
Senior executives of both firms announced in
a press conference yesterday that CNG output of the joint venture will cater to
natural gas vehicles (NGV)in
China
and other potential markets elsewhere in the world.
Analysts said operating gas refilling
stations is a relatively undeveloped business for gas producers. However, oil
companies have been aggressively expanding their network of refilling stations
throughout
China
.
China Gas currently has 70 gas vehicle
refilling stations and plans to open up to 150 more outlets. Over the next
three years, it will set open 120 new stations, China Gas managing director Liu
Minghui said.
Xin'ao Gas Holdings Ltd, a distributor of
piped gas and China Gas' largest rival, also plans to increase the number of
gas vehicle refilling stations on the mainland. Xinao Gas now operates 128
outlets and plans to add 332 stations over the next few years, executive
director Wilson Cheng said early this month.
"China Gas has identified the CNG
vehicle refilling station business as a new major growth driver and we have
begun planning the development and deployment of resources for this
venture," said Liu.
The mainland is the second largest energy
user in the world. It plans to double by 2010 the use of gas to 5.3 percent of
the total energy consumption. This move is aimed at cutting reliance on
pollution-causing coal.
"Demand for gas is huge in
China
,
but pipelines and infrastructures are insufficient to meet demand," said
Shi Yan, an energy analyst at brokerage house UOB-Kay Hian.
Under its joint venture with China Gas, IMW
Industries will provide the latter with an array of products and services,
including equipment and support services. The Canadian firm will supply and set
up a minimum of 120 fully integrated CNG fueling stations for taxis and buses
over the next three years.
China Gas will also receive essential parts,
management support, staff training and maintenance support from its partner.
(http://www.chinadaily.com.cn/hkedition/2009-04/17/content_7686125.htm )
China
,
Russia
ink oil cooperation agreement
April 21 (Xinhua) --
Beijing
-- Chinese and Russian governments signed an oil cooperation agreement here
Tuesday, which Chinese Vice Premier Wang Qishan said marked a major
breakthrough in bilateral energy cooperation.
"A package of cooperation agreements
between Chinese and Russian enterprises will become effective after the
signature," Wang told a press briefing after inking the agreement together
with visiting Russian Deputy Prime Minister Igor Sechin.
China
and
Russia
signed seven agreements on a
package cooperation program for energy resources in February, which included a
pipeline construction project, a long-term crude oil trading deal and a financing
plan between the China Development Bank and the Russia Oil Pipeline Transport
Company.
"With shared efforts of the
governments, enterprises and banks of both sides, Sino-Russian energy
cooperation has made substantial development since the 13th regular meeting
between both prime ministers in last year," Wang said.
Sechin highlighted the agreement, saying it
was unprecedented and the bilateral cooperation would be perennial with sound
capital guarantee.
Sechin said
Russia
had started the construction
of oil pipelines and the infrastructure construction would be finished in a
short time.
"We will provide steady, reliable
supply of oil to
China
,"
he said.
During their talks Tuesday morning, both
sides also discussed cooperation in natural gas, nuclear energy, coal, electric
power and equipment manufacture for energy sources development.
(http://news.xinhuanet.com/english/2009-04/21/content_11227008.htm )
April 14 (China Daily) --
China
's three major oil companies
have little to gain from the lower global crude prices, according to industry
analysts.
The low crude prices could dent the bottom
lines of CNOOC and PetroChina this year, while oil refiner Sinopec may see
lower production costs, but not better revenue, they said.
Officials at the three oil companies have
all forecast that global oil prices would be hovering around the $50 per barrel
mark for most of this year. Crude prices had touched a record high of $147 per
barrel in July 2008.
Sinopec is expected to benefit most from the
relatively low oil price, as its refineries would have lower production costs,
said Qiu Xiaofeng, analyst, China Merchants Securities.
The low prices will have a negative impact
on PetroChina and CNOOC, as a large part of their profits come from crude
production, he said.
The gap between the high crude prices in the
international market and the relatively low prices of refined oil products
domestically has put Sinopec's refining business in the red.
The company's refineries were hit by soaring
costs and incurred losses of 61.5 billion yuan in 2008.
The company's net profit was 29.7 billion
yuan last year, down 47 percent from 2007.
"Given the low oil price this year, we
expect Sinopec to see an 80 percent growth in its profit this year," said
Liu Gu, analyst, Guotai Junan Securities in Shenzhen.
"PetroChina may manage to have the same
profit as last year, while CNOOC will see a 30 percent fall in profit this year,"
she said.
PetroChina's net profit last year was 114
billion yuan, a decrease of 22 percent from a year earlier. CNOOC's 2008 net
profit rose 42 percent to 44.4 billion yuan because of growth in production and
higher oil and gas prices last year.
Liu said international crude oil price will
have the biggest effect on the three company's business performance, but other
factors such as windfall taxes may also play a crucial role.
The stimulus package for the petrochemical
industry will also give them a boost, she said, adding the move will improve
the investment environment.
China
imported 16.34 million tons of
crude oil in March, the General Administration of Customs said in a statement
last Friday.
March's crude import level was up 33 percent
from February's 11.73 million tons, which may indicate that the world's
second-largest oil consumer is on course for an oil demand recovery.
The nation plans to boost production of oil
and natural gas by 4 percent and 58 percent respectively by 2011. Crude oil
output is expected to touch 198 million tons, while natural gas production will
be 120 billion cu m in 2011, according to a three-year plan by the National
Energy Administration (NEA).
Under the blueprint,
China
will build some large oil and
gas production bases over the next three years. The country will increase its
total oil refining capacity to 440 million tons by the year.
The global financial crisis has had a
negative impact on
China
's
economy and the country's energy sector is no exception, said Zhang Guobao,
head of NEA.
However, the country's energy industry still
has vast development potential as the huge population dictates demand.
(http://www.chinadaily.com.cn/bizchina/2009-04/14/content_7674641.htm )
China
's coal-to-liquids projects buffeted by
changing policy, economic environment
April 5 (Xinhua) -
Chinese coal enterprises have made strides in coal to liquids (CTL) projects,
using both direct and indirect methods, despite difficulties in the market and
policy environments.
The pressures
they face include sharply lower oil prices and a surge in coal prices, which
together can change the economic environment of many projects, and policy
changes at the national level.
The latest
success story took place in North China's
Inner Mongolia
.
On March 23, Yitai Group announced a successful test run with its 160,000-tonne
indirect CTL facility, producing quality diesel oil and naphtha.
Based in Jungar
Banner, Inner Mongolia, Yitai Group has an annual output of 100 million tonnes
of coal. Its CTL project was approved by the central government in 2005 and
began construction in 2006, with an investment of nearly 2.7 billion yuan (395
million U.S. dollars).
"The Yitai
facility is
China
's first
industrial-scale CTL line and it means
China
has made substantial progress in independent industrialization of coal to oil
using the indirect method," said Li Yongwang, chief scientist of the
coal-to-oil task force of the Shanxi Coal Chemical Research Institute (SCCRI),
under the
Chinese
Academy
of Sciences
(CAS).
Direct
coal-to-oil production involves mixing heavy oil with coal to produce coal
slurry and converting that mix into diesel oil and other products via
hydrocracking.
China
's
Shenhua Group was the first in the world to achieve industrial-scale direct
production.
The indirect
technique requires gasifying and purifying the coal, then adding activators to
synthesize diesel oil and naphtha. Yitai uses this type of technology, as does
Lu'an Mining Group.
Before Yitai's
project took off, Shenhua --
China
's
top coal producer -- conducted trial operations of a 1 million-tonne direct CTL
production line on Dec. 31, producing quality diesel, naphtha and oil. This
trial run made
China
the only country in the world to have achieved key technologies for 1
million-tonne-scale direct CTL production.
The trial ended
after 300 hours, but Shenhua is making improvements so it can conduct a
1,000-hour trial next month.
As a key
component of the national energy strategy, the Shenhua direct CTL project, also
based in coal-rich
Inner Mongolia
, officially
kicked off in May 2005.
Also, on Dec. 22,
north
China
's
Shanxi Lu'an Mining Group successfully experimented with a small-scale indirect
CTL facility, developed by SCCRI. It will conduct a trial of its 160,000-tonne
indirect CTL facility in the near future.
NEW LIQUID ENERGY
SOURCES
Coal accounts for
more than 70 percent of the energy mix in
China
, which has abundant coal
reserves but poor oil and natural gas resources.
Over the past
five decades,
China
has tapped several large oilfields, such as Daqing and Shengli. But discoveries
and production can't keep up with demand. With rapid economic growth,
China
became a net oil importer in 1992 and has increased oil imports every year
since.
According to Liu
Keyu, vice president of the China Petroleum Economy and Technology Research
Institute,
China
's
oil consumption reached 389.3 million tonnes in 2008, up 5.1 percent from the
previous year. But during 2008, net oil imports approached 200 million tonnes,
up 9.2 percent.
Thus, a little
more than one half of oil consumed had to be imported.
Liu warned that
China
,
which was expected to continue raising its oil imports, would meet increasingly
tough energy-security challenges.
High and volatile
prices are among those challenges. During the four years before the financial
crisis erupted with full force in late 2008, world crude prices soared. Prices
reached a record high of 147.27 U.S. dollars per barrel on July 11, 2008. These
high prices meant that many areas of the country lacked enough oil.
Price changes
affect the economic viability of CTL projects, but the issue of energy security
persists.
In 2003, when
world oil prices were high and supply was tight, Chinese companies crowded into
CTL projects. The central government called for a series of pilot CTL projects
during the 11th Five-Year Plan period (2006-2010) to lay the foundation for
industrial-scale production.
"It is very
important to promote industrial-scale coal liquefaction," said Zhao
Shuanglian, vice-chairman of the Inner Mongolia Autonomous Region. With CTL
projects, "we can turn coal mines into oil fields to ensure energy
security for
China
."
Take the Shenhua
direct CTL facility. The project, which will have an annual capacity of 5
million tonnes, will be implemented in two stages.
In the first
stage, there will be three production lines with combined annual capacity of
3.2 million tonnes. The first pilot production line, which proved successful in
the December trial, will be able to convert 3.5 million tonnes of coal annually
to 1.08 million tonnes of diesel oil and naphtha, equivalent to a 100
million-tonne oilfield in annual output.
According to
Zhang Xiwu, board chairman of Shenhua Group, if everything goes smoothly with
the first 1 million-tonne pilot production line, the business will build two
more lines of about the same size, for a planned total of 3.2 million tonnes.
SPEED UP
INDUSTRIAL-SCALE OUTPUT
Li Yongwang said
technology and demand in
China
had matured enough to support CTL projects. The country had also independently
developed direct and indirect CTL technologies.
Li Shuangwang,
board chairman of Yitai Group, said the business would continue to run trials
and make improvements, given the success of its trial run.
"We'll work
to get the production operating stably in September. After that, we will
officially turn it into a fully-loaded operation. We will upgrade the equipment
and apply new-generation liquefaction technology to lift output to 600,000 tonnes
a year.
"If it goes
smoothly, we will expand the coal-to-oil base to an annual output of 5 million
tonnes in three stages," said Li.
He said the Yitai
Group also planned to extend the industrial chain by cracking naphtha from the
CTL facility into ethylene, which was a higher value-added product.
The other CTL
projects are also moving ahead. Lu'an plans to expand its 160,000-tonne
indirect CTL facility into a 3 million-tonne project, if it conducts a
successful trial in the near future. Ultimately, it intends to develop a
coal-to-oil base with a gross annual output of 15 million tonnes by 2020.
Yanzhou Mining
Group and Xuzhou Mining Group, in eastern
China
, also plan CTL projects.
Yanzhou began
work on a 1 million-tonne indirect CTL plant in February
2006 in
Yulin
City
,
Shaanxi
Province. It has conducted environmental reviews and is awaiting approval from
the National Development and Reform Commission,
China
's top planning agency. The
Yanzhou project would have two stages, each with annual output of 5 million
tonnes, the group said.
Also, about 10
provinces or autonomous regions, including
Xinjiang
,
Shandong
,
Shaanxi
,
Guizhou
and
Ningxia, are planning CTL projects.
Taking all these
plans into account, industry analysts estimate
China
will have an annual CTL
capacity of 30 million tonnes to 50 million tonnes in 2020.
WORLD CONDITIONS
CHANGE
However, oil
prices are far off their mid-2008 highs, hovering at about 50 U.S. dollars per
barrel now, and lower prices can change the economic environment of these
capital-intensive projects.
To reduce the
risk of having excessive, uneconomic capacity, the NDRC announced policies as
early as 2006, banning projects with annual output below 3 million tonnes. In
September 2008, the NDRC followed up with a circular, ordering a halt to almost
all projects except for the Shenhua Group's direct CTL project and an indirect
CTL plant proposed in northwest
China
's
Ningxia.
The directive,
combined with the impact of the global financial crisis, cooled enthusiasm for
many CTL projects in
China
.
However, Yitai Group and Lu'an managed to keep their projects on the list.
NEW ECONOMIC
REALITIES
According to Li
Yongwang, it takes 3.5 tonnes of coal to produce 1 tonne of oil under the
direct process and 4.02 tonnes under the indirect process, at least in the
pilot projects.
However, it's not
just oil prices that have changed. Domestic coal prices have doubled since some
of the pilot programs got under way, meaning that CTL project costs have also
surged. Li said the higher coal price would make it tough for many CTL projects
to be profitable.
Based on current
coal prices, the costs of an indirect CTL plant would be about 50 U.S. dollars
per barrel. Larger production scales and better technology could, in time, help
reduce the volume of coal needed. In that case, the cost might fall closer to
40 U.S. dollars per barrel, said Li.
DOWNTURN WON'T
LAST
Zhao said he
still believed in the future of the CTL industry.
"It is
widely acknowledged that oil prices will rise again in the long term, because
oil is a strategic resource," said Zhao.
He added:
"Chinese companies building coal-to-oil projects are strong, with large
coal reserves, and they can be competitive. If they can increase their
economies of scale and extend their production chains to produce higher
value-added products such as ethylene, the coal-to-oil projects have a good
chance to be profitable."
(http://news.xinhuanet.com/english/2009-04/05/content_11135751.htm)
April
15 (Shanghai Daily) --
China
aims to build emergency petroleum reserves that could meet 90 days to 100 days
of consumption, said Zhang Guobao, head of the National Energy Administration.
The
target is equivalent to the level of the Organization for Economic Cooperation
and Development, which includes 30 nations including the
United States
,
Germany
and
Japan
,
Zhang was quoted by a newsletter of China National Petroleum Corp as saying
yesterday.
China
is taking advantage of the drop in oil prices, now at around US$
50 a
barrel, to build stockpiles. They had
hit a record high of US$
147 in
July.
China
's net crude imports rose to 15.87 million tons, or 3.73 million
barrels a day, in March, the highest in eight months, customs data showed on
Friday.
"Strategic
oil stockpiling to exploit the bottom of the price cycle, as well as normal
commercial purchases, might have accounted for this higher-than-expected March
import figures," said Mirae Asset analyst Gordon Kwan.
The
government has filled the first batch of four petroleum reserves along the east
coast, which hold the equivalent of 30 days of oil imports, the newsletter
said.
It
plans to start building eight storage sites in the second phase this year,
which will include some underground caverns and bases in inland regions, Zhang
said.
China
Shipping (Group) Co President Li Shaode had earlier proposed the government use
some of its foreign exchange reserves to invest in floating oil reserves.
(http://www.china.org.cn/business/2009-04/15/content_17611587.htm )
Profits of
China
's major oil companies rise as demand recovers
April
25 (Xinhua) --
China
's
top five oil companies saw profits up 13.2 percent in March from the same
period a year ago, as stimulus package pushed up energy demand, according to a
report released by the China Petroleum and Chemical Industry Association
(CPCIA).
Their
March profits rose 160 percent from February to 28.25 billion yuan (4.15
billion U.S. dollars), according to the report released on Thursday.
The
"top five" includes China National Petroleum Corporation, China
Petroleum and Chemical Corporation, China National Offshore Oil Corp, Sinochem
Corporation, and Shaanxi Yanchang Petroleum (Group) Co. Ltd.
The
negative impacts of the global financial crisis on China's petrochemical sector
was deepening, but the month-on-month figure showed signs of recovering as
prices of some petrochemical products began to stabilize, said the report.
Analysts
said the profit increase was due to the government decision to raise the prices
of oil products. PetroChina's president Zhou Jiping said last month that the
price rise would add 1.26 billion yuan of profits for the company every month.
However,
the industrial value through January-March dropped 14 percent from a year ago,
to 1.26 trillion yuan. The figure for March alone was 498.35 billion yuan, down
8.4 percent year on year, according to the report.
It
is the first time in more than a decade that the petrochemical sector has seen
declines in both industrial value and sales revenue. It is likely that the
falling trend would continue in the second quarter, said Feng Shiliang, CPCIA
deputy secretary.
He
said the exports would continue to deteriorate, and the overcapacity would
still be prominent.
(http://news.xinhuanet.com/english/2009-04/25/content_11253623.htm )
April 30 (Shanghai Daily) -- The first stage of the
pipeline to deliver gas to
Shanghai
from
southwestern
China
's
Sichuan
Province
is expected to be completed
today.
The
1,702-kilometer pipeline is expected to be completed during next year's World
Expo in
Shanghai
.
The
pipeline will be able to supply 12 billion cubic meters of gas annually, or 17
billion cubic meters of pressurized gas, to help relieve
Shanghai
's tight gas supplies.
The
pipeline starts at the Puguang Gas Field in
Sichuan
and travels through
Chongqing
Municipality
and the provinces of
Hubei
,
Anhui
,
Zhejiang
and
Jiangsu
.
One
stage of
Shanghai
's
two stages of the pipeline - a 14.1-kilometer pipeline connecting the gas
network in Qingpu District to a gas pressure regulating station in Songjiang
District - is nearly complete.
Construction
of the second stage - a 34-kilometer pipeline from the station in Songjiang's
Tahui
Town
to the district's
Chedun
Town
- will start at the
end of June.
The
Shanghai Gas Group said the city will consume 8 billion cubic meters next year.
At present, the city mainly relies on gas from the
East
China Sea
and the western Xinjiang Uygur Autonomous Region. This
year
Malaysia
started supplying gas.
The
city has an emergency gas reserve of 10 days, up from three days in 2007, the
group said.
(http://www.shanghaidaily.com/sp/article/2009/200904/20090430/article_399413.htm )
April 28 (China Daily) -- One of the many
mutual interests of
China
and the European Union (EU) is to reduce, if not eliminate, the threat of
climate change.
Tackling climate change can help unlock
investment that will accelerate global recovery from the deepening recession
and ease our dependence on fossil fuel imports.
Battling the problem requires more or less
the same kind of measures needed to cut our dependence on energy and improve
the environment. We need to save energy and become energy efficient.
The EU agrees that developed countries have a
huge responsibility on their shoulders, which is why it has committed to cut
greenhouse gas emissions by at least 20 percent from the levels in 1990 by
2020.
The EU is prepared to move to a 30-percent
reduction as its contribution to a new global agreement, provided other
developed countries commit to similar emission reductions and developing
countries contribute adequately in line with their sustainable development
needs.
The global community will continue to follow
the principle of common but differentiated responsibilities, under which all
countries contribute to tackling climate change as per their capabilities.
Chinese leaders recently stressed that
China
,
being a responsible member of the global community, will contribute its fair
share in battling climate change. So there is clearly ground for optimism.
The EU welcomes the measures
China
is already taking to improve energy efficiency across its economy, increase
renewable energy and forest coverage. Not only has China fixed a number of key
short to medium-term targets but also put in place policies, including
mandatory regulations and economic instruments, that have proven effective.
We also look forward to seeing substantial
focus on these goals during the implementation of the economic stimulus package
launched last November. If
China
is successful in steering its economy onto the path of low carbon development,
it will enable the country to become a leading player in markets for low-carbon
technology, lead to new trade opportunities and create a better standard of
living for its citizens.
While there is tremendous potential to cut
energy use and emissions by using technology that already exists in
China
or can be transferred from developed countries, it is clear that we also need
concerted efforts on research, development and demonstration (RD&D).
It would be desirable to at least double
global energy-related RD&D by 2012 and increase it to four times its
current level by 2020, with emphasis on low-carbon technologies, especially
renewable energy sources. It will involve global research coordination, science
and technology cooperation and reduction in barriers for environmental goods
and services in the market.
The EU and
China
have already embarked on a
strategic energy and climate technology cooperation. Last January, we agreed to
establish a center for clean energy technologies in China, while later this
year we will conclude the joint research that has been going on for three years
to prepare the ground for a carbon capture and storage demonstration project
and move to site-specific design and feasibility studies with a view to having
large-scale demonstration in China around 2015 (alongside up to a dozen plants
in Europe). In order to meet the needs of skilled staff operating clean and
renewable energy installations, we recently agreed to establish a vocational
training institute in
China
as well.
In the current economic situation, it is
particularly important that climate change goals are delivered
cost-effectively. In this context, the EU firmly believes that a global carbon
market is the most effective approach.
China
and
the EU have both benefited from the Clean Development Mechanism (CDM). Indeed
the two sides have been the most important protagonists of this mechanism since
the Kyoto Protocol came into force. The sale of emission credits by
China
has allowed a great number of investments to take place in the country in
energy saving and diversification. However, CDM projects are not delivering
emission cuts at the scale that is required.
The EU is aware that developing countries
will need additional financial and technological assistance to complement the
carbon market. We believe financial support for mitigation should be based on
"low carbon development strategies" produced by developing countries
themselves. In the context of
China
,
this strategy should be fully integrated into the overarching Five-Year Plans
and cover all key emitting sectors.
A recent report by the
Chinese
Academy
of Sciences (CAS) is very encouraging in this respect. It argues that a low
carbon development path with Chinese characteristics shall be built containing
clearly defined targets and a roadmap of priority actions, to be implemented as
pilots in representative regions/cities and key sectors, as part of the
national strategy for economic and social development.
CAS proposes that
China
's low carbon economic
development target for 2020 be set at 40-60 percent reduction of energy
consumption per unit of GDP over the 2005 level and that carbon dioxide
emissions per unit of GDP be reduced by about 50 percent. It foresees a peak in
national greenhouse gas emissions between 2030 and 2040.
Furthermore, it advocates participation in
international sectoral energy efficiency benchmarking and Chinese leadership in
"clean coal" technology with carbon capture and storage.
Both
China
and the EU want a successful
conclusion at the Copenhagen Summit, scheduled for the end of this year. The EU
appreciates
China
's
constructive approach to the negotiations.
Dialogues between China and the EU on climate
change, and the general upgrading of our Strategic Partnership, with two
EU-China Summits planned this year, will be very helpful in fostering mutual
understanding and a more common vision in the run up to Copenhagen.
Last month,
US
President Barack Obama wrote in
a letter to the EU President Jose Manuel Barroso that the future of our
children and our planet depends on what we do to address this challenge in the
months and years ahead.
I couldn't agree more.
Author, Serge Abou, who is Ambassador and Head of the Delegation
of the European Commission to
China
.
(http://www.chinadaily.com.cn/opinion/2009-04/28/content_7723170.htm )
April 13 (
China
daily) -- The year 2009 may
well be remembered as the Year of Climate Cooperation. Shortly after the New
Year, the inauguration of Barack Obama heralded a new effort to reduce
America
's greenhouse gas emissions, and to place
special emphasis on working with
China
on climate issues. In a few
more months, the world's nations will gather in
Copenhagen
,
Denmark
,
to try to forge a global agreement to prevent catastrophic climate change.
The tide of history is shifting towards a
belated but crucial effort to reduce global greenhouse gas emissions.
China
has a uniquely important opportunity to help shape this momentous new chapter
in history, one that can be grasped by taking a new look at its national policy
on climate change.
The Chinese government's 2008 "White
Paper on
China
's
Policies and Actions on Climate Change," together with the 2007 National
Climate Change Program, outlines substantial efforts to improve energy
efficiency and reduce emissions.
China
has an opportunity to build
on this effort by formulating a visionary policy that will enhance its national
security, promote sustainable economic development and position it as a full
partner in one of the most important global efforts of our era.
A visionary national climate change policy
should be forward-thinking - too much time has been wasted in debates over the
carbon that is "embedded" in
China
's exports and the
responsibility of developed nations for the majority of historical global
emissions.
These arguments are not wholly without merit
but miss the point at a time when all nations, including
China
, must act quickly to build
energy-efficient, low-carbon economies or risk runaway climate change.
A national climate change policy should also
express
China
's
willingness, in time, to commit to greenhouse gas emissions reductions,
focusing initially on specific industrial sectors and, eventually, on
economy-wide "caps" on total emissions. This step is necessary since
battling climate change requires the decrease of absolute emissions of each
nation, as opposed to merely decreasing energy consumption per unit of GDP,
which is
China
's
current policy.
The policy should use a mixture of incentives
and mandates, to place
China
on the road to an energy transformation, away from conventional fossil-fuel
power generation and towards the use of renewable energy sources and energy
conservation measures.
China
will benefit from a bold and visionary climate policy in several areas
including enhanced security since the country will be in an increasingly
precarious position as a result of changing climate, particularly in terms of
water availability.
Most of the major river systems that feed and
water
China
,
India
, and
Southeast Asia
depend on meltwater from the Himalayan region. Climate change is endangering
this vital source of water for 60 percent of the human population. Himalayan
glaciers, which provide some 70 percent of the flow of major Asian rivers, are
melting at an extremely rapid rate; one study, published in the prestigious
journal Nature, predicts that the Himalayan-Hindu Kush region will start to
"run out of water" during the dry season. Besides disrupting
agricultural activities and destabilizing massive and volatile populations,
such a situation would imperil
China
's
economic growth.
Additionally, the aggressive pursuit of a
truly low carbon economy can help establish an era of unparalleled innovation
and economic prosperity. A study by CERNA, for example, shows that countries
that committed themselves to mandatory emissions reductions under the Kyoto
Protocol experienced increased levels of innovation in green technologies over
those that did not.
The depth and diversity of these economic
development opportunities are enormous;
China
can create millions of urban,
high-tech jobs in the manufacture, installation, operation and maintenance of
renewable power systems. It can also revive rural economies through the
development of sustainable agriculture practices. In all regions, huge amounts
of money can be saved as citizens breathe cleaner air and drink cleaner water,
reducing the incidence of some diseases.
Action on climate change is also an important
sign of membership in the international community. Climate change has emerged
as a global issue of paramount importance and by demonstrating that it is
prepared to act boldly to combat climate change ,
China
can help to reinforce its
image as a responsible nation. Two
Hunan
University
professors wrote in a
recent China Daily editorial that "developing a low-carbon economic is a
must as
China
continues to industrialize, not only for the nation's energy security but also
as part of an urgent international responsibility to address global climate
change."
By embracing this responsibility,
China
can gain recognition as a full partner in one of the most important global
efforts in human history, while also ensuring it has a seat at the table as a
global agreement to reduce greenhouse gas emissions is forged.
The fundamental value in a bold, visionary
national climate policy is that it builds the foundation for a sustainable
future.
China
stands to gain a great deal from becoming a leader in green technologies, a
resource-efficient economy, and a largely self-sufficient energy consumer.
China
's
current policy on climate change is significant and a step in the right
direction, but hopefully it represents merely a rough draft of a strategy equal
to the challenge of climate change.
Scott
Moore is a Fulbright Fellow with the Environmental Economics and Policy Study
Group at
Peking
University
. Julian Wong is an
independent energy analyst, founder of the Beijing Energy Network, and author
of the blog GreenLeapForward.com. The views expressed in the article are their
own
(http://www.chinadaily.com.cn/bizchina/2009-04/13/content_7670256.htm )
China
calls for green-technology transfer
April 30 (China Daily) - Developing nations
must have access to environmentally sound technology to fight global warming,
China
's
top climate change negotiator said yesterday.
But Su Wei said technology transfer was not
even mentioned during the first preparatory session of the Major Economies
Forum on Energy and Climate in
Washington
on Monday.
He said many climate change-related
technologies were unavailable at reasonable prices in developing countries and
this meant these technologies could not be employed in parts of the world where
they were needed the most.
Developed countries could play an active role
in promoting technology transfer by providing incentives to private firms, he
said.
"The preparatory session (on Monday)
touched on technology, research and development, and cooperation, but made no
mention of technology transfer," he said.
Xie Zhenhua, in
Washington
in the capacity of President Hu
Jintao's climate change envoy, said developed countries needed to set
greenhouse reduction targets for when the Kyoto Protocol expired in 2012.
The protocol sets binding targets for 38
industrialized countries and the European Union to reduce greenhouse emissions
between 2008 and 2012.
Countries are obliged to reduce their
collective emissions by at least 5 percent from a 1990 benchmark.
Leaders around the world are currently
scrambling to create a post-Kyoto climate change agreement.
Xie, vice-minister of the National
Development and Reform Commission, said: "Mechanisms dealing with
technology transfer, its adaptation and funding need to be established."
Su added that despite international
commitments to promote the transfer of technology, change was happening too
slowly to help developing nations in mitigating and adapting to the effects of
climate change.
Meanwhile, Xie said the United Nations
Framework Convention on Climate Change must be implemented effectively and in
full.
He said the key to success in the UN climate
change meeting in
Copenhagen
in December was
that climate change negotiations were dealt with in the spirit of a 2007
meeting in
Bali
.
The
Washington
meetings on Monday and Tuesday are the first of three preparatory sessions for
the Major Economies Forum on Energy and Climate Change.
Todd Stern, US special envoy for climate
change, said the meetings called for by US President Barack Obama were unlikely
to produce any breakthroughs but would provide the opportunity for leaders to
engage one another in a more informal and intimate way than is possible during
the larger proceedings organized by the UN.
(http://www.chinadaily.com.cn/china/2009-04/29/content_7727980.htm )
April 30 (China Daily) - The nation's
stimulus package has benefited energy conservation and emission controls with
energy used to generate growth dropping further in the first quarter, the
National Bureau of Statistics (NBS) has said.
Energy intensity, or the amount of energy
needed to generate per unit of GDP, dropped 2.89 percent year on year from
January to March. That compares with a drop of 2.62 percent in the first
quarter of 2008.
Overall energy consumption grew only 3.04
percent in the first quarter from a year earlier while the economy expanded 6.1
percent, the bureau said in a statement.
The NBS said the ratio of the services sector
in the overall economy rose 1.6 percentage points, while the industrial sector
dropped 1.9 percentage points. Also, the output of six energy-intensive
industries fell 12.5 percent from the previous year.
The figures show the stimulus measures have
aided efforts to increase energy efficiency, cut emissions and promote economic
restructuring, it said.
The government announced a $586 billion
stimulus package last November to prop up domestic demand and maintain growth.
But the huge spending plan sparked concerns that officials might compromise on
environmental protection and energy saving targets, given the emphasis on
growth.
Yet, analysts said little of the government's
spending has been allocated to high energy-consuming or highly-polluting
projects, while spending on environmental issues has been increased.
Capital requirements for projects such as
railways, airports and housing will be lowered to raise investment, said a
State Council meeting presided by Premier Wen Jiabao yesterday.
However, capital requirement for investments
in high energy-consuming or heavily-polluting sectors, such as aluminum
smelting, will be raised to prevent a rebound of production capacity in such
industries.
Of the 230 billion yuan the central
government has approved on stimulus spending over the past two quarters, 10
percent went toward energy conservation, emission control and environmental
protection projects, the National Development and Reform Commission said in a
statement yesterday.
The figures show the central government wants
to strike a balance between growth and economic restructuring, said Chi Fuling,
president of the
China
(
Hainan
) Reform and Development Research Institute.
The government may even increase spending on
energy saving and environment protection as it tries to facilitate industrial
transformation, Chi said.
According to the NDRC, the government has
earmarked 13 billion yuan in the next three years to expand sewage and garbage
disposal facilities to most townships. It has also allocated 4 billion yuan for
tackling water pollution in major rivers such as the Huaihe and the
Songhuajiang.
Forest
conservation and energy
saving projects get a combined 6 billion yuan.
The government has pledged to reduce energy
intensity by 20 percent by 2020 from 2005 levels; and chemical oxygen demand
(COD), a key index of water pollution, and emissions of sulfur dioxide (SO2), a
main air pollutant, by 10 percent between 2006 to 2010.
(http://www.chinadaily.com.cn/china/2009-04/30/content_7731543.htm )
April 27 (China Daily) -- Environmental
officials and researchers warn against further ecological degradation, because
local governments may be ignoring environmental standards as they implement
parts of the multi-billion-dollar stimulus plan.
These official and researchers strongly urge
governments at various levels to follow the central government's call for
keeping the stimulus deal green and balancing economic growth and environmental
protection.
The China Council for International
Cooperation on Environment and Development, a top-notch advisory council for
the central government, has sent repeated warnings to the highest-level
decision-makers since last November, when
China
launched its
four-trillion-yuan stimulus package.
A team of experts at the council said last
week that even some sound practices and systems already well-established had
been brushed aside as local governments strive to keep fast growth and create
more jobs.
"Thousands of projects have been given
the green light in such a short time and these probably have many environmental
loopholes," Liao Ming, senior research fellow at the China Society of
Economic Reform think-tank told China Business Weekly.
Li Ganjie, vice-minister of Environmental
Protection also said he is concerned about whether the provincial and local
governments are even able to uphold environmental standards when implementing
stimulus plans.
He said about one-tenth of the 230 billion
yuan the central government has spent from January to March went to
environmental protection, energy efficiency and emissions control.
The Washington-based World Resources
Institute has found 38 percent of
China
's four-trillion-yuan stimulus
package is "directly or indirectly" linked to green industries and
environmental protection, making the country's stimulus plan one of the
greenest launched since the global economic downturn.
But environmental officials and researchers
have expressed concern about whether local governments can actually turn the
green plans on paper into reality.
Last November the council and its panel of
experts submitted a report to the central government, including Premier Wen
Jiabao, warning that local governments were likely to ignor the environmental
impact in their haste to launch new projects to boost economic growth.
The panel suggested the central government
should strengthen environmental inspections.
Liao Ming, the researcher, blamed the local
governments in parts of
China
for clinging to the outdated mindset that higher economic growth trumps all
other priorities.
Liao said there are several negative trends.
One is that the provincial and local governments in some regions have ignored
the "veto system," an accountability system started in 2007 linking
leading governmental officials' performance in energy saving and emission
control to their career promotion.
"Another trend is that, in the rush to
launch investment projects, local governments are not doing careful
environmental impact assessments," said Liao.
"This is too risky," he said.
Daniel Dudek, chief economist of the US-based
Environmental Defense Fund has urged decision-makers to bear the lessons of the
financial crisis in mind. "It was a failure to live within our
means," Dudek said.
"When implementing stimulus plans, we
should look at the environmental budget we have," he said.
(http://www.chinadaily.com.cn/bizchina/2009-04/27/content_7718226.htm )
April 7 (Xinhua) –About 2.9 million people of
Hong Kong
participated in Earth Hour 2009, a
World Wide Fund for Nature's (WWF) environmental protection event, announced
WWF Hong Kong on Tuesday.
According to a survey commissioned by WWF, 58
percent of 984 people aged between 18 and 64 interviewed across
Hong Kong
said they participated in Earth Hour.
This amounts to approximately 2.9 million
people, which significantly exceeded the initial target of 1 million people.
At 8:30 p.m. on March 28, when Earth Hour was
held, over 1,800 buildings, 600 companies and organizations, 160 schools and
all universities switched their lights out in support of the event.
The survey showed that 85 percent of
respondents said that Earth Hour increased their awareness of taking actions on
climate change.
Electricity consumption in Hong Kong dropped
by 5 percent during the one-hour event, according to figures provided by the
two local electricity companies, as compared with the same time the week
before, which was on March 21.
"Five percent reduced electricity
consumption over the period, 170 tons of Carbon dioxide have been saved, which
is equivalent to 340 trees absorbing carbon over 40 years," said William
Yu, WWF Hong Kong's Head of Climate Program.
He said that Earth Hour was not so much about
energy saving for one hour on one night, it was about every one taking small
actions which could lead to big changes.
Over 4,000 cities and towns in 88 countries
and regions had joined Earth Hour 2009.
(http://news.xinhuanet.com/english/2009-04/07/content_11144957.htm )
Shenhua to launch
China
's first carbon capture
project
April 7 (Reuters) --Beijing-
The Shenhua Group, China's biggest coal producer, is planning to launch the
country's first carbon capture and storage (CCS) project, according to a
government statement.
China's first commercial CCS facility will be
built at the company's 24.5 billion yuan ($3.58 billion) coal-to-liquids plant
at Ordos in Inner Mongolia, which is expected to go into full operation later
this year, the State-Owned Assets Supervision and Administration Commission
said on its website.
With
China
still dependent on coal to
meet the bulk of its energy needs, carbon capture and storage has been
identified as a crucial element in the country's efforts to reduce greenhouse
gas emissions, currently believed to be the highest in the world.
However, there are still doubts about the
commercial and environmental viability of CCS technology, which has not yet
been ratified by the United Nations Framework Convention on Climate Change amid
concerns about the long-term safety of underground storage sites.
The Chinese government curtailed its coal
liquefaction program last year amid concerns about pollution and excessive
water consumption. Shenhua's
Ordos
plant is
one of only two major facilities that has been allowed to go ahead.
David Trimm, an expert with
Australia
's Commonwealth Scientific
and Industrial Research Organization, said that carbon sequestration will play
an important role in the development of coal-to-liquids technology.
"But the problem is where to sequester
it. Usually they put it in a saline aquifer, but I am not sure if there is
anywhere suitable in
China
,"
he said.
Scientists behind a pilot CCS project
launched by
China
's
Ministry of Science and Technology and the British Geological Survey in 2007
have also been looking into the possibility of storing carbon in depleted oil
and gas fields and unmined coal seams.
The statement said that Shenhua's carbon
capture facility would be put into full operation within two years."
(http://www.reuters.com/article/environmentNews/idUSTRE5370EY20090408 )
