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

iCET organized California energy delegation to visit China.

On April 18th – 23rd, iCET organized California energy delegation to visit China. Members of the delegation include commissioner and vice chairman of California Energy Commission James D. Boyd, Executive Director of California Alternative Energy and Advanced Transportation Financing Authority Jan E. McFarland, President of Goldman Sachs Cogentrix Energy Larry M. Kellerman and other senior governmental officers of California and investors. Led by iCET’s Executive Director Dr. Feng An, the delegation visited BYD Auto, ENN Group, China Guodian Corporation, Coda-Lishan EV Joint Venture and other domestic new energy enterprises. The delegation and enterprises exchanged ideas on new energy cooperation between China and US, and discussed bilateral energy investment and trade opportunities in the future. The delegation also visited Low Carbon Energy Lab of Tsinghua University, Jiangsu Department of Commerce, Shenzhen Nanshan Government, and Energy and Environment Research Institute of Peking University Shenzhen Graduate School.

On April 21, California energy delegation visited Guodian Headquarter in Beijing and met with Mr. Zhu Yongfan, President of Guodian Group, and Mr. Ye Weifang, President of Guodian KH Group.

On April 22, California energy delegation and iCET team visited Low Carbon Energy Lab of Tsinghua University.

iCET facilitated the cooperation of the 500MW Solar Park Project between China and California.

On April 21, Californian energy delegation visited China Guodian Corporation in Beijing. During the visit, Guodian group and California energy delegation signed “Cooperation Agreement on 500MW Solar Farm Project in CA.” The 500MW Solar Park Project will become the first pilot project under “Framework Agreement on Strategic Cooperation in Energy & Environment” signed between California and Jiangsu Governments. This Project will create clean job opportunities, speed up the realization of California's Renewable Portfolio Standard (RPS), and will further push ahead with the bilateral cooperation and economic developments between Jiangsu and California. Through actively coordinating the public relations among relevant governmental departments and agencies in California and Jiangsu, getting significant political and policy supports, iCET played a leading role in facilitating this cooperation.

On April 21, iCET Excutive Director Dr. Feng An was with Mr. Ye Wefang, General Manager of Guodian Kehuan Corporation and Mr. James D. Boyd, Vice Chairman of California Energy Commission at the headquarter of Guodian Corporation in Beijing.

On April 21, Guodian Corporation and California Delegation singed “Letter of intent for Solar Project in CA” at the headquarter of Guodian Corporation.

iCET delivered speech at “Green Fuels & Vehicles China 2010”.

On April 8th – 9th, the Green Fuels & New Vehicles China 2010 was held successfully in Shanghai. This event highlighted alternative fuels, new energy vehicles, infrastructure development, power battery, powertrain, motor drive, auto parts and charging station to enlighten the relevant industry participants with technical and business insights. Dr. Feng An, the Executive Director of iCET presented at the event panel “Industrialization & Commercialization of the Alternative Fuels and Vehicles” and delivered the speech entitled “the No.1 auto market in the world: China – low carbon fuel and auto efficiency policies”.

iCET supported “The 2010 International Low Carbon Development Forum (Shenzhen)”.

On April 16th – 19th, The 2010 International Low Carbon Development Forum (Shenzhen) was convened by the Shenzhen Municipal Government and Peking University in Shenzhen. The major goal of this event was to provide a platform for dialogue, strategizing, and collaboration among governments, academics, and industries that are key players in the current low-carbon development movement. iCET supported the event actively and organized four panel discussions: Low Carbon Transportation - Fuels and Infrastructure, Low-Carbon LED Lighting – Lighting Standards and Policy, Capacity Building on Quantifying GHG Emission: China Climate Action Partnership, and Land Use Credit for Low-Carbon Development. As Moderators and panelists, iCET’s President and Executive Director Dr. Feng An, Program Director Dr. Yufu Cheng, General Manager of China Operation Fang Fang and Climate Change Project Manager Lucia Green Weiskel attended panel discussions and presented iCET’s achievements in the field of Low Carbon Development to audiences.

iCET’’s Climate Change Project Manager Lucia Green Weiskel expressed her opinion at panel “Capacity Building on Quantifying GHG Emission”.

iCET’s General Manager of China Operation Fang Fang made speech at the forum.

^{GENERAL ENERGY ISSUES}

Premier Wen urges development of renewable energy.

April 22 (Xinhua): BEIJING - Chinese Premier Wen Jiabao Thursday called for more efforts to develop renewable energy in an effort to cope with rising domestic fuel demand and severe energy shortages.

"We must accelerate the development and use of renewable energies to ensure the country's energy security and better cope with climate change," Wen said at the first meeting of the National Energy Commission in Beijing.

China should take measures to ensure non-fossil fuels would account for 15 percent of China's energy consumption in 2020, he said.

Wen said the country would make it a binding target to cut carbon dioxide emissions per unit of gross domestic product by 40 percent to 45 percent by 2020 from 2005 levels.

"The target will be incorporated into the country's long-term economic and social development plan," he said.

Wen also urged more efforts to enhance innovative capacity on energy technology to promote sustainable social and economic development.

The government set up the National Energy Commission, a government agency headed by Premier Wen Jiabao, in January to better coordinate energy policy.

The commission is responsible for drafting the national energy development plan, reviewing energy security and major energy issues and coordinating domestic energy development and international cooperation.

http://news.xinhuanet.com/english2010/china/2010-04/22/c_13263406.htm

NDRC works out green measures.

April 21 (China Daily): BEIJING - More policy tools are being worked out to encourage energy conservation and the use of renewables to propel the development of China's energy-saving industries, an official from the National Development and Reform Commission (NDRC) said.

Speaking at an energy conference, Xie Ji, deputy director of environmental protection and resource conservation division at the nation's top economic planning agency, outlined the policies it is drafting for the 12th Five-Year Plan (2011-15).

Policy tools tailored to energy service industry are likely to include a national fund sponsored by the central government; a set of tax incentives, such as tax exemptions and tax breaks; an improved accounting system with regard to energy conservation expenses; and at the regional level, more energy-related special-purpose services from financial institutions.

Unparalleled progress has been made in energy conservation and emissions reduction thanks to rising central government support and public awareness across the nation, the official said. The momentum will continue and generate new achievements.

During the 11th Five Year Plan (2006-10), while average annual gross domestic product (GDP) growth was 10.72 percent, annual energy consumption growth remained at 6.51 percent. In other words, the ratio of energy consumption in proportion to GDP was 0.75 on average, "significantly lower" than during any of the previous five-year plans, Xie said.

In the meantime, a "responsibility system" has been developed to hold various government agencies to account for national and regional targets in energy saving and emission reduction. As a result, they have rolled out their own policies and matching technological solutions, Xie said.

Nationwide, 10 programs have resulted in a total energy saving capacity of up to 260 million tons of standard coal since 2006, exceeding the original goal of 240 million tons of standard coal. In a separate effort, large companies in nine energy-intensive industries have accumulated a total energy saving capacity of 130 million tons of standard coal.

Efforts in the last four years will leave an institutional legacy for the 12th Five-Year Plan, the official said, to promote energy saving and green energy under market economy conditions.

Those efforts have not only changed the trend in energy use against GDP growth for a country still in a rapid process of industrialization, he said. They are also helping China develop many new industries and thereby transform its entire economy, "to make the goal of a sustainable society more achievable".

However, tough challenges remain for the next stage of development, Xie pointed out, such as growing pressure on greenhouse gas emission cuts, rising green tariffs in the global market, and fiercer competition, in various forms, in the name of energy conservation and environmental protection.

Energy-related new services also face difficulties and restrictions, most noticeably a lack of funds, a high tax burden, policy failures, and competition barriers, he said.

http://www.chinadaily.com.cn/bizchina/2010-04/21/content_9756184.htm

Green energy needs huge spend.

April 20 (China Daily): BEIJING - China needs an additional investment of $64 billion annually over the next two decades to implement an "energy-smart" growth strategy, the World Bank said.

Such investment should be aimed at making the power and transport sectors more efficient and developing renewable energy, the bank said in its latest report.

Besides China, East Asia's other five major energy-using countries - Indonesia, Malaysia, the Philippines, Thailand and Vietnam - need to invest a total of $16 billion to get onto the sustainable energy path.

However, mobilizing such huge amounts of financing will be a major challenge for the region, the bank said, urging developed countries to transfer substantial financial help and low-carbon technologies.

It is estimated that approximately $25 billion annually would be required for the region in concessional financing from developed countries to cover the region's incremental costs and the risks of energy efficiency and renewable energy, the bank said.

"The technical and policy means already exist for the necessary transformation in East Asian countries - what's needed is political will and unprecedented international cooperation to meet the financing needs," said Wang Xiaodong, a senior energy specialist for the World Bank.

The bank noted that developing a low-carbon economy is a key part of China's national development strategy, and China has made "remarkable" progress on this front.

"China is voluntarily committed to reducing its carbon intensity per unit of gross domestic product (GDP) by 40-45 percent by 2020 compared to the 2005 level," said Wang. "And the Chinese government's target of a 20 percent reduction in energy intensity from 2005 to 2010 would reduce annual carbon dioxide emissions by 1.5 billion tons by 2010, five times the 300-million-ton reduction of the European Union's Kyoto commitment."

However, the bank said China has primarily relied on effective administrative regulations to improve energy efficiency during the 11th Five-Year Plan (2006-10).

A more balanced approach that brings in market-based mechanisms and financial incentives to capture remaining energy efficiency potential would help the country achieve its objectives during the 12th Five-Year Plan (2011-15).

http://www.chinadaily.com.cn/business/2010-04/20/content_9751344.htm

China powers up nuke generators.

April 13 (China Daily): Beijing – China plans to increase its nuclear power capacity by as much as 800 percent by 2020, helping it to achieve its environmental goals by reducing its dependence on coal.

Currently, China has 11 nuclear reactors in operation, supplying 9.1 gigawatts (gW) of power, or about one percent of the country's electricity.

Another 28 nuclear reactors have been approved, of which 20 are under construction, Sun Youqi, vice-president of China National Nuclear Corp, said in March.

China has established three bases for nuclear power, at Qinshan in Zhejiang province, Daya Bay in Guangdong province and Tianwan in Jiangsu province.

China plans to increase its nuclear power capacity to 70-80 gW by 2020, which will account for 8 percent of the country's total power capacity, Huang Li, an official with the National Nuclear Administration, told the 10th China International Petroleum & Petrochemical Technology and Equipment Exhibition in Beijing in March.

Given the rapid development of the industry, these figures might be conservative, she added.

Previously, China had planned to increase its nuclear capacity to 40 gW by 2020, which would account for 4 percent of its total power capacity.

"As a country which relies on coal for about 70 percent of its energy consumption, China has accelerated the development of its nuclear power industry. This is in accordance with the country's move to build an environmentally-friendly economy," explained Lin Boqiang, a professor at Xiamen University.

Coal-fired power plants are a major source of China's carbon emissions. The use of more nuclear energy can help the country achieve its goal of reducing carbon dependence as a percentage of its gross domestic product by 40 to 45 percent by 2020, Lin said.

All of the nuclear reactors now under construction are in China's more economically developed coastal areas. In addition, many inland provinces are also planning to develop nuclear projects.

The first batch of inland nuclear power plants will include the Taohuajiang nuclear project in Hunan province, the Xianning project in Hubei province and the Pengze project in Jiangxi province. At least one of these three projects is expected to begin construction this year.

Six of the nuclear reactors now under construction will be among the first in the world to use third-generation technology. Four of them will use AP1000 technology from US-based Westinghouse and two will use European Pressurized Reactor technology from Areva, a French company.

Located in Zhejiang, Shandong and Guangdong provinces, the third generation plants will have higher safety standards and longer life expectancy.

In order to promote the use of third-generation technology, China in 2007 established the State Nuclear Power Technology Corp (SNPTC), which will oversee the use of advanced foreign technology and coordinate indigenous development.

Construction of the company's four third-generation reactors is going smoothly, SNPTC Chairman Wang Binghua told China Daily. The first reactor, which is located at Sanmen in Zhejiang province, is expected to start generation in 2013.

Indigenous development is also underway. SNPTC and China Huaneng Group recently inaugurated a joint venture to build and operate a demonstration project, which uses a technology called CAP1400.

The project is located in Weihai, Shandong province. The CAP1400 technology is based on Westinghouse's AP1000 technology. Construction of the project is expected to start in April 2013, with power generation scheduled for 2017.

http://www.chinadaily.com.cn/china/2010hujintaotour/2010-04/13/content_9719228.htm

China, EU unveil new clean energy project.

April 30 (Xinhua): BEIJING - China and the European Union on Friday inaugurated a new cooperative project on clean energy, in a further effort to jointly tackle energy efficiency and climate change.

European Commission President Jose Manuel Barroso and Zhang Guobao, head of China's National Energy Administration, witnessed the inauguration of the Europe-China Clean Energy Center based in Tsinghua University.

The center will act as a platform to provide support for both Chinese and European energy sector key players, and its objective is to promote increased use of clean energy.

"The launching of the center, another flagship of our cooperation, is a major step in our common efforts to shape a more sustainable, environmental friendly and efficient energy sector," said Barroso.

"The European Union can not achieve its energy and climate change objectives alone. We want to make partnership with friends around the world...There are now very important prospects for developing many concrete projects within China and the European Union," Barroso said.

Zhang, also vice minister of China's National Development and Reform Commission, said China and the EU shared similar targets on clean energy and enjoy bright future for energy cooperation.

"As of the end of 2009, China had introduced about 30,000 technological projects from the EU, among which wind, photovoltaic and nuclear power projects account for a rather big proportion," Zhang said.

Zhang said despite the fact that China did not lag behind on clean energy development, it needed more efforts to restructure its energy sector and develop clean coal technology as coal accounted for 70 percent of China's primary energy sources.

CLOSER TIES

Energy cooperation is just one of issues Barroso is seeking to address during his first visit to China after he took the second term as European Commission president.

Barroso is visiting on the 35th anniversary of diplomatic ties between the EU and China.

"China and Europe, with great history, can make an even greater future," said Barroso in a speech in Tsinghua university.

During a press conference Friday, before his departure to Shanghai for the opening ceremony of the World Expo, Barroso also said the two sides had agreed to strengthen efforts in coping with global issues, and work together to realize "sound, stable and sustainable" global economic growth.

He described his Thursday talks with Chinese Premier Wen Jiabao as "fruitful and open", saying they had a "candid conversation" and discussed bilateral ties, global issues such as energy, climate change, security, finance and monetary affairs.

He praised Wen's Thursday meeting with EU entrepreneurs, in which Wen pledged to offer fair conditions for Chinese and EU companies, to facilitate dialogue between foreign companies and the Chinese government, and encouraged foreign investors to seek business opportunities in China's economic reform.

Barroso will attend the opening ceremony of the Shanghai World Expo, the first expo the EU will participate in outside Europe.

http://news.xinhuanet.com/english2010/china/2010-04/30/c_13274098_2.htm

Offshore wind power sets sail.

April 24 (China Daily): Beijing - China will choose the sea off eastern Jiangsu province to build the country's first batch of offshore wind power projects, an energy official said on Friday.

The four wind power projects include two near shore plants, each with installed capacity of 300 megawatts (mW), and two built on tidal flats with a capacity of 200 mW each, said Shi Lishan, deputy director of the new energy department under the National Energy Administration (NEA).

Public bidding for the four projects will start at the beginning of next month, he said.

"Construction of offshore wind power projects will be one focus of China's wind power industry in the future. As the country boasts rich offshore wind energy resources, China has great potential in this field," said Shi.

Shi added that the construction of offshore wind power projects costs much more and requires more complex technology compared with wind power projects built on land.

China has finished construction of a pilot offshore wind power project near Shanghai. Investment of the project is 2.5 times of an on land project with the same capacity, said Shi.

China's wind power industry has seen over 100 percent year-on-year growth in the past four years. The country's installed wind power capacity has reached 25 gigawatts (gW), the second-largest in the world.

The country plans to build seven wind power bases with a minimum capacity of 10 gW each by 2020, in a move to further increase the use of the clean energy.

The seven bases are: Jiuquan in Gansu province, Hami in Xinjiang Uygur autonomous region, Hebei province, western Jilin province, eastern Inner Mongolia, western Inner Mongolia, and Jiangsu province.

Once completed in 2020, the seven bases will have combined capacity of around 120 gW, when the country's total power capacity is projected to be 1,500 gW, Shi told China Daily earlier.

Construction of these bases would require an investment of around 1 trillion yuan, he said.

However, with the rapid development of the wind power industry, some problems in the sector also emerged. For instance, it is hard for many finished wind power plants to connect to the grid.

Commenting on the issue, Shi said the government needs to improve its planning for the development of wind power and grid capacity.

"In my opinion there is no problem in technology for wind power plants to connect to the grid," he said.

http://www.chinadaily.com.cn/bizchina/2010-04/24/content_9770604.htm

CNPC hastens new energy development.

April 1 (China Daily): BEIJING - Oil producer's plan in line with China's efforts to utilize other fuel alternatives

China National Petroleum Corp (CNPC), the country's largest oil and gas producer, will speed up development of new energies including coalbed methane, fuel ethanol and oil sands, aiming to set its annual oil-equivalent production capacity at 1.25 million tons this year.

The company will further increase capacity to 6 million tons of oil equivalent in 2015, Shanghai Securities News reported, citing an official with the company.

The company has just formulated its development plan for new energy this year, under which it will develop fuel ethanol capacity of 500,000 tons per year and coalbed methane capacity of 600 million cubic meters per year, said the report, citing Zhou Mingchun, chief financial officer of PetroChina Co, the listed arm of CNPC.

After increasing the capacity to 6 million tons, CNPC will have 4 billion cubic meters per year of coalbed methane capacity, 1 billion cubic meters per year of shale gas, 2 million tons per year of fuel ethanol and 60,000 tons per year of biodiesel, said Zhou.

At present, the company has started production on a 500,000-ton-per-year fuel ethanol plant in Jilin province, and is also developing coalbed methane in coal-rich Shanxi province.

Analysts said that the accelerated development pace in new energies by CNPC is in line with China's efforts to use more new energy for coal and oil alternatives. The high- potential new energy business will be another growth engine for CNPC's business.

"Development of new energies is an indispensable part of the company's goal to become an integrated energy company that can compete on a global scale," CNPC said in a statement on its website.

By now CNPC has invested over 1 billion yuan ($146 million) on fuel ethanol. The company has also formed a coalbed methane demonstration zone, which has reserves of around 100 billion cubic meters of gas, it said on the website.

On March 22 PetroChina said it had agreed on a joint bid with Shell to pay for A$3.5 billion ($3.15 billion) to acquire Arrow Energy Ltd, an Australian coal-seam gas developer.

The move will boost PetroChina's gas portfolio and also help speed up its initiatives for new energy, said analysts.

Coal-seam gas, commonly known as coalbed methane, is methane found in coal seams. It is produced by non-traditional means and but used in the same way as traditional natural gas.

China plans to increase its annual coal-bed methane output to 10 billion cubic meters in 2010.

China, which relies on imports for over half of its oil consumption, is expected to import 210 million tons of oil this year, as domestic production cannot keep pace with demand, Huang Li, an official with the National Energy Administration, said at the 10th China International Petroleum & Petrochemical Technology and Equipment Exhibition held in Beijing recently.

The country is expected to add 20 million tons of oil refining capacity this year, she said.

http://www.chinadaily.com.cn/bizchina/2010-04/01/content_9674620.htm

^{Automobile and Transportation}

China may raise small-vehicle consumption tax in 2011.

April 22 (China Daily) - China may raise the consumption tax on small cars next year as a reduced rate is no longer needed to boost sales, an official at the State Information Center said.

The government may restore a 10 percent tax rate on vehicles with engines no larger than 1.6 liters, Xu Changming, a research director at the center, said in an interview at a conference in Beijing today. China halved the rate to 5 percent in January 2009, helping the nation's auto sales surge 46 percent to a record 13.6 million vehicles last year. It raised the tax to 7.5 percent this year.

Last year's surge in demand isn't sustainable in the long term and automakers are doing so well they no longer need the tax reduction to raise sales, Xu said. The government is also considering other subsidies that would target hybrids and electric cars, and may encourage automakers to expand lending to car buyers to increase sales, he said.

"It is most healthy for automakers to have an annual sales growth rate of about 10 percent," Xu said. "It isn't necessary to extend the tax reduction into next year. The government raised the tax to 7.5 percent this year to pave the way for returning the rate back to 10 percent."

China's vehicle sales may rise 17 percent this year to 16 million, and annual demand may eventually exceed 30 million, Xu said in a speech earlier today.

The government may introduce policies as early as this year to spur carmakers to set up auto-financing businesses, Xu said. The proportion of automobiles bought on credit in China is 10 percent, compared with 85 percent in the US and 65 percent in India, he said.

China's government is expected to announce subsidies for hybrid and electric cars as early as July. The details of the measures, which were originally scheduled to be announced in January, are still being debated, Xu said today.

http://www.chinadaily.com.cn/bizchina/2010-04/22/content_9763698.htm

Electric cars to get a lift up from new policy measures.

April 8 (China Daily): BEIJING - Chinese automakers are set to benefit from a much-awaited government stimulus plan that encourages production of fuel-efficient vehicles, said industry sources.

The green auto plan, currently awaiting government approval, is expected by industry players to be unveiled in the next couple of months.

According to the plan, electric cars that qualify for subsidies are those that have received government's production license and are assembled in China, regardless of whether made by domestic or joint-venture firms.

The industry sources said that imported electric cars would have little hope of benefiting from the policy in the initial stages.

Private buyers in five chosen cities could obtain incentives, with potential limits of up to about 60,000 yuan ($8,788) or 50,000 yuan per car.

Miao Wei, vice-minister of the Ministry of Industry and Information Technology has said the government planned to launch the incentives for private purchases of new energy vehicles in March. However, the plan has since been postponed.

Zero emission pure electric cars would be the preferred technological paths for new energy cars in China, which would be reflected in the stimulus plan, said sources. Other technical options include hybrid, fuel cells and hydrogen fuel new energy vehicles.

"The government's stimulus policy, which will be released soon, will focus mainly on promotion of pure electric cars," said Xu Changming, a senior economist of State Information Center, a thinktank under the National Development and Reform Commission.

Pure electric cars could eliminate dependence on oil and provide an opportunity for Chinese automakers to catch up with global carmakers, which already have a head start in the electric car market. For other technologies such as hybrid, Xu said it still requires advanced engine and transmission technologies, but such advancements are lagging behind at the moment.

China's roadmap for new energy cars for current period is "giving priority to pure electric cars, and taking hybrid cars as complement", said Zhang Jinhua, vice-secretary general of China's Society of Automotive Engineer, who is also an official for the national 863 research program on energy saving and new energy vehicles.

Fuel cell and hybrid vehicles were targeted as the priority for new energy vehicle development in China's 11th Five Year Plan (2005-10), but the authority's mainstream opinion has shifted to cars powered by pure electricity, and hybrid and fuel cell technologies would mainly be applied on commercial vehicles, said analysts.

"In the long run, commercialization of new energy cars cannot only rely on government's stimulus," said Frank Liao, chief engineer of Chery's automobile engineering research institute.

"The contest for new energy vehicles will last for decades and which technology path would prevail in the competition is up to market forces," Liao said.

The first round of competition for the electric cars market share would mainly be between medium and small-sized domestic, private automakers, as large State-owned domestic automakers have acted sluggishly in the electric car research and development.

A batch of pure electric cars has rolled-off from the assembly lines at BYD, Chery, ChangAn and Zotye. BYD Auto launched its plug-in hybrid car F3DM at the end of March and tiny Zhejiang-based Zotye Auto launched its 2008 EV in January.

"Big State-owned automakers didn't take the development of electric cars seriously five years ago and now they are feeling the sense of urgency as the smaller rivals have marched in advance," said Wang Zhenpo, an associate professor at the electric vehicle center of Beijing Institute of Technology.

http://www.chinadaily.com.cn/bizchina/2010-04/08/content_9701896.htm

China invests heavily in fertile green auto ground.

April 22 (China Daily) : BEIJING - Chinese automakers, unscathed by a savage global downturn, are ramping up efforts to get more cleaner, low-emmission vehicles on the roads, counting on the green drive to propel them into the top ranks of the global auto industry.

From leading Chinese auto group SAIC Motor Corp to rising star Geely Automotive Holding, indigenous players will show off a host of new green vehicles at the Beijing autoshow that starts this week, including some futuristic concept models.

"Green energy cars represent sort of gold mine on the horizon that all the companies hope to reach eventually," said Stephen Dyer, principal with A.T. Kearney China. "Almost all the major Chinese manufacturers have on-going development programs."

Big auto groups such as SAIC, are likely to emerge as winners, industry analysts say, while leading private-sector players, like Warren Buffet-backed BYD will also be a front runner as it pushes into foreign markets.

SAIC, which will showcase its self-developed electric car E1 and hybrid models at the auto show, is investing 6 billion yuan ($879 million) in green vehicles. Its hybrid Roewe 750 saloon is scheduled for mass production later this year, followed by a plug-in version of a smaller Roewe 550 and E1 in 2012.

Another State-backed heavyweight, Beijing Automotive Industry Holding Co, unveiled its BE701 electric car in November and is building a 2.28 billion yuan production base on the outskirts of the Chinese capital, capable of making 50,000 electric vehicles and twice as many hybrids.

"There is still a technology gap between local and foreign (firms), but this is a relatively level playing field and the Chinese are not that far behind. They have a chance to catch up," said Mervin Guo, a senior analyst with J.D. Power.

Other industry observers cited Daimler's tie with BYD as a recognition of China's growing strength in this field.

"The Daimler-BYD tie is different from those in the early days when local automakers tended to rely heavily on their foreign partners for technologies. They are equal partners," said Chen Liang, an analyst with Huatai Securities.

Besides, both GM and Nissan Motor are on track to import the Volt and Leaf next year, followed by BMW, which will bring its first hybrids for China -- a gasoline-electric BMW X6 and BMW 7 -- later this year.

http://www.chinadaily.com.cn/bizchina/2010-04/22/content_9763502.htm

Restriction on car use extended.

April 3 (China Daily): BEIJING - The restriction on car use in the national capital will be extended for another two years starting April 11, as traffic jams are still one of the city's most serious problems, the municipal government announced on Friday.

The restriction, which will be extended until April 10, 2012, will continue to follow the pattern as before, under which Beijing's car owners are prohibited from driving one day each week based on the last digit of their license plates.

According to statistics from the Beijing Transportation Research Center, until the end of last year, the streets of Beijing, with a population of 17.55 million, were packed with more than 4 million vehicles.

"The rapid increase in the number of vehicles and the high frequency of car use have made Beijing's traffic situation really intense," said Zhou Zhengyu, vice-secretary-general of the Beijing municipal government.

"Therefore, we have to continue to take measures to ease jams."

Zhou told reporters at a press conference that the restriction, which has been in place for a year, has kept more than 800,000 cars, or a fifth of the city's 4.2 million cars, off the roads.

The Beijing Transportation Research Center said in an annual report published in January that due to the traffic restrictions, congestion last year was down 7.4 percent from 2008.

Beside the car ban, the government also encourages companies to set up virtual offices so that their employees do not have to join the traffic every day.

According to a survey done by a third-party company, Horizon Research Consultancy Group, more than 90 percent of the 2,180 respondents agree to extend the restriction.

"I support the decision to continue the restriction," said Hao Xuejin, a professor from Beijing University of Civil Engineering and Architecture. "Everybody can see that the traffic is really bad in Beijing, and it would be worse without the restriction."

Hao said he has gotten used to the restriction now.

"Besides, I think it's good for my health and the environment not to drive one day every week."

http://www.chinadaily.com.cn/cndy/2010-04/03/content_9683583.htm

East China province builds first large electric car charging station.

April 11 (Xinhua) - JINAN : The first large electric car charging station in east China's Shandong province, capable of charging 45 cars at a time, is being built in Linyi city, as part of a program to promote the development of new-energy vehicles.

The project, costing 23 million yuan ($3.37 million), would be completed by May, said Li Guohua, deputy director of the sales department of Shandong Electric Power Corporation, which is developing the station.

Shandong is one of China's biggest auto producing provinces and has been developing electric cars since 2004. The province has more than 30 electric car producers, and is aiming at an annual production capacity of 300,000 vehicles by 2015.

"How we charge the electric cars is the key to the industry's success. Whether the green cars can enter China's mainstream market depends on a nationwide charging network that we are building," said Li.

China was the world's largest electric car producer and market, said Li. "Many other cities, including Shanghai, Shenzhen and Wuhan, have built electric car charging stations."

Developing and popularizing the zero-emission cars was one of the best ways to curb China's growing fuel demand and to reduce air pollution, said Yang Yusheng, an academician of the Chinese Academy of Engineering.

But the biggest challenge was the charging problem, Yang said.

"Building an electric charging network is the key to popularizing electric cars in China," said Yang.

According to China's State Grid Corporation, 75 electric vehicle charging stations are planned in 27 cities across China by the end of the year.

China overtook the United States as the world's largest car market in 2009. New auto sales rose 46.15 percent year-on-year to 13.64 million units in 2009 in China, according to the China Association of Automobile Manufacturers.

http://www.chinadaily.com.cn/m/shandong/e/2010-04/12/content_9715190.htm

Multinationals play green, luxury cards in booming car market.

April 29 (Xinhua) - BEIJING: The world's biggest car makers are displaying their green and luxury credentials at this year's Beijing auto show in a bid to capitalize on China's still growing car market.

Under the theme "Imagining the Green Future," multinationals have unveiled a range of all-electric or hybrid concept vehicles.

Europe's largest carmaker, Volkswagen, announced it would introduce its advanced hybrid and electric car technologies to China, and start producing electric cars in China in 2013 and 2014.

"The China electric vehicle strategy is the first our group has tailor-made for a certain country," said Winfried Vahland, president and CEO of Volkswagen Group China.

The company is displaying its energy-saving and environment-friendly "BlueMotion" technologies, which, it claims, can reduce fuel consumption and emissions by 20 percent for the full range of models from VW's two joint ventures in China.

Nissan, Japan's third largest carmaker, said China was its second largest market after the United States. The show saw the world debut of the electric Nissan LEAF and the low-carbon compact, the March.

Sales of the LEAF are set to begin in Europe, the United States and Japan later this year, with mass production worldwide planned in 2012.

Nissan China president Yasuaki Hashimoto said Nissan would roll out 25 electric vehicles in central China's Wuhan city next year as trials.

The LEAF can run up to 160 km on a full charge, which can be done through a 200-volt home outlet and takes about 8 hours, the firm claims.

Luxury car brand BMW will introduce its electric Mini on the Chinese market this year, followed by its ActiveE next year.

The company is to provide 50 all-electric Minis to China by the end of this year for road trials under agreements with the China Automotive Technology and Research Center and the State Grid.

Luxury brands

Infiniti, the luxury division of Nissan, is determined to further explore China's high-end car market at the auto show.

Yasuaki Hashimoto said Infiniti was seeing strong growth in China with first-quarter sales soaring 184 percent year on year.

He gave no specific sales figures for the first quarter, but said Infiniti sold 5,000 cars in China last year, and aimed to double sales to 10,000 this year.

He said vehicles with engines of up to 1.6 liters sold well in China due to government policies rolled out last year to encourage demand for small-engine cars. "This, however, does not mean luxury cars won't sell well as the high-end car market grew 30 percent last year."

Infiniti had 19 dealerships in China's major cities with 11 more expected to be established by the end of 2011, he said.

China was becoming the most rapidly developing market for luxury cars, said Victor Muller, CEO of Netherlands-based sports carmaker Spyker Cars.

The company announced Sunday it had signed an agreement authorizing China Automobile Trading Co (CATC), one of the country's major importers, as Spyker's sole general distributor for its new models in China.

As China was already the world's largest car market, global auto makers would have trouble progressing without clear market strategies, he said.

Spyker was optimistic about China's luxury car market, and would collaborate with Chinese partners to explore its potential, said Muller.

Post-crisis hope

One of the biggest car events this year, the 2010 Beijing International Automotive Exhibition, which runs till May 2, has become a platform for global auto giants to unveil medium and long-term targets.

Major automakers saw declines in global sales with the economic downturn last year while their profits in the world's third largest economy rose, due to government incentives to stimulate consumption.

China's auto sales hit 13.64 million units last year, making it the world's largest market. Sales in the first quarter this year were 4.61 million, up 71.78 percent year on year, according to official figures.

http://www.chinadaily.com.cn/bizchina/2010-04/29/content_9791076.htm

Honda, Volvo plan green car launches in China.

April 23 (Reuters) – BEIJING: Honda and Volvo are both planning to launch clean-energy cars in China, joining a growing crowd of domestic players developing such models to take advantage of expected generous government incentives.

From leading Chinese auto group SAIC Motor Corp to rising star Geely Automotive Holding, indigenous players were showing off a host of new green vehicles at the Beijing autoshow that started on Friday in the Chinese capital.

The companies, domestic and foreign alike, are scrambling to stake out leading positions in hybrid and electric vehicles that meet tougher emission standards.

Honda Motor Co joined the fray when it said it would introduce a hybrid model under its premium Acura brand in China within three years, and its Insight and CR-Z hybrids from 2012.

Ford Motor Co's Volvo unit, which is being acquired by the parent of Geely, said it planned to sell its c30 electric cars in China.

"For investors, the basic picture is clear, the government does want to move away from dependence on oil and doesn't want to repeat what's happened in America: we've become addicted to oil," Michael Dunne, an auto consultant, told Reuters Insider in an interview on the eve of the auto show's opening.

"Where things get sketchy are in the details: is the technology ready to move to electric cars, and who's going to pay the subsidies and the investments in infrastructure that are necessary to get e-vehicles going."

Among domestic players, Dunne mentioned BYD Co, invested by Warren Buffett's Berkshire Hathaway, and SAIC, as two leaders in the field because of their access to cutting-edge technology.

ELECTRIC MAJORITY BY 2030?

China's fifth largest carmaker, Beijing Automotive Industry Holding Co (BAIC) is also getting in on the act, with plans to invest 3.7 billion yuan ($540 million) in the field, developing hybrid, pure-electric, and plug-in hybrid vehicles, said President Wang Dazong.

"There are big opportunities for growing EV market in these five or 10 years," said Shouichi Matsumoto, senior general manager of Dongfeng Motor Co, the 50-50 venture between Nissan Motor and Dongfeng.

"I think China will become one of the most important markets for electric vehicles. If we use clean electric power like wind or solar, electric vehicles will be clean. Not in three or five years but maybe in 10 or 20 years, electric vehicles will be majority in China," he said.

But the road for low emission, alternative fuel vehicles in China is a long one. Sales of Toyota's Prius, the world's best-known green car, numbered just 300 in China last year, when it overtook the U.S. as the world's largest auto market.

The buzz around electric cars came as carmakers boosted their overall sales targets for China this year on turbocharged sales fueled by tax incentives from Beijing.

China's car sales have defied falling sales in the rest of the world and have continued to show strong growth this year, up 76 percent in the first three months, according to government data.

Industry watchers were initially predicting 10-15 percent growth for this year, but many have started revising those expectation upwards to the 20 percent range and higher.

Major carmakers ranging from Germany's Bayerische Motoren Werke AG (BMW) to Japan's Mitsubishi Motor and luxury carmaker Lamborghini, part of Volkswagen, were boasting heady China growth targets for this year, as the market continues to boom.

http://www.reuters.com/article/idUSTRE63M0WU20100423

^{Climate Change}

China's efforts to tackle climate change in last decade.

April 21 (Xinhua): BEIJING - The 40th World Earth Day falls on Thursday this year, with a theme of "climate change - the mother of all environmental and community issues."

China has made continuous efforts to address climate change challenges while maintaining rapid economic growth in recent years.

The following are the major policies rolled out by the Chinese government since the year 2000, which are aimed to improve the economic growth pattern, promote energy conservation, prevent environment pollution, and push up the development of the recycling economy.

In 2000, the government issued regulations on household garbage disposal to improve landfill gas collection and usage in a bid to reduce emissions of methane and other greenhouse gases.

From 2003 to 2005, the government enacted a series of laws and regulations to increase recycling, including Clean Production Promotion Law, and the Prevention of Environmental Pollution by Solid Wastes Law. The laws and regulations set the general strategy, short-term goals, basic means, and measures for the development of a recycling economy.

In 2005, the government promulgated laws, incentivizing renewable energy usage by the state power grid and giving users of renewable energy price discounts, to promote clean energy usage in power sector.

In 2006, the government issued a slew of measures to curb the expansion of high-energy-consuming industries, including raising market entry threshold and adjusting tax rebates for exports and customs duties to restrain exports of commodities produced in an energy inefficient way.

In 2006, the government launched ten major energy-conservation projects, estimated to have stopped the burning of 240 million tonnes of standard coal from 2006 to 2010. It also launched an energy-conserving campaign among more than 1,000 enterprises in steel, non-ferrous metals and coal sectors in 2006, encouraging them to audit their energy use, map out energy-saving plans and reveal their energy use to the public.

In 2007, the government announced a timetable for different regions to close down their old and polluting production facilities in 13 industries, including power generation, steel, cement and glass production industries.

China has been making great efforts to adjust the economic structure, and to create a growth mode featuring "less input, less consumption, less emission and high efficiency."

In 2007, the government issued plans to boost the development of the service sector, providing support to key areas. Later in the year, the government formulated policies to push up the development of high-tech industries.

In 2007, the government established an accountability system for energy conservation and emission reduction, requiring leading officials in all provinces and key enterprises to be appraised by their performance regarding promoting energy saving and reducing pollutants.

In 2008, China limited use of plastics, requiring supermarkets, department stores, grocery stores to no longer provide free plastic shopping bags in a bid to reduce energy consumption and pollution.

http://www.chinadaily.com.cn/china/2010-04/21/content_9758574.htm

Climate change mechanism set up.

April 30 (China Daily): BEIJING - A ministerial-level dialogue mechanism on climate change has been set up between China and the European Union, a move analysts believe will help the United Nations climate summit to be held in Mexico in December bear fruit.

The two sides will hold talks regularly to strengthen collaboration and deepen understanding, according to a joint statement issued after China's climate change envoy Xie Zhenhua held talks with Connie Hedegaard, the EU commissioner for climate action, on Thursday.

The two sides will also set up a hotline, the statement said.

"China and the EU appreciate each other's efforts to combat climate change, and would like to restate support for the Copenhagen Accord and promote the political consensus reached in the accord," it said.

The two sides pledge to work closely under the auspices of the UN Framework Convention on Climate Change and the Kyoto Protocol to achieve positive results and meaningful progress at the climate summit in Cancun, Mexico, it said.

China already has a similar mechanism in place for dialogue with the United States.

"The latest mechanism signals that China and the EU, both major participants at the Cancun summit, are making joint moves on addressing climate change," said Zhang Haibin, a professor on climate change at Peking University.

Zhang said the dialogue will help China and the EU get rid of "misperceptions" after last year's Copenhagen summit.

Hedegaard is accompanying European Commission President Jose Manuel Barroso, who is in China to attend the opening ceremony of the World Expo in Shanghai on Friday.

Before leaving for Shanghai, Barroso is scheduled to inaugurate the Europe-China Clean Energy Center at Tsinghua University in the morning, and address students on issues including climate change.

"I think we (China and the EU) have close contacts, but we are at the beginning of a real partnership," Gunther Oettinger, the EU commissioner for energy, said on Thursday when commenting on China-EU cooperation to fight global warming.

"We have much to do, in research, science, in cooperation for new generations of energy power stations. Maybe in combining targets, interests, intentions more and more," he told China Daily.

But Zhang Jianyu, China program manager of the US Environmental Defense Fund, played down the significance of the dialogue with the EU.

"What we need is not dialogue, but action.

"There are already a lot of dialogue opportunities among state leaders and environment ministers," Zhang said.

In mid April, Xie, vice-minister of the National Development and Reform Commission, met his counterparts from European countries in Washington at the Major Economies' Meeting and Climate Change Initiative led by the US.

Xie also held several rounds of direct talks with, or made telephone calls to, his US counterpart Todd Stern last year.

"To some degree, whether the US Congress passes a bill on clean energy and climate change will determine the outcome of the Cancun summit," Zhang added.

http://www.chinadaily.com.cn/china/2010-04/30/content_9794726.htm

Xi: China active, serious in tackling climate change.

April 10 (Xinhua) : BOAO, Hainan - China has been working "actively and seriously" to tackle climate change and build capacity to respond to it, Chinese Vice President Xi Jinping said Saturday.

"Every country has a stake in dealing with climate change and every country has a responsibility for the safety of our planet," Xi told the opening ceremony of the annual Boao Forum for Asia meeting in Boao in south China's island province of Hainan.

"We have joined global actions to tackle climate change with the utmost resolve and a most active attitude, and have acted in line with the United Nations' principle of common but differentiated responsibilities," he said in a key-note speech.

He said Asia, now a major engine behind world economic recovery, had learned lessons from the two severe financial crises in the late 1990s and over the past two years.

"We must further improve the development model, and seek a path of green and sustainable development," he told some 2,000 political and business heavyweights and experts from Asia and around the world.

Xi said China had eliminated a huge amount of outdated production capacities in heavily polluting and energy-gorging industries, including coal-fired power plants, steel mills, and cement, chemical and paper-making firms.

The country has targeted at slashing carbon dioxide emissions per unit of gross domestic product (GDP) in 2020 by up to 45 percent from the 2005 level and raising the proportion of non-fossil energy in total primary energy consumption to 15 percent.

The measures to lower energy consumption alone will help save 620 million tonnes of standard coal in the next five years, which will be equivalent to the reduction of 1.5 billion tonnes of carbon dioxide emissions, Xi said.

He said China's move to speed up transformation of economic growth pattern and adjustment of economic structure is a positive contribution to Asia's and the global fight against climate change.

China, the world's second-largest energy consumer, has cut energy consumption per unit of GDP by 14.38 percent and emissions of sulphur dioxide by 13.14 percent in the four years through 2009.

"That was equivalent to the reduction of 900 million tonnes of carbon dioxide emissions," he said.

The country has become a global leader in clean energy development by having the world's largest installed hydropower capacity and nuclear power capacity under construction by 2009, he said.

It also ranked the first in the world in terms of the coverage of solar water heating panels and cumulative solar photovoltaic power capacity.

Xi said China played a positive role in the success of the Copenhagen conference on climate change and the conclusion of the Copenhagen Accord in December last year.

"We have provided to the Secretariat of the Untied Nations Framework Convention on Climate Change information on China's voluntary actions on emissions reduction and joined the list of countries supporting the Copenhagen Accord," he said.

Xi called on Asian nations to transform economic growth pattern to actively respond to climate change and achieve green development and sustainable growth.

The nations should promote a conservation culture and raise awareness for green development, green consumption and a green lifestyles.

Asia has huge potential for reducing energy consumption and improving energy efficiency, although it lagged far behind the world's advanced levels in the aspect, Xi said.

The developed countries should help to facilitate technological transfer and share related technologies on the basis of intellectual property protection, he said.

He also urged to quicken low-carbon technology development, promote energy efficient technologies and raise the proportion of new and renewable energies in the energy mix.

http://news.xinhuanet.com/english2010/china/2010-04/10/c_13245038.htm

China urges int'l trust on climate issue.

April 8 (China Daily) - A Chinese official on Thursday pledged that the country will stick to its clean energy policy, while urging the international community to enhance mutual trust and push for more transparency and cooperation at the climate conference to be held in Mexico in November this year.

The largely-disappointing Copenhagen climate conference last December worked out a diluted unbinding accord which failed to nail down the exact figure on carbon reduction commitments.

"This is the Copenhagen lesson. An international negotiation that lacks transparency and broad participation won't be acknowledged by any nation, and will seriously imperil mutual trust in tackling the climate change problem," said Xie Zhenhua, vice chairman of the National Development and Reform Commission (NDRC), the country's top economic planner, in an address at the opening ceremony of the 2010 Asia News Network Board Meeting in Beijing.

As for the Cancun climate conference in Mexico, "the negotiation work remains herculean," Xie admitted. Eight months before the talks, government officials are already writing off chances for a global treaty. Japanese negotiator Kunihiko Shimada said to Bloomberg last month that a deal this year is "almost impossible," while Europe Union climate policy bellwether Jos Delbeke just ruled out a "comprehensive legal agreement" in 2010.

The Cancun conference faces an uphill task to specify the exact quantity of developed countries' carbon emission reduction, to work out a framework for the current as well long-term climate fund and technology transfer to developing countries, Xie said.

The NDRC official urged global negotiators to stick to the ongoing climate talks "on the principle of transparency, wide and equal participation, as well as consensus based upon consultation", so as to push forward the stalemated Copenhagen conference.

"China will unswervingly carry out the sustainable development policy, actively push forward and adapt to climate-friendly developments," Xie said, "In the spirit of row-together-in-the-same-boat, we hope the international community could enhance their mutual trust and beef up the climate cooperation, so as to work out a better planet for future generations."

http://www.chinadaily.com.cn/china/ANN/2010-04/08/content_9703202.htm

Stick to Kyoto Protocol targets, China tells West.

April 14 (China Daily) : BEIJING - The Kyoto Protocol should not be replaced by any new agreement being proposed by developed countries as it is intended to evade their responsibilities in reducing emissions so far, the foreign ministry has said.

"Strict compliance with the Kyoto Protocol is of vital significance for successful international cooperation in the area of climate change. But some developed countries have failed to achieve the target of reducing greenhouse gas emissions set by the Kyoto Protocol even while increasing their emissions by a large margin," spokeswoman Jiang Yu said at a regular briefing in the capital.

The Protocol sets binding targets for 37 industrialized countries and the European nations for reducing greenhouse gas emissions, amounting to an average of five percent against 1990 levels over the five-year period from 2008 to 2012.

"It is quite obvious that some developed countries are trying to evade their emission reduction responsibilities by putting forward a new agreement to replace the Kyoto Protocol," Jiang added.

"To ensure the success of international cooperation, efforts should be made to confirm the substantial greenhouse gas emission reduction targets for the developed countries during the Kyoto Protocol's second commitment period. For those developed countries who have not ratified the Kyoto Protocol, we should also make sure that they fulfill emission reduction commitments comparable to other developed countries," she added.

"China upholds a legally binding agreement reached by negotiations, but all of those efforts should be made on basis of the Kyoto Protocol and the Bali Road Map," Jiang said at the briefing.

"The principle of "common but differentiated responsibilities", adopted by the Kyoto Protocol, is the foundation for a successful negotiation," Jiang said.

If the developed and the developing countries are treated equally on the emission reduction targets, the negotiations would not be carried forward and developing countries, including China, will not accept it, she stressed.

"Effective institutional arrangements should be made to ensure that the developed countries provide support to the developing ones. The help can come in the form of funds, technology transfer and capacity building, according to the UN Framework Convention on Climate Change and the Bali Road Map," Jiang said.

"Under the framework of sustainable development, the developing countries can take appropriate mitigation actions based on their respective national conditions," Jiang added.

http://www.chinadaily.com.cn/cndy/2010-04/14/content_9725809.htm

China, Denmark pledge joint efforts to tackle climate change, upgrade ties.

April 10 (Xinhua): BOAO, Hainan -- China and Denmark Saturday pledged to work closely on fighting climate change and cementing bilateral relations.

The pledge came out of the meeting between Chinese Vice President Xi Jinping and Danish Prime Minister Lars Loekke Rasmussen on the sidelines of the annual session of the Boao Forum for Asia (BFA), a pan-Asian platform for dialogue on key issues affecting Asia and the world.

Denmark was one of the first Western countries to recognize and establish diplomatic relations with the People's Republic of China, Xi said. The two countries forged diplomatic ties in May 1950.

"Over the past six decades, China and Denmark have witnessed close high-level exchanges, fruitful trade cooperation, and close communication on international affairs," Xi said.

Rasmussen said he was happy to visit China when the two countries were celebrating 60 years of diplomatic relations.

Rasmussen said he was deeply impressed by China's vigor, its people's hard work and the country's commitment to green development.

Xi noted Denmark was the first Northern European country to establish all-round strategic partnership with China. The partnership was set up in 2008 when Rasmussen came to Beijing for the seventh Asia-Europe summit.

Xi called on both countries to enhance understanding, expand common ground and strengthen collaboration to generate substantial mutual benefits.

Rasmussen said his country would like to work closely with China for a better bilateral relationship.

Xi reaffirmed the Chinese government's great attention to tackling climate change and praised the Copenhagen Accord reached at the Copenhagen climate change conference last December.

Xi praised Rasmussen and his country for their efforts to making the Copenhagen conference a success.

Rasmussen spoke highly of China's positive role in seeking a successful Copenhagen conference and producing the Copenhagen Accord.

Xi pledged China would like to make joint efforts with Denmark to seek more progress in fighting climate change.

Rasmussen will fly late Saturday to Beijing, where he will hold talks with Chinese Premier Wen Jiabao on Monday.

http://news.xinhuanet.com/english2010/china/2010-04/10/c_13245521.htm

^{Low Carbon Development}

Market forces crucial to low-carbon economy.

April 30 (China Daily) - Developing a low-carbon economy is now a key national development strategy in which China has made remarkable progress, the World Bank said in a recent report.

The Chinese government's target of a 20 percent reduction in energy consumption from 2005 to 2010 would reduce annual CO2 emissions by 1.5 billion tons by the end of this year, the most aggressive emission reduction target in the world, five times the 300-million-ton reduction of the European Union's Kyoto commitment, said the report.

While the world's leading coal consumer, China has also become the world leader in renewable energy - now the source of 8 percent of total primary energy, a figured targeted to reach 15 percent by 2020.

China's installed wind energy capacity which has doubled every year since 2005 was the most of any nation globally in new capacity last year.

Planners recognize that a low-carbon economy is needed for long-term economic and social interests, so they are moving to realign that nation's economic structure toward a less energy-intensive economy.

To achieve the emissions reductions proposed under the sustainable energy scenario in the World Bank study, China would need to reduce energy intensity by 4.3 percent annually over the next two decades.

Energy pricing

China has primarily relied on administrative regulations to improve energy efficiency during the 11th Five-Year Plan (2006-10), but market-based mechanisms and energy pricing are also needed.

A more balanced approach that uses the market and financial incentives to improve energy efficiency would help the country achieve its objectives, according to the World Bank.

In particular, market-based pricing reforms are fundamental to an efficient, sustainable, and secure energy sector. An important element to achieve these objectives is energy prices that reflect production costs, environmental external costs and resource scarcity.

The rapid urbanization in China also presents an unrivalled opportunity to build low-carbon cities.

That requires an integrated approach of compact urban design, public transport, clean vehicles, green buildings and smart grids. With rising incomes, it is also important to encourage a sustainable lifestyle through public education.

According to the latest China human development report titled "China and a sustainable future, towards a low-carbon economy and society", China faces "no other choice" but to shift to a low-carbon approach in shaping the country's future social and economic development agenda.

Human development

Commissioned by the United Nations Development Program (UNDP) in partnership with Renmin University of China, the publication asserts that the most strategic option for policymakers is to embark on a low-carbon development path that will preserve and increase its human development achievements.

The report contended that the nation's current growth model will be difficult to sustain for the long term.

"China is at a critical juncture where the 'business as usual' growth model is insufficient in meeting the country's emerging challenges and pressures," said Khalid Malik, UN resident coordinator in China.

"The shift to a low-carbon development pathway is imperative as China balances further economic development with environmental sustainability and the need to respond to the threat of climate change," he said.

"As the country sits at a crossroads in preparing its 12th Five-Year Plan (2011-15), the report is released at a time where its conclusions and recommendations can play a significant role in shaping the nation's rapidly evolving policies on sustainability," said Malik.

The report offers policy options for a country that will see the migration of nearly 400 million rural Chinese into urban areas over the next two decades.

According to the study, this enormous internal movement of communities, larger than the entire population of the United States, will exert huge upward pressure on greenhouse gas emissions.

"If China can fully seize the opportunities at hand and accomplish the report's suggested recommendations, it will be possible to move towards a society which is not only environmentally sustainable, but also provides the conditions for greater job creation, improved resource efficiency and energy security, food security, and better health conditions for its citizens," concluded Malik.

http://www.chinadaily.com.cn/cndy/2010-04/30/content_9795105.htm

China shift to low-carbon model vital for future: U.N.

April 15 (Reuters) - China should step up its drive to a low-carbon growth model to maintain economic development and preserve achievements that have made it the world's third largest economy, a United Nations report says.

The report by the United Nations Development Programme (UNDP) released on Thursday says China's current growth model will be hard to sustain as the nation becomes more urbanised and the economy keeps expanding, consuming ever more amounts of energy.

China is already the world's largest emitter of greenhouse gases from power plants, industry and transport blamed for heating up the planet and is under international pressure to curb the growth of its emissions. Coal is, and will remain, a major source of energy.

The country is also the world's most populous with 1.3 billion people and the number is expected to keep growing in coming decades. Hundreds of millions expect to migrate to the cities, threatening a massive spike in carbon emissions.

"The shift to a low-carbon development pathway is imperative as China balances further economic development with environmental sustainability and the need to respond to the threat of climate change," Khalid Malik, UNDP Resident Representative in China, said in a statement.

The report, "China and a sustainable future, toward a low carbon economy and society" and written in partnership with Renmin University of China, links economic growth, carbon emissions and human development in China.

It takes into account the numerous policy initiatives the government has launched that have driven rapid investment in renewable energy, cut energy intensity for industry and boosted environmental protection and cut pollution.

For example, China has committed to reducing carbon dioxide emissions per unit of GDP in 2020 by 40 percent to 45 percent compared with 2005 levels. And rapid growth of renewable energy such as wind and solar has created a sector already worth $17 billion and employing close to one million people.

STRATEGIC CHOICE

But more was needed in a nation vulnerable to the impacts of climate change and which was already experiencing greater extremes of weather, threatening livelihoods and the economy.

"If climate change impacts are not adequately addressed in China, there is a danger that three decades of achievements may be reversed. China's most strategic choice is therefore to embark on a low-carbon development path that will preserve and increase its human development achievements in the years to come," says the report.

It said it was crucial to balance maintaining job growth and the needs of millions of poor people to prevent social unrest.

Since China launched economic reforms in the late 1970s, more than 500 million people have been lifted out of poverty, it says. But more than 100 million still live below the poverty line.

China's total greenhouse gas emissions have also grown rapidly. From 1970 to 2007, the total amount rose over seven times, the report says.

If the government makes only some efforts to reduce carbon pollution, energy-related CO2 emissions will increase rapidly to 11.4 billion tonnes in 2020, 13.9 billion tonnes in 2030 and 16.2 billion tonnes in 2050, and will not peak before 2050.

Much stronger action meant there was potential for emissions reduction after 2030 but that this would be difficult without a large number of support measures and major investment.

The report concludes that energy efficiency, carbon capture and storage, renewables and nuclear power were crucial investment areas to achieving a low-carbon future. It says that over the next 20 years, nearly 350 million Chinese are expected to migrate to urban areas -- more than the current population of the United States.

"Since urbanization generally increases emissions, China will face enormous pressures to reduce emissions while economic development and urbanization move forward," it says.

Accelerated urbanization fed on energy-intensive raw materials such as steel products, cement and chemical materials.

To cope with urbanization, China would need to construct an estimated 50,000 new high-rise buildings and 170 new mass transportation systems. Rapid freight growth and more highways, railways and ports would also be needed.

http://www.reuters.com/article/idUSTRE63E0M320100415

China: low carbon sources to supply quarter of electricity by end of 2010.

April 9 (Guardian) - Low carbon energy sources will account for more than a quarter of China's electricity supply by the end of 2010, according to official statistics released yesterday to the state-backed Xinhua news agency.

The figures revealed that hydro, nuclear and wind power are expected to provide 250GW of capacity by the end of the year, accounting for 26 per cent of national electricity generation.

The statistics also confirmed that China's energy infrastructure remains highly carbon-intensive with "thermal power" – chiefly coal-fired power stations – still accounting for 700GW of capacity.

But they revealed that renewable energy sources are now expanding faster than coal plants: of the 178GW of power generation capacity under construction at the end of 2009, more than 96GW were renewables and 80GW were thermal power.

Two of the five major players in the energy market are leading the way. China Power Investment Corp reportedly increased its clean electricity output to 30 per cent of its total in 2009, while Huaneng has also raised its installed capacity of clean energy to account for 15 per cent of all the power it produces.

Officials also announced today that the installed capacity of wind power in north China's Inner Mongolia Autonomous Region grew over 40 times to 7.3GW by the end of March from 170MW in 2005.

The region has the most abundant wind resources in China, but to date development has been hindered by poor grid connections in the remote area. However, now 20 per cent of power in the area is generated by wind – a level comparable to renewable energy leaders such as Norway and Denmark.

The government plans to continue to build further wind farms in the area and Zhang Fusheng, general manager of Inner Mongolia Electric Power Corporation, told the China Daily that he thinks the region has the potential to provide 150GW of wind power over the coming years and could potentially supply up to half of China's onshore wind resources.

The statistics come in the same week that Vestas announced it has won a contract to supply a total of 100MW of wind energy equipment to a project in Heilongjiang Province, assuaging fears that China would rely chiefly on domestic suppliers for upcoming wind projects.

http://www.guardian.co.uk/environment/2010/apr/09/china-low-carbon-renewable

China faces energy challenges in switch to low-carbon economy.

April 12 (Xinhua) - China has made significant efforts to pursue energy and resource efficiencies to achieve sustainable development, while the nation still faces challenges in the transition to a low-carbon economy and needs integrated solution systems.

"China is already a world leader in critical low-carbon technologies such as solar power, heat and wind turbines, however, it should do more in some key areas, including energy systems, transport, water and food supply during the transformation," said Bjorn Stigson, president of the World Business Council for Sustainable Development (WBCSD), a coalition of some 200 companies dealing exclusively with business and sustainable development.

Challenges

Changing energy use is the biggest of China's challenges when transforming to a green economy. "Less oil, more renewable energy; less coal, more electricity," said Stigson, adding that China's explosive industrial development has placed great pressure on the consumption of energy and other resources.

The large share of coal in China's energy mix is one reason why greenhouse gas emissions have climbed so sharply in recent years, though the government has invested heavily in the recycled energy sector.

"It (China) added more new wind power capacity than any other country last year and progress is on track for nearly 40 million households to use biogas by 2010," he said.

Stigson indicated that driving up the efficiency of older power stations is a key part of the solution so far, as are opportunities to switch to natural gas and upgrade the transmission grid - but a rapid increase in the share of renewable energy and nuclear power in the coming decades will be essential.

He added that another benefit of the change is that China can soon become a new energy products and services exporter in the near future.

Transportation is another pillar as the transport sector is the largest and fastest-growing global emitter of CO2. Currently, about 70 percent of China's energy is used by industry, and only about 10 percent as fuel for its transportation needs, but car ownership is growing daily in China, and energy consumption and emissions are likely to increase significantly in the coming years.

"Fortunately, the government has put fuel efficiency limits on cars, which are tougher than those in the United States, but more is needed to promote hybrid and electric cars," said Stigson.

Water is also crucial, which was highlighted by the current severe drought in southwestern China. Increasing the efficiency of water resources is a tough task for China.

In addition, food supply cannot be ignored. As a food security measure, China's 11th Five Year Plan (2006-10) set a minimum land area of 122 million hectares for grain production in China by 2020. Keeping above this level is an increasingly difficult challenge, given the impact of climate change and rapid urbanization in China.

"Further improving water and land management practice will be key to maximizing potentials and minimizing the impact on the environment, but this is a significant challenge," said Stigson.

Solutions

All of the challenges should be tackled under an integrated solution system, in which government will play a major role in terms of policy formulation and coordination, emphasized Stigson, who is a member of the China Council for International Cooperation on Environment and Development, a high-level advisory body conducting research and providing policy recommendations to the Chinese government. He is also co-chair of the body's Low Carbon Economy Task Force.

The task force has just submitted a report to the State Council, offering some practical policies for decision-makers preparing the 12th Five Year Plan (2011-2015) and beyond.

Leading the suggestions is a call to start the development of a low-carbon economy as early as possible, incorporating the concept into the plan and introducing CO2 emission intensity as a binding target in the plan.

Reforming energy pricing to reflect market demand and supply, resource shortages and environment cost are also highlighted.

For instance, the price of coal, the No 1 industrial energy resource in China, should reflect production, administrative and environmental costs, and electricity and oil and gas should move towards market-based pricing, calibrated with a resources tax.

The report also suggests the building of a green tax system and increasing fiscal expenditure on the development of the low-carbon economy.

Some specific measures involve incorporating the costs of environmental damage and resource depletion in energy pricing through adjusting taxes and fees during early resource exploration, implementing "polluter pays" principles - pollution fees replaced by resource taxes collected as a percentage of the market price, as well as reducing export tax rebates for energy-intensive products.

Aggressive support, such as a combination of direct support, tax incentives and institutional support for technological innovation, diffusion and international cooperation are recommended.

It proposes the establishment of an open national energy research institution with the ability and facilities to carry out research, deliver pilot projects, and carry out trails, testing and certification. The institution, a systematic technology innovation support unit, will be open to businesses, universities and other research institutes, and work to make up for the lack of common technology in the new energy sector.

Other recommendations involve improving legislation and regulations and strengthening enforcement, enhancing the quality of energy and carbon statistics and measurement, and including low carbon economy requirements in urban planning.

Business involvement

These sustainable development pursuits will require investment and innovation, and it is here that business can play a role. "Technologies are generally conceived, developed, deployed and later bought and sold by business, not countries, so engagement with business will be crucial," said Stigson, who has decades of business experiences at a series of global companies, such as ABB and Flakt Group.

Since becoming president of WBCSD in 1995, he has been devoted to making it a platform for companies to explore sustainable development, share knowledge, experiences and best practices, and to advocate business positions on these issues in a variety of forums.

So far, three large Chinese companies - Sinopec, Baosteel and COSCO - have joined WBCSD. "That's not a good number, given China's economic size and compared with 68 from the European Union, 42 from North America and 24 from Japan (on the council)," he said, adding that the council was keen for more Chinese companies to sign up.

In addition to enhancing cooperation among members, the council has initiated low-carbon projects in various sectors to offer cooperation opportunities for businesses around the world, including Chinese companies.

He took the cement industry as an example. Demand for building materials is increasing globally along with urbanization, while producing cement also produces CO2, leading the cement industry to account for approximately 5 percent of current global man-made CO2 emissions.

http://news.xinhuanet.com/english2010/china/2010-04/12/c_13246996.htm

Exciting opportunities exist for U.S.-China carbon exchange collaboration.

April 5 (Xinhua): CHICAGO - There are some very exciting opportunities for collaboration between the United States and China in carbon exchange, said a senior executive in Chicago Monday.

Richard L. Sandor is chairman and founder of the Chicago Climate Exchange (CCX), the world's first and North America's only voluntary, legally binding greenhouse gas cap-and-trade system. Sandor is also chairman of the Chicago Climate Futures Exchange ( CCFE), the world's leading futures exchange for environmental products.

Sandor told Xinhua in an exclusive interview, "I recently spent two weeks in Beijing, Shanghai, Tianjin and Hong Kong. My view, based on the people I've met with on my trips and that I work with everyday, is that there are some very exciting opportunities for collaboration between the U.S. and China in the field of carbon exchange."

He said that a great example is the recent establishment of a joint venture between Chicago Climate Exchange and two Chinese partners -- China National Petroleum Corporation and the City of Tianjin. Working together they will develop an electronic emission trading platform and auction facility for financial products to reduce sulfur dioxide emissions and water pollutants, as well as enhancement of energy efficiency, said Sandor.

Sandor added, "The Tianjin Climate Exchange (TCX) has begun to implement pilot initiatives that can help pave the way for a strong market-based infrastructure that facilitates the environmental and policy goals of the People's Republic of China."

When talking about the opportunities and challenges facing the U.S.-China collaboration in carbon trading area, Sandor said, "We operate in a range of legal and regulatory frameworks with global affiliates in the United States, Europe, China, Australia and Canada. While each country has unique characteristics that come with different demands and needs, what seems to be clear across the board is the importance a market mechanism will play in meeting those demands."

He further explained, "Interest is growing globally in carbon markets as a way to achieve better strategic management of energy costs, new products, new sources of revenue, job creation and poverty alleviation. Going forward this is likely to develop on what could be called a "pluri-lateral" basis. There will be markets in different parts of the world that are linked by similar contracts -- much like you see with crude oil today or like we saw with cotton in the 19th century."

The farming and forestry carbon exchange offsets program has been an important part of Chicago Climate Exchange. Sandor said, " Since Chicago Climate Exchange began in 2003, the offsets program has covered approximately 17.2 million acres, 9,000 individual farmers, ranchers and forest owners and 32.4 million metric tons of offsets. Mitigation practices taking place on farms, ranches and forests are good for water, wildlife and the climate, while providing a new income source for rural economies. "

Regarding the effect of the offsets program, Sandor said, " Thousands of farmers, foresters and ranchers who commit to exceptional management practices that remove carbon from the air are now earning new income. The verified best practices that are used by land managers make crops better able to weather climate extremes, generate clean economy jobs, and incentivize new techniques that can further cut emissions."

"However, this is only a small part of what Chicago Climate Exchange members have been able to achieve," said Sandor. "Of all reductions made by CCX members since 2003, about 15 percent have been through offset projects. The remaining cuts are made through companies that are taking a broad range of steps to reduce their emissions. Electricity generators have implemented efficiency retrofits at power plants, used lower-carbon fuels, and optimized nuclear and hydro plant operations."

When commenting on the U.S. legislation on carbon exchange, Sandor told Xinhua, "In June of 2009 a comprehensive climate legislation bill was approved by the U.S. House of Representatives which included a national greenhouse gas reduction and trading system with compliance required starting in 2012. In the Senate, progress continues on multiple fronts. Senator Kerry is currently collaborating with Senators Lieberman and Graham to craft a bill with bipartisan support."

He continued, "While policymakers at the federal level work through the details of a federal bill, interest is growing in regionally mandated markets, such as the Regional Greenhouse Gas Initiative, which trades on the Chicago Climate Futures Exchange ( CCFE). State governments are increasingly looking to encourage renewable power generation and driving growth in renewable markets. "

Sandor is also a research professor at the Kellogg Graduate School of Management at Northwestern University where he teaches a course on environmental finance. He is a Member of the International Advisory Council of Guanghua School of Management at Peking University and a member of the TERI School of Management Advisory Committee in India. Sandor previously taught at the University of California Berkeley, Stanford University, and Columbia University.

http://news.xinhuanet.com/english2010/china/2010-04/06/c_13238388.htm

Power grid operator charts plan to cut carbon emissions.

April 20 (China Daily) - BEIJING : China's largest power grid operator State Grid on Monday said it plans to reduce carbon dioxide (CO2) emissions by 10.5 billion tons over the next ten years by using smart grid technologies.

This will contribute more than 20 percent to the Chinese government's goal of reducing carbon intensity, according to the company. China plans to cut carbon intensity, or the amount of CO2 released per unit of GDP, by 40 to 45 percent by 2020 compared with 2005 levels.

"State Grid will soon set up a smart grid to achieve its emission reduction target. Large-scale construction of the project will start in 2011, and the smart grid is expected to be completed by 2020," the company said in its enviromental development report.

The company will also work to improve its energy portfolio and energy efficiency, as well as bolster the development of the electric vehicle industry to achieve this target, it said.

"The proportion of clean power is expected to account for 25.2 percent of all installed power capacity connecting to State Grid in 2015. The figure will increase to 28.4 percent in 2020," said the report.

The clean power generation measures include hydropower, nuclear power, wind power, solar power, and pumped water storage power generation.

Development of the smart grid fits well with the country's future development of the energy industry, said Bai Jianhua, a researcher with the energy research institute under State Grid.

China's coal resources are mainly located in the northern part, while a large number of hydropower resources are in the southwest. However, it is the east that consumes the largest amount of electricity and had the biggest growth in power usage.

Development of the smart grid, which can send electricity a longer distance with less waste, compared with conventional power transmission technology, can solve the problem effectively, he said.

At present, construction of ultra-high voltage power transmission lines account for most of the State Grid's work. Sending electricity at voltage, as high as 1,000 kV, these lines are said to be more energy-efficient compared with conventional lines.

The company said earlier it planned to invest 100 billion yuan ($14.65 billion) for building such lines over the next three to four years.

Last year State Grid invested over 300 billion yuan in power grid construction, according to the report released on Monday.

http://www.chinadaily.com.cn/bizchina/2010-04/20/content_9751698.htm

China builds first carbon monitoring device.

April 13 (Xinhua) : BEIJING - The first carbon emission monitoring tower in downtown Beijing is being built in a greenbelt square south of Chang'an Avenue in Chongwen District, as part of a program to reduce the city's greenhouse gas emissions, a city official said Tuesday.

The 50-meter-tall tower, scheduled for completion in August, will help Beijing citizens know the area's real-time amount of carbon dioxide emissions through a screen on the tower, said Wang Xiaoping, director of the Beijing Forestry Carbon Administration (BFCA).

Four carbon emission monitoring towers are planned for Beijing, Wang said.

One in Beijing's Daxing district has been completed and two others, in Badaling and Tongzhou, are under construction.

http://www.chinadaily.com.cn/china/2010-04/13/content_9724942.htm